The ability to predict appropriate future expenditure for hospital care for general practices or emerging clinical commissioning groups is a major priority for the NHS. This innovative project uses complex data sets to build up estimated budgets at GP Practice level, based on the needs of people registered on lists.

This animation outlines the history of resource allocation in the NHS and examines new methods for more accurately predicting future expenditure.

Any organisation responsible for commissioning health services will be interested in ways to understand what a reasonable future cost may be for its population. For health systems like the NHS, such an understanding can also form the basis for allocating resources to commissioning organisations.

The ability to estimate allocations for small populations has become especially important within the context of GPs holding budgets for acute services – as in Practice Based Commissioning (PBC), and the new clinical commissioning groups that will take over responsibility for commissioning the majority of NHS services in England from 2013/14.

There are many different ways to estimate what an ‘appropriate’ cost should be. The Nuffield Trust has been leading work in partnership with the University of York, Health Dialog, New York University and the London School of Hygiene & Tropical Medicine to develop a new approach called Person-based Resource Allocation.

The great advantages of PBRA are that it can be used to support resource allocation and budget setting for small populations and ones that are constrained within an administrative boundary

The Person-based Resource Allocation approach represents a new generation of resource allocation formulae. It uses electronic data routinely collected on individual patients in the NHS (in a way which protects their confidentiality), on the supply of health services available to these individuals, and on the characteristics of the community in which they live, to predict the cost of their hospital care in the next financial year. This is one application of predictive modelling. The greater the health needs of the individual, the greater the likely future cost of hospital care.

The great advantages are that it can be used to support resource allocation and budget setting for small populations and ones that are constrained within an administrative boundary. In a world where commissioning is to be undertaken by groups of GP practices, it seems well suited to sort out the questions of what level of commissioning budget is appropriate for each group.

Based on our work, the Department of Health introduced a new approach to estimating allocating budgets for secondary care use to general practices in April 2010. Person-based Resource Allocation was applied within the fair shares toolkit of practice based commissioning as way to help primary care trusts (PCTs) assess likely spend by practice. The report to the Department of Health is available to download.

The Department of Health commissioned the Nuffield Trust to carry out further work to develop the existing Person-based Resource Allocation model using more recent data and trying out new options, and to examine how robust the model is in predicting future expenditure for hospital care for practices or clinical commissioning groups covering different sizes of populations. 

The approach represents a new generation of resource allocation formulae, and our research summary:  Person-based Resource Allocation: New approaches to estimating budgets for GP practices (December 2011), highlights the advances made in methods for allocating resources.  The report is aimed at GP and commissioning leaders, policy-makers, and senior managers in the NHS.

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