Research summary
9 Dec 2011

This research summary highlights a new approach to allocating resources to commissioning GP practices in the NHS in England, which has been developed by the Nuffield Trust and partners.

Summary

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

Until recently, it was not possible to develop an accurate needs-based funding formula for calculating target allocations for commissioning practices.  In April 2010, the Department of Health introduced a new approach to setting target allocations for hospital care to commissioning general practices – Person-based Resource Allocation (PBRA).

Using these innovative person-based methods, good-quality models for predicting future hospital costs were developed.  The most important factors in predicting future costs measured at person-level were age and morbidity (diagnoses recorded in previous inpatient admissions).  Factors attributed to individuals from area-level data, such as socioeconomic deprivation, or area-based mortality measures, were much less powerful.

The approach could be a significant part of how target allocations are calculated for the new clinical commissioning groups in the NHS in England

The models performed well by international standards, predicting over 75 per cent of the variation in the next year's costs at practice level. Subsequent development has increased this predictive power to 85 per cent.

This is a real improvement on previous methods and the approach could be a significant part of the how target allocations are calculated for the new clinical commissioning groups in the NHS in England.

Person-based Resource Allocation: New approaches to estimating budgets for GP practices, provides an outline of PBRA, why it was developed, and how. The report is aimed primarily at GP and commissioning leaders, policy-makers, and senior managers in the NHS.  It summarises the approach developed in a series of analyses over time and is based on work by a range of organisations including Nuffield Trust, University of York, University of Manchester, New York University, Health Dialog and the London School of Hygiene and Tropical Medicine.

The analysis was funded by the Department of Health and the resulting formula was used within the ‘fair shares toolkit’ for allocations from primary care trusts (PCTs) to practices for commissioning, for 2010/11 and 2011/12. The formula has been further developed for use in 2012/13 to help set target allocations for shadow clinical commissioning groups – that analysis will be reported in early 2012.

For further information about our work in this area visit the dedicated PBRA project page.

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