Deciding what to fund in health: national directives or local autonomy?

Blog post

Published: 27/02/2012

As the purchaser of health services for the British population, the NHS has always had to make hard choices about who is eligible for treatment, what services to cover and what criteria patients need to meet before treatment is administered.

In recent months in particular, there have been extensive debates about who bears responsibility for making these decisions and the basis on which they should be made.

These include questions about how the duties of the Secretary of State for Health should be framed, the extent to which the NHS Commissioning Board (now NHS England) should intervene in the decisions of local commissioners, and whether we are prepared to sacrifice equity for local autonomy.

Similarly, the NHS Medical Director Professor Sir Bruce Keogh has recently commissioned the Right Care Team to explore the possibility of establishing criteria for deciding the clinical value of certain treatments, in order to better assess whether a service should be funded or not.

Anticipating some of these debates, the Nuffield Trust has been exploring how we might improve the way the package of care offered by the NHS is shaped, with a view to improving equity, accountability and transparency.

As we explain in our new report, decisions about what services are funded by the NHS are made implicitly. Whether or not the NHS chooses to fund a specific service might be the result of decisions made by a variety of national, regional and local actors, each of which are working within a context of laws, duties, policies, budgets and financial incentives.

This system is further complicated by ambiguities around the influence of each player on the package itself. For example, easily-identified, institutional players, such as NICE, can appear on paper to exert a strong influence over what the NHS does or does not fund; yet, institutional directives are often only as strong as the will of individual managers and clinicians to enforce them.

There are some obvious advantages to this implicit approach; for example, it allows doctors to respond to the needs of individual patients where necessary.

However, there are certain disadvantages. For example, the implicit approach does little to ensure equity of access, or that commissioners prioritise cost-effective services and treatments. It also makes it very hard for the public to see how spending decisions are made.

With these problems in mind, we explored some alternative options, including the idea of setting the NHS’ package of care explicitly and at a national level, perhaps by giving a single institution, like the NHS Commissioning Board, responsibility for determining its contents.

To assess the prospects of such a proposal, we examined similar set-ups in other countries, considering their impact on equity, accountability and efficiency, but found that while other countries did attempt a more explicit account of the package of care funded publicly, few used this mechanism in order to improve equity or efficiency within their health systems.

Even when benefits packages are set nationally and explicitly defined, the majority of decisions are still necessarily made further down the purchasing hierarchy.

Moreover, as well as being technically challenging to develop and enforce, setting the NHS benefits package at a national level may lead to several adverse consequences such as limiting the ability of commissioners to adhere to budgets, or clinicians to respond to their patient’s needs, and increasing the NHS’ vulnerability to lobbying and other political pressures.

As such, we are recommending a range of alternative options for the Government and the NHS Commissioning Board to consider.

These include establishing a set of principles to inform how public money is spent in the NHS; nudging providers and clinicians towards clinical and cost-effective care through information technology-based clinical prompts; and making decision-making in clinical commissioning groups transparent, so that departures from national guidelines and NHS commissioning principles are subject to proper scrutiny before they are finalised.

In combination these options would go a long way to taking the sting out of future calls for the Government to set a more explicit count of what is in and out of the NHS ‘offer’ – something we believe would compromise the solidarity principle upon which the NHS relies.

This blog is also available to read on the Public Finance website.

We are interested in your views on the issues raised in Benedict’s blog and in our new report: Rationing health care: Is it time to set out more clearly what is funded by the NHS?:

  • Do you think we should set what the NHS provides at a national level, or leave the system as it is?
  • Do you think we should be more explicit about what is, and is not, funded by the NHS?
  • Do you think there are other options for improving efficiency, equity and accountability in the way the NHS sets its ‘benefits package’?

Suggested citation

Rumbold B (2012) ‘Deciding what to fund in health: national directives or local autonomy?’. Nuffield Trust comment, 27 February 2012.