To fund or not to fund: setting priorities in the NHS

Blog post

Published: 15/09/2011

The 'Nicholson' challenge necessitates the making of difficult decisions by NHS commissioners. Most of the clinical commissioning groups (CCGs) that will emerge in 2013 look set to be smaller than the primary care trusts (PCTs) they are replacing, and with significantly less management support whilst – crucially – bearing similar legal liabilities.

However, when it comes to setting and accounting for funding priorities, the processes used by CCGs will need to be transparent and sufficiently robust to withstand judicial review.

Against this backdrop, the Nuffield Trust commissioned a team from the University of Birmingham’s Health Services Management Centre (HSMC) to undertake research into how PCTs in England have gone about priority setting, wanting to distil lessons for the future when increasingly difficult choices will have to be made about what to fund (or not).

The report of this new research: Setting priorities in health: A study of English primary care trusts, is arguably the most extensive review to date of how PCTs make decisions about funding priorities. Alongside this report we have published a related policy briefing on the implications of the research for current reform proposals: Setting priorities in health: The challenge for clinical commissioning

More than eighty PCTs took part in HSMC’s survey, and five sites were explored as in-depth case studies. The most striking message from the research was that PCTs focused much of their priority-setting activity on new and marginal spending, such as how to invest additional resources, or whether new and emerging treatments should be approved for funding.  What was much less in evidence was root and branch scrutiny of the core resources available to the PCT and how these should be used to meet the full range of local health needs. 

Another concern was that disinvestment was rarely tackled as part of PCT priority setting, despite formal recognition of its importance. And even when disinvestment decisions were agreed, they were often difficult to implement in practice, especially in relation to changes to secondary care.  

On the positive side, PCTs were found to have put considerable effort into ensuring that their approach to priority-setting was transparent, evidence-based, and inclusive, and there are many examples of good practice on which new CCGs will be able to draw. 

The Department of Health estimates that 20 per cent of the productivity gains it wants made over the next five years should come from ‘service redesign’, moving more care into communities, investing in effective prevention and ultimately reducing avoidable admissions. 

This research suggests that to achieve this, a quantum leap will need to be made by commissioners. CCGs are going to have to build on the experience and expertise developed by PCTs in relation to priority setting, but go much further by tackling core NHS spend and facilitating robust local debate about how such resource should best be used. 

This new research indicates that national guidance and templates can play an important role in supporting the work of local commissioners and the NHS Commissioning Board (now NHS England) will play a crucial role in determining the framework within which local priority setting is enacted in future.  But how it will go about this task, and work with the National Institute of Health and Clinical Excellence (NICE) in using guidance and technology appraisals to inform a national framework for commissioning, is by no means settled. 

A centralised approach led by the NHSCB is plausible in a context of financial constraint, when it may be considered more appropriate to shield local GPs from unpalatable decisions about funding of services, and to avoid allegations of ‘postcode rationing’ by CCGs.  

On the other hand, in the spirit of a liberated and devolved NHS, it may fall to CCGs to make the majority of priority-setting decisions based on what local clinicians deem to be the needs of their population.

One final thought: individuals will be increasingly expected to play a role in priority setting through the expansion of choice and personal health budgets – CCGs will not be the sole commissioners in respect of local funding flows. 

Taken together, this all begs the question of whether it will be individuals, their GPs, or NICE and the NHSCB who will shape health funding in the long term.  In other words, who will be left holding the hot potato when the letter about judicial review arrives from the lawyers?

Suggested citation

Smith J (2011) ‘To fund or not to fund: setting priorities in the NHS’. Nuffield Trust comment, 15 September 2011.