Rural health care: A rapid review of the impact of rurality on the costs of delivering health care

It is generally acknowledged that small, rural NHS health care providers face higher costs than larger, urban areas. For a number of years the NHS has adjusted financial allocations to account for these unavoidable variations in costs in different parts of the country. However, our review for the National Centre for Rural Health and Care suggests these adjustments may not be compensating enough to avoid some rural trusts facing increased difficulties.

Report

Published: 20/01/2019

ISBN: 978-1-910953-61-7

Download the report [PDF 810.1KB]

The NHS, a universal health care system funded from general taxation and free at the point of use, was founded on the principle of providing equal opportunity of access for those at equal risk. Since the early 1970s, it has been recognised that the health care needs of populations vary across the country. Hence, different areas should receive different allocations from the total NHS budget in order to provide equal access.

But it has also been recognised that in different areas of the country, the costs of providing care vary in ways that are unavoidable or uncontrollable. This can be due to differences in local markets for land, buildings and labour, and other factors associated with remoteness, population sparsity and rurality generally. If no adjustment or compensation is made for such unavoidable
costs, it is likely that some health services will not be able to afford to provide their populations with the same access to, and quality of, care that others do. On this basis, since the early 1980s, local allocations have been adjusted to account for unavoidable variations in costs in different parts of the country.

The Nuffield Trust was commissioned by the National Centre for Rural Health and Care to explore the key issues around the impact of rurality and sparsity on the costs of delivering health care.

The aims of the review were to:

  • outline the policy considerations around accounting for unavoidable costs in providing health care in rural areas
  • review and summarise key evidence on the additional costs of delivering health care in rural areas
  • describe, quantify and critique current NHS allocation formulae in the four UK nations with respect to adjustments for rurality.

Our analysis suggests that while the association between rurality, overstretched services and financial pressure are unclear, NHS trusts with ‘unavoidably small’ sites do appear to underperform: as well as having generally longer waiting times and lengths of stay, they are also in greater financial difficulty. Six of the seven trusts with unavoidably small sites ended 2017/18 in deficit, with the combined financial position between the seven amounting to more than a quarter of a billion pound deficit. These trusts account for 3% of all trusts, but almost a quarter (23%) of the overall deficit for trusts, which is possibly indicative of unavoidable rural costs.

Partners

National Centre for Rural Health and Care

Suggested citation

Palmer B, Appleby J and Spencer J (2019) Rural health care: A rapid review of the impact of rurality on the costs of delivering health care. Nuffield Trust report. www.nuffieldtrust.org.uk/research/rural-health-care