NHS Resource Allocation Review Consultation
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- Rafe Bertram Preston
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1 October 2001 NHS Resource Allocation Review Consultation Targeting Poor Health : Professor Townsend s Report of the Welsh Assembly s National Steering Group on the Allocation of NHS Resources Introduction As a result of discussions within the Health and Social Services Committee on the distribution of money to the NHS Wales I commissioned a major resource allocation review in February 2000, with the objective of ensuring more equitable access for the entire population of Wales in accordance with their health needs. This review is also an important strand of Improving Health in Wales, a plan for the NHS and its partners, which I launched in February The plan sets the policy agenda for the next five to ten years and outlines the commitment to rebuild, renew, and improve the National Health Services in Wales. The Review is headed by Professor Peter Townsend of the London School of Economics and Bristol University who chairs a National Steering Group convened by the Assembly to oversee the Review. Professor Townsend is an international authority on poverty and inequality. His report - "Targeting Poor Health "- was considered by the National Assembly s Health and Social Services Committee on 4 July At the Committee it was agreed to use the report as the basis of consultation together with other supplementary work.
2 Consultation Documents We would like your views on the proposals contained in the following consultation documents, which incorporate supplementary work where relevant. 1. Targeting Poor Health : Professor Townsend s Report of the Welsh Assembly s National Steering Group on the Allocation of NHS Resources (Volume 1). This draws on :- ( a ) Independent Report of the Research Team (Volume 2 ) Available on request. ( b ) Executive Summaries of the Review s Task Groups (Volume 3) Available on request. 2. Supplementary tables attached at Annex A :- Table 1 updates Table 2 ( Chapter 5, page 72 ) in the Townsend Report ( Volume 1 ). This table compares the allocation of billion, at health authority level, using the current formula with the new formula proposed by the research team. The new formula proposed by the research team has been supplemented to take into account issues of rurality. Tables 2, 3, and 4 detail the allocations, at Local Health Group level, using the new formula proposed by the research team for Hospital and Community Services, Prescribing, and General Medical Services respectively, compared with population shares. Table 5. Provisional Age Adjustment - Work continues to be carried out on an age adjustment to the resource allocation formula. This has now advanced sufficiently to indicate, provisionally, the effects of the inclusion of such an adjustment. These are illustrative, at this stage, and will require further refinement.
3 Consultation Responses Please send your responses to this consultation to the following address, by 30 November 2001 : Mr Nick Patel Project Director - Resource Allocation Review NHS Directorate, The National Assembly for Wales Cathays Park Cardiff CF10 3NQ Tel: nick.patel@wales.gsi.gov.uk Next Steps The responses will be considered by the National Steering Group on 19 December 2001 to enable Professor Townsend to report to the Health and Social Services Committee early in It will then be for the Administration to take decisions. The National Assembly will need to agree the implementation plan and analysis is being undertaken to see how these changes could be absorbed through differential growth within current resource planning assumptions. On implementation the Townsend Report recommends that the transition to new target shares should be achieved through redistributing the annual growth in NHS resources. No area will receive less than their current level of resources and those areas which are furthest from their target share will receive the highest rate of growth. The Townsend Report envisages the need for an on - going formula refinement process which could be achieved by way of a Standing Group. The process will be agreed after consultation. The Townsend report which was considered at the 4 July Health and Social Services Committee has been posted to the National Assembly for Wales web site- /subject index health / Health and Social Services Committee / 4 July meeting. Jane Hutt Minister of Health and Social Services
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5 ANNEX A Supplementary Tables The following Tables are attached :- Table 1 : The New Formula Proposed by the Research Team for Hospital and Community Services ( Supplemented with a Rural Cost adjustment ) used to allocated 1,356 million and compared with the Current Formula. Table 2 : The New Formula Proposed by the Research Team for Hospital and Community Services ( Supplemented with a Rural Cost adjustment ) used to allocated 1,356 million and compared with Population Shares. Table 3 : The New Formula Proposed by the Research Team For Prescribing Used to allocate 324 million and compared with Population Shares Table 4 : The New Formula Proposed by the Research Team for General Medical Services used to allocate 187 million and compared with Population shares. Table 5: The New Formula Proposed by the Research Team for Hospital and Community Services (Supplemented with a Rural Cost Adjustment and Age Adjustment) used to allocated 1,356 million and compared with the Current Formula. 1. The National Assembly will need to agree the implementation plan and analysis is being undertaken to see how these changes could be absorbed through differential growth within current resource planning assumptions. On implementation the Townsend Report recommends that the transition to new target shares should be achieved through redistributing the annual growth in NHS resources. No area will receive less than their current level of resources and those areas which are furthest from their target share will receive the highest rate of growth. 2. Comparisons at Local Health Group level with current resource shares are not provided as there is no robust comparative expenditure for Local Health Groups. 3. Comparisons with the current Health Authority shares illustrate the direction of change, but will be subject to further development work on the formula. The position is set out in volume 3 (Task Group A Report). In general, the effect of this further work will depend on additional data and will be subject to review before inclusion in the formula. Work on an age adjustment, however, has advanced sufficiently to indicate provisionally the effects which are set out in Table 5.
6 Table 1 : The New Formula Proposed by the Research Team For Hospital and Community Services (Supplemented with a Rural Cost Adjustment) used to allocate 1356 million and Compared with the Current Formula Differences between Current Current New formula Current Current formula formula formula ex inc. rural cost formula and ex ambulance Ambulance adjustment the new and the new formula formula m m m m m A B C D E Gwent Bro Taf Dyfed Powys North Wales Morgannwg All HAs i) Table 1 updates Table 2 ( page 72 ) of the Townsend Report ( Volume 1 ). ii) Column A shows the resource allocation given by the current formula. iii) Column B shows the resource allocation given by the current formula excluding ambulance services. For comparative purposes, it is necessary to exclude ambulance services since the current formula includes an allowance for ambulance services ( which has a road mileage adjustment favouring rural areas ) and the new formula does not include an ambulance services resource allocation. iv) Column C shows the new formula including a rural cost adjustment. The rural costs index is applied to 7.5% of expenditure which corresponds to the travel intensive elements of community health services. v ) The totals at the bottom of columns D and E add only the positive redistributions. The negative redistributions add to the same total Consultation Responses are sought on the new formula resource allocations outlined in column C for hospital and community services.
7 Table 2 : The New Formula Proposed by the Research Team For Hospital and Community Services (Supplemented with a Rural Cost Adjustment) used to allocate 1356 million and Compared with Population Shares. % Wales Hospital & C ommunity % Wales Allocation population community nursing population m (1999 needs rural cost adjusted for needs estimate) index index and rural costs A B C D E Caerphilly % 98% Blaenau Gwent % 98% Torfaen % 97% Monmouthshire % 102% Newport % 99% Vale of Glamorgan % 100% Rhondda Cynon Taff % 99% Merthyr Tydfil % 97% Cardiff % 98% Powys % 109% Ceredigion % 103% Pembrokeshire % 102% Carmarthenshire % 101% Isle of Anglesey % 102% Gwynedd % 102% Conwy % 102% Denbighshire % 101% Flintshire % 100% Wrexham % 102% Swansea % 99% Neath Port Talbot % 98% Bridgend % 98% All LHGs Gwent % 99% Bro Taf % 98% Dyfed Powys % 104% North Wales % 101% Morgannwg % 98% All HAs i) For general notes on the formula see notes to Table 1. Comparisons of allocations are not provided as there is no robust comparative expenditure for Local Health Groups. ii) Column A shows the percentage share of the Wales population for each LHG or health authority area. iii) Column B shows the needs share given by the new formula compared to the population share (the needs index). iv) Column C shows the index of relative costs due to the distribution of population (the rural costs index). v ) Column D shows the population share adjusted for needs and rural costs. The needs index is applied to 100% of expenditure and the rural costs index to 7.5% of expenditure. vi) Column E shows the result of applying the shares in Column D to the total amount to be allocated.
8 Table 3 : The New Formula Proposed by the Research Team For Prescribing used to allocate 324 million and Compared with Population Shares % Wales Prescribing % Wales Allocation population needs population m (1999 estimate) index adjusted for needs A B C D Caerphilly % Blaenau Gwent % Torfaen % Monmouthshire % Newport % Vale of Glamorgan % Rhondda, Cynon, Taff % Merthyr Tydfil % Cardiff % Powys % Ceredigion % Pembrokeshire % Carmarthenshire % Isle of Anglesey % Gwynedd % Conwy % Denbighshire % Flintshire % Wrexham % Swansea % Neath Port Talbot % Bridgend % All LHGs Gwent % Bro Taf % Dyfed Powys % North Wales % Morgannwg % All HAs i) At present an indicative allocation is made to Local Health Groups. The actual costs (i.e. payments to dispensing contractors) are managed separately at Health Authority level. ii) Column A shows the percentage share of the Wales population for each LHG or health authority area. iii) Column B shows the needs share for prescribing given by the new formula compared to the population share (the prescribing needs index). iv) Column C shows the population share adjusted for prescribing needs. v ) Column D shows the result of applying the shares in Column C to the total amount to be allocated. Consultation Responses are sought on the new formula resource allocations outlined in column D for Prescribing
9 Table 4 : The New Formula Proposed by the Research Team For General Medical Services used to allocate 187 million and Compared with Population Shares. % Wales Prescribing % Wales Allocation population needs population m (1999 estimate) index adjusted for needs A B C D Caerphilly % Blaenau Gwent % Torfaen % Monmouthshire % Newport % Vale of Glamorgan % Rhondda, Cynon, Taff % Merthyr Tydfil % Cardiff % Powys % Ceredigion % Pembrokeshire % Carmarthenshire % Isle of Anglesey % Gwynedd % Conwy % Denbighshire % Flintshire % Wrexham % Swansea % Neath Port Talbot % Bridgend % All LHGs Gwent % Bro Taf % Dyfed Powys % North Wales % Morgannwg % All HAs i) The Non Cash-Limited element of General Medical Services is demand-led and is not allocated by formula. The Cash-Limited element is allocated by formula. ii) The research team's formula applies to both cash-limited GMS (staff, premises and IT costs) as well as non cash-limited GMS which includes fees paid to GPs and some premises costs. iii) Column A shows the percentage share of the Wales population for each LHG or health authority area. iv) Column B shows the needs share for General Medical Services given by the new formula compared to the population share (the GMS needs index). v) Column C shows the population share adjusted for GMS needs. vi ) Column D shows the result of applying the shares in Column C to the total amount to be allocated. Consultation Responses are sought on the new formula resource allocations outlined in column D for General Medical Services
10 Table 5: The New Formula Proposed by the Research Team For Hospital and Community Services (Supplemented with Rural Cost and Age Adjustments) used to allocate 1,356 million and Compared with the Current Formula. Differences between: Current Current New formula Current Current formula formula formula ex inc rural cost formula and ex ambulance Ambulance and age the new and the new adjustments formula formula A B C D E Gwent , Bro Taf Dyfed Powys North Wales Morgannwg All HAs 1, , , i) For general notes on the formula see notes to Table 1. ii) Column C shows the new formula including a rural cost adjustment and a provisional age adjustment. The rural costs index is applied to 7.5% of expenditure, which corresponds to the travel intensive elements of community health services. The age index is applied to 65% of expenditure corresponding to hospital in-patient services. iii) The totals at the bottom of columns D and E add only the positive redistributions. The negative redistributions add to the same total.
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