New developments in resource allocation

December 2011 © Nuffield Trust

PBRA (person-based resource allocation): A resource allocation formula at general practice level based on individual level characteristics

The Person-based Resource Allocation (PBRA) project

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• Team of experts working with Nuffield Trust from 2007

• Initial purpose was to develop budgets for practice-based commissioning based on individual patient data

• Coverage: secondary care, prescribing, community health services

Reviews of resource allocation in English NHS Hospital and Community Health Services, 1976 to present

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Drawn from Bevan, and Bevan and Van der Ven Note: RAWP = Resource Allocation Working Party RoR = Review of RAWP AREA = Allocation of Resources to English Areas CARAN = Combining Age Related Additional Needs (9)

Year Name Allocations to Approximate

population size

Years applied

1976 RAWP 14 RHAs 3m 77/78 – 90/91

1980 RoR 14 RHAs 3m 91/92 – 94/95

1993 University of York 14 RHAs

192 DHAs

3m

250,000

95/96 – 01/02

2001 AREA 303 PCTs 175,000 02/03 – 06/07

2006 CARAN 152 PCTs 350,000 07/08 –

Resource allocation in the NHS, England

Fair shares

CARAN

DH

PCT

Practice Practice

PCT

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Person-based Resource Allocation

Practice population

@ £10,000 per person per year

@ £1,000 per person per year

@ £100 per person per year

General population

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Modelling principles

Linking the data sets for analysis

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Modelling

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• Hospital-based expenditure excluding maternity and mental illness

• Modelled hospital expenditure in year t as a function of: – Age and sex (36) – Diagnostic categories from hospital utilisation in years t-1 and t-2 (152) – Attributed GP and small area needs characteristics (135) – Attributed small area supply characteristics (63) – PCT (152)

• Note: did not consider variables with potentially adverse incentive effects, eg number of encounters

Results from testing various models predicting costs for 2007/08 using data from 2005/06 & 2006/07

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Individual

Validation Sample

Practice

Validation Sample

Individual (n=5,205,747)

(Individuals n=5,445,559

Practices=797)

Model Set of variables R² R²

Model 1: age and gender 0.037 0.344

Model 2: Add 152 morbidity markers 0.122 0.608

Model 3: Add 152 PCT dummies 0.122 0.744

Model 4:

Add 135 attributed needs

& 63 supply

0.123 0.785

Model 5:

Reduce to 7 attributed needs

& 3 supply

0.123 0.774

Using the formula to allocate to practices

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• ‘Freeze’ supply variables at national levels

• For each individual, calculate predicted NHS hospital costs

• For each practice calculate average costs in each age/sex category

• Assign age/sex specific averages to all individuals in practice – to address data lags and changes in registration

• Share out PCT budget according to practices’ total predicted expenditure

Comparing observed and expected costs at practice level, by practice population size, 2007/08

Results applied in acute component of the Fair Shares Toolkit

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Step 1. Select your PCT's code from the drop-down list below.5PW 88

Step 2. Enter your PCT's budget to be allocated hereTotal PBC budget

Step 3. Indicate below if this total includes an amount to be allocated for prescribing.Include prescribing? Yes

Step 4. (optional) Change the threshold for pace of changePace of Change 1.0% Minimum pace of change for outliersPoC Threshold 10.0% +/- at average practice size

Step 5. Set the value in column W to "No" for practices that should beexcluded from pace of change. Final budgets are in column AH.

Step 6. (optional) View a large chart showing pace of change and 'issue' practicesby selecting the sheet "LargeChart"

Step 7. (optional) Enter consortia names in column AI. Sheet "Consortia" will then show data at this level.

Weights 62.2% 2.0% 9.8% 12.6% 13.4%

Practice Code Practice_Name

Acute Share

Maternity Share

MH Share

Prescribing Share

Inequalities Share

Total Populatio

n

Historic Spend Share

Fair share

(%)Historic Spend

Fair share (per head)

Historic (per head)

Final Population

Practice Code Practice_Name

Acute Share

Maternity Share

MH Share

Prescribing Share

Inequalities Share

Total Populatio

n

Historic Spend Share 100% £100,000,000 £311 £311 321,951

F81005 SHRUB END SURGERY 2.17% 2.86% 2.22% 2.22% 2.06% 8,486 2.21% 2.18% £2,207,332 £257 £260 8,486F81012 WEST MERSEA SURGERY 2.55% 1.51% 2.23% 2.60% 1.16% 7,455 2.33% 2.32% £2,334,363 £311 £313 7,455F81017 WALTON SURGERY 4.63% 2.09% 4.20% 4.82% 4.24% 11,049 4.74% 4.51% £4,738,019 £408 £429 11,049F81019 MAYFLOWER MEDICAL CENTRE - ALLDRIC 3.31% 2.85% 3.43% 3.26% 3.33% 10,225 3.07% 3.31% £3,065,701 £324 £300 10,225F81021 THE HOLLIES 2.86% 1.84% 2.62% 2.88% 2.29% 8,586 2.58% 2.74% £2,575,000 £320 £300 8,586F81026 CARADOC SURGERY 3.33% 1.41% 3.13% 3.55% 2.14% 7,868 2.86% 3.14% £2,864,017 £399 £364 7,868F81037 EAST LYNNE MEDICAL CENTRE 3.93% 3.79% 4.16% 3.86% 5.60% 10,673 4.27% 4.16% £4,267,997 £390 £400 10,673

£100,000,000

-25%

-10%

0%

10%

25%

50%

Shrub EndWest Mersea

Walton

Mayflower - AlldrickThe HolliesCaradoc

East LynneCastle Gardens

Ardleigh

St.James Ambrose Avenue

Winstree Road

Mayflower - WynneParsons Heath

East HillNorth Hill

Mersea RoadLayer Road

Creffield Road

Colne

Wimpole Road

Tiptree

Rowhedge

RanworthThe Frinton Road Med

Old Road

Thorpe

Fronks Rd FamilyHarewood

Lawford

Mill Road

Epping Close

Portland RoadHighwoods

Green Elms

TollgateMaltings Green

CrusaderBluebell

The Riverside Health

Hawthorn

Great Clacton Medical Partnership

Wivenhoe

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000Population

Difference between "fair share" and 2009/10 budget after PoC historic

AfterPOCNorth East Essex

www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_111057

Phase 3 Objectives: in progress

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• Refresh existing PBRA model using more recent data (for allocations 2011/12)

• Develop improved PBRA model (for allocations 2012/13)

• Model a variety of risk sharing arrangements (to inform shadow CCG and NHS Commissioning Board)

December 2011 © Nuffield Trust

www.nuffieldtrust.org.uk/pbra

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