Please login to the form below

Not currently logged in

New destination

In the journey towards effective healthcare investment, PCTs must take the lead with objectives that give direction

Suitcase with several destination labelsPCTs are first and foremost commissioning organisations. They now aspire to 'world-class commissioning', for which the Department of Health (DH) has defined the values, competencies and assurance framework.

But what is commissioning? The clue is in the word itself. Say it slowly. Co-mission-ing. At its heart is the 'mission', and that mission needs to be shared by all the partners in the health improvement effort, including the pharma industry.
What is the mission?

Essentially, the PCT's mission is to improve health and reduce inequalities through the efficient deployment of the finite resources at its disposal. Since the first competency listed under world-class commissioning is leadership, it is clear that the PCT's job is to take the initiative in defining the mission and bring others along with it.

It is time PCTs got onto the front foot and asserted with authority that they are using their budgets to invest in health, rather than being passive respondents to decisions beyond their control and simply paying for healthcare.

Asking the right questions
Unless PCTs start asking new questions they are going to keep getting the old answers, and little will change for the better. What are these new questions? How should PCTs go about getting the answers? Is there any evidence that new questions or new answers will make any difference to the patient's experience, the efficiency of the service or the population's health outcomes?

PCTs should question the amount they spend on their major health programmes, what good this investment does, how they compare to other PCTs, what their programme objectives are, and if they could do better with their investment, this year and next.

Programme budgeting and marginal analysis (PBMA) is a familiar tool in the health economists' toolbox. It has been used in the NHS since the early 1970s, and has been deployed in over 70 countries around the world. Currently it is enjoying a renaissance under world-class commissioning, with a specific endorsement in competencies five and eleven. The Healthcare Commission and Audit Commission have both given their approval to PBMA in a number of publications. Within the current NHS operating framework for 2008/09, all PCTs are urged to investigate value for money in their highest spending programmes: mental health; circulation disorders and cancer.

Programme budgeting can be defined as: "Looking where resources are deployed in health programmes, with a view to setting objectives and influencing future spending in those programmes to meet the programmes' objectives".

Marginal analysis is: "An appraisal of incremental costs and benefits when resources in programmes are increased, decreased or deployed in new ways."

Think of healthcare investment as a journey. Programme budgets set out a map of where we are now. Marginal analysis informs the journey. But it is the programme objectives that set the direction of travel. These objectives are key. It doesn't matter if cost mapping or economic appraisal skills are immature – they can catch up later – the important thing is the sense of direction that pulls all the partners together and points them in the same direction.

This is what puts the mission into commissioning.

Programme budgeting project
For some years the DH has asked PCTs to send in an annual return showing where all resources were deployed, broken down into 23 defined health programmes. Details on how this is done, including the allocation of primary care prescribing to programme budgets, and what it shows, are available at

PCTs are encouraged to set objectives for each programme in turn, perhaps at stages in the patient journey such as prevention, diagnosis, treatment, long-term conditions and terminal care. The idea thereafter is to see if programme budgets and management attention are truly directed towards these objectives, and if not, to realign them. Comparative data on spend, activity and outcome between similar PCTs can provide a useful challenge if a PCT is a significant outlier, and be a stimulus to greater effectiveness, efficiency and equity. For an example of a PCT programme budget report, visit and follow the links to public health and 'investing in health'.

Marginal analysis
Rising to the challenge of their leadership role, PCTs should take the initiative and convene advisory groups in the main health programmes, in order to understand, evaluate and redeploy programme resources to better effect. A typical group would include users of the service, carers, clinicians and managers from primary and secondary care, social services and voluntary organisations. Where available, a health economist or public health practitioner would chair or facilitate the group, drawing on published examples of how others had undergone the process.

The critical steps for such a group would be:

1. Establish the resource assumption for the programme budget (eg steady state, increased or decreased budget)
2. Consider ideas for disinvestment – reining in or stopping activities with lower efficiency ("hit list")
3. Consider ideas for new investments that meet programme objectives ("wish list")
4. Agree the criteria for judging priority on these lists
5. Conduct a full economic appraisal of marginal costs and benefits from the various options, if possible. If not possible, do this qualitatively, recording assumptions and value judgements as an audit trail
6. Consult
7. Implement
8. Evaluate
9. Repeat annually in perpetuity.

The importance of feedback
Unless front-line clinical teams in general practice and hospital have regular feedback on activity, outcomes and costs, it is unreasonable to expect them to meet programme objectives, performance targets and budgetary balance. Making such feedback readily available means direct access to information, usually online, and in a way that tells a meaningful story. North Yorkshire and York PCT is moving to a position where it will give programme-based feedback to GP practices covering need, risk factor management, prescribing, referral, use of resources and outcomes in one coordinated whole. Information for a local health system might be categorised under three headings:

1. Data: Information with numbers in it – inputs (resources), outputs (eg activity, prescribing) and outcomes (eg measurable changes in health status). Data are used to mount an epidemiological or economic case for change.
2. Evidence: Appraisal of published accounts of what works, including expert reviews such as those of NICE. Evidence can be used to mount a clinical case for change.
3. Narrative: What users of services and staff tell us is important. Narrative brings important subjective balance to the objective information and is used to gain insight into areas that need to change.

Making a difference
A formative experience that I had while director of public health in the former Norwich PCT, a few years ago, persuaded me that new questions and answers can lead to a tangible difference in a patient's experience of care and in patients' lives. The best example was mental health. This was a relatively high-spending programme per capita, compared with our peer PCTs, but we had failed to spot this until we framed a programme budget question.

The high expenditure was spread across all sectors – in GP prescribing, hospital care, tertiary specialist care and grants to voluntary organisations. Despite this, the PCT had failed to issue a clear statement of commissioning objectives for the mental health programme as a whole. The predominant model of care was pharmaco-medical (pills and doctors) with insufficient attention to other interventions such as talking therapies, arts and exercise, for which an evidence base exists. Crucially, the mental health services users and carers groups were eager and vocal for change. Altogether, this was an ideal candidate for a PBMA approach.

The old question had been: "Who were Norfolk's major providers of health services in 2005/06?" That gave us a list headed by the local teaching hospital, and followed by general medical services, GP prescribing, community services and only then the local Mental Health Trust – the latter accounting for only £49m in a total budget of £843m, so it appeared small. Specialist mental health contracts added a further £24m, but it was still relatively small in the big picture.

The new question, which prompted a review of our whole approach, was: "What were the programme budgets for Norfolk in 2005/06?". This put mental health right at the top, accounting for 13 per cent of total spend and well ahead of circulation disorders and cancers. It brought home to the PCT Board how little they knew about health programmes and value for money. Clearly, a lot of GP effort, community effort and acute hospital effort was directed to mental health problems. Norwich PCT spent £20.6m per 100,000 weighted head of population on mental health, compared with £16.8m average in our nearest peers. This might have been justifiable if the outcomes (such as suicide, self harm and substance addiction rates) had been lower, but that was not the case.

We set about tackling this. First, we articulated some programme objectives, namely: promote mental health and prevent relapse; alleviate symptoms; for those with chronic conditions, promote function and integration in society and relieve pressure on carers.

This was backed up by measurable outcomes, including reduce self harm and suicide rates, reduce very high levels of antidepressant prescribing, increase non-medication therapy eg talking therapies, arts and exercise and reduce expensive out-of-NHS placements if equally good outcomes were available locally.

Stakeholder engagement
Once these issues got into the public domain via the annual public health report, there was an explosion of local press interest, both broadcast and print, under headlines such as: "Why is Norfolk hooked on pills?" Users of services weighed in with their views, mostly supportive of alternatives (or adjuncts) to the medical model.

We used DH programme budget data and indicators of outcome to challenge local clinicians to re-examine their model of care in the light of others who clearly achieved better results with fewer resources. In a very constructive e-mail, the medical director of the local Mental Health Trust wrote: "On the basis of my observations the PCT has every right to be asking questions about how its investment in mental health is being spent ... I think that the data available will provide us with a basis on which to move our thinking forward."

Did anything change?
Antidepressant costs fell by 30 per cent in the next two years – still higher than most, but closer to the mean. The Mental Health Trust accepted a £2m cut in its budget, yet went on to successfully acquire Foundation Trust status, and two Norwich colleges opened arts for health courses and Norwich Medical School did the same. The NHS counter fraud service investigated a private mental health provider for alleged overcharging – police made arrests and two directors were dismissed, and the NHS Institute for Innovation and Improvement funded a marginal analysis study to take the project to a further level.

What can we conclude?
Clearly, effective and cost-efficient prescribing is part of the drive for world-class health outcomes, but nobody – not even pharma – benefits in the long run if prescribing is excessive or diverts the prescribing budget from one programme to another where it achieves less health gain.

To be true world-class commissioners, PCTs need to get on the front foot and show they are actively investing in health, not merely paying for healthcare. In order to do this, they need to ask new questions. The framework of shared programme objectives, programme budgets and closely monitored programme performance helps phrase those questions in a structured way, leading to meaningful answers and improving patient and population outcomes.

Isn't that what we all want?

The Author
Dr Peter Brambleby is director of public health, North Yorkshire and York PCT and North Yorkshire County Council

16th December 2008

From: Healthcare


Subscribe to our email news alerts


Add my company
IPG Health Medical Communications

We are the world's most celebrated and awarded Medical Communications agencies. We are 800 experts obsessed with combining science, creativity...

Latest intelligence

The evolving healthcare advertising landscape
Industry experts share their insights on the emerging trends in healthcare advertising...
Clinical trial considerations: Why supporting HCPs matters...
When HCPs have the necessary information, they can more easily communicate it to patients using simplified language and a confident, calm tone....
Six ways to provide successful e-learning programs to healthcare professionals
Practical tips to setting up high-impact e-learning programs...