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Personal care budgets could further fragment the NHS

Aside from whether patients welcome the cash payments there are wider issues that need addressing, namely whether the scheme strips cash from the NHS and so weakens the service for others; will it be a subsidy for private care; and who steps in if the money is spent before the year is up?

By April 26 the public are invited to tell the Department of Health what we think about direct payment ‘personal budgets’ (Direct payments for Healthcare document). It proposes that any NHS patient with a chronic illness (such as lung disease or diabetes, or disability caused by a stroke or neurological disorder or mental illness) should have the right to have an annual sum of money paid into their bank account so that they can buy the care they need for themselves, from whoever they like. If this will make life at all easier for these people, surely no one with the slightest awareness of the struggle normal life is for many of them could possibly grudge it.

Some people have queried whether the pilot projects that have been conducted really show that personal budgets are beneficial. There was no evidence that they led to any health improvement, and some experts have questioned whether the evidence even shows that they improved patients’ ‘care-related quality of life’, as the government claims. Still, there is no evidence that they made it worse, so why not go ahead anyway, if patients want it?

Besides which, at first sight the amount of money involved doesn’t look enormous.  Even if all the 50,000 people now getting ‘continuing’ NHS care’ are given personal budgets (which they will have the right to ask for from 2014), the extra costs involved (and there will be some) look quite minor, relative to the total cost of the NHS. So on this basis too it seems churlish to raise any objection.

Yet the proposal actually raises some major issues. One concerns the potential impact on the services available to everyone else. A disabled patient who receives a direct payment into her bank account and decides to use it to buy care services from a private company instead of the local NHS trust may reduce the trust’s income by several thousand pounds a year. If several patients do the same, the impact on the trust’s ability to serve other patients could be serious. In an appendix to the consultation document, which perhaps few people will read, the Department of Health says CCGs will just have to ‘manage’ this risk ‘in the short term’. But in the long term, it says, reducing the funding of existing providers ‘may well be necessary’ (ibid, Annex B, para 40). In other words, personal budgets are expected to lead to a contraction of NHS provision and an expansion of other kinds of provider, in practice private companies.

A second question concerns the long-run implications of adopting the principle itself, because the government ‘wants personal budgets to become an option for patients ‘across the country’, not just the 50,000 now receiving ‘continuing care’:

Personal health budgets should be available to anyone… where it may be cost effective to do so. Organisations must not assume that some groups of people can’t benefit from a personal health budget.”(ibid, paras 4 and 12)

Since CCGs are to be free to decide who can benefit, and since over 15 million people in England have at least one long-term health condition, the potential exists for very large numbers of patients to start funding a significant part of their health care with what will in effect be healthcare ‘vouchers’.

Two strong objections have been raised to this in the past. One is that patients with personal budgets may run out of money before the financial year is up. The government says no one ‘should be denied essential treatment as a result of having a personal health budget’ (Direct Payments, para 12), though ‘essential treatment’ could obviously turn out to be pretty narrowly defined. A more fundamental objection is that more affluent patients could ‘top up’ their personal budgets, in effect creating a two-tier health service. Nothing is said about this in the consultation, and it would seem hard to prevent. For better-off patients, personal budgets could really just be subsidies for buying private health care. And a more fundamental objection still is that if even a few million people start spending their personal budgets on private providers, the impact on NHS providers will be massive.

But these are not questions that the consultation document raises. The proposal looks well-intentioned and innocuous. In reality it means opening very wide door to a private health care system, subsidised by a contracting core of tax-funded provision. Is this what we want?

About the author

Colin Leys is emeritus professor of political studies at Queen’s University Canada, honorary research professor at Goldsmiths and works with CHPI. His most recent publication is “The English NHS: from market failure to trust, professionalism and democracy”, Soundings 2017.


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