Resource allocation in the NHS: Shifting the balance towards the community.

Hospitals absorb the bulk of NHS funding, whilst funding for community health services has shrunk. These trends have persisted despite government policies favouring a 'primary care led' NHS, and despite increases in long-term conditions requiring expansion of community-based care to maintain quality of life and forestall disablement. Reviving community-based services is possible but will require prolonged investment that will need to be ring-fenced to prevent its diversion into hospital budgets. In an overview of NHS policy in a recent issue of Renewal we asked: 'How can this be done, and what are the likely consequences?' (1) This article is an attempt to answer these questions, using Hospital at Home as an example of how re-allocation of resources could be embedded in the NHS.

Background

Hospitals in the NHS lurch from crisis to crisis, although most are remarkably resilient, as the COVID-19 pandemic has demonstrated. In normal years, Accident and Emergency departments run out of space and trolleys, in-patient wards keep patients because community services cannot take them (the DTOC problem-Delayed Transfer Of Care), and waiting times for specialist treatments shrink for a while when money is thrown at them, only to grow again when the money goes elsewhere. None of this is new, and none of it is uniform. Different hospitals have differing staffing profiles and levels, bed numbers and catchment populations.

These variations were inherited from the fragmented healthcare system that existed before the Second World War, and the imbalance in staffing, funding and infrastructure that made nationalisation of hospitals so sensible continues to this day. The historical experience of the NHS in its first era, from 1948 to the early 1980s, showed that even when universal coverage was established and sustained (through progressive taxation), other inequalities in geographic accessibility of services, patterns of service use and health outcomes persisted. (2)

The Inverse Care Law

Julian Tudor Hart demonstrated in a paper published in The Lancet in 1971 that, despite the growth in the NHS from 1948, its resources remained unevenly distributed, to the detriment of the poorest communities. Tudor Hart formulated the Inverse Care Law, stating that resources were inversely related to need, especially where market forces operated. The first part of the law is a self-evident truth; the children most in need of shoes are those who have none. The second part was more controversial, in that it attributed the maldistribution of NHS resources--particularly staff--to the gravitational pull of the prestigious Teaching Hospitals and the influence of medical specialists who divided their time between private practice and public service. (3)

Under the banyan tree

The gravitational pull of the big hospitals impaired the development of community-based services. Tom Richardson, a member of Oxfordshire Community Health Council, analysed the distribution of NHS funds to the Teaching Hospitals in Oxford and to community services in a period of cost containment, comparing 1978-79 with 1981-2. Community services included preventive care, school health, family planning and general practice in Oxfordshire and the three surrounding counties of Berkshire, Buckinghamshire and Northamptonshire. His conclusion was: 'Under the banyan tree of the Oxford Teaching Hospitals nothing much else seems to grow, neither in Oxfordshire nor in the other three counties, and many services struggle even to survive'. (4) Oxford Teaching Hospitals flourished at the expense of community services.

Planned economy of health

After 1948 the allocation of funds to the NHS by central government followed historical, pre-NHS, patterns and did not take into account population movement, changing demography, or advances in medical treatment. The allocation formula was described cynically as: last year's amount + allowance for growth + allowance for scandals. (5) In its first era, the NHS appeared to be a centralised 'command and control' system, but in practice there were few commands and little control. (6) The government offered advice to the NHS and allocated funds based on historical spending patterns, but NHS management was devolved and remained largely in the hands of the pre-NHS political and medical elites. (7)

In 1970, the Labour government produced a Green Paper on NHS reorganisation that outlined a new approach to resource allocation that would reduce regional inequalities in access to hospital services. (8) While Labour was defeated in the election later that year, the NHS Reorganisation Act established 90 Health Authorities reporting to 14 Regional Health Authorities. Under the reforms, Regional, Area and District Heath Authorities replaced Regional Hospital Boards, taking over public health and other services from local authorities in the process. The organisational superstructure for a planned economy of health care began to appear.

The rise of RAWP

The first mechanism to reduce regional inequalities--the Crossman formula--was succeeded in 1975 by the Resource Allocation Working Party (RAWP), when it was realised that the Crossman formula was not capturing real need for services. RAWP was, in effect, an advocacy coalition drawing on the emergent disciplines of Health Services Research and Health Economics to crystallise concerns previously expressed by disparate voices. (9) It aimed to achieve equal opportunity of access to services for people at equal risk, and this was extended to include reduction in avoidable health inequalities in 1997. The RAWP formula evolved further, to include more accurate measures of need, and more sensitive measures of...