Feature / Programmed for improvement

Lord Howe sets out how programme budgeting data can engage clinicians and help inform better commissioning.

The vision set out in the coalition government’s Liberating the NHS white paper is both simple and ambitious: to have health outcomes that are among the best in the world. 

While the chancellor has confirmed in the spending review that the NHS budget would not only be protected, but grow in real terms, the financial situation will still be incredibly challenging. In the years ahead, every commissioner, healthcare provider and GP practice must ensure every penny of the NHS budget is spent in a way that provides the best possible outcomes for patients.

To do this, commissioners need a good understanding of how they are spending their money and what they will receive in terms of healthcare and outcomes. Programme budgeting provides a framework for this. By compiling information on expenditure on conditions such as cancer and mental health problems, healthcare activity can be directly linked to outcomes data.

The great advantage of programme budgeting is that it is especially good at engaging clinicians as it is based on healthcare conditions and encompasses all aspects of the care pathway.

As Dr Peter Brambleby, joint director of public health NHS Croydon and the London Borough of Croydon, has said: ‘It provides the common ground on which patients, clinicians and managers can face up to the opportunity costs of their aspirations, and start to tackle outcomes and inequalities. It anchors the joint strategic needs assessment in the real world of affordability and explicit choices.’

This will be critical as we move towards GP commissioning. Programme budgeting provides a platform for clinicians from primary and secondary care to come together to design the best possible services for their patients.

Programme budgeting is also an essential source of information to support the QIPP (quality, innovation, productivity and prevention) programme. The QIPP ‘right care’ work stream is producing programme budgeting resources to help commissioners. 

Work stream help

‘Right care’ aims to improve the value that commissioners get from their finite resources, while improving outcomes and patient experience. Rod Smith, finance director, NHS West Kent has said this is about ‘nothing other than doing the right things, in the right ways and at the right costs – with a serious dose of equity (fairness) woven in.’  It focuses on highlighting, identifying and addressing unwarranted variation in practice. Programme budgeting provides the perfect vehicle to do so.

One output of ‘right care’ will be a set of health investment packs. Every PCT will have a pack covering a specific programme budget.  The packs* highlight the opportunities for commissioners to use programme budgeting and marginal analysis to underpin health investment decisions.  They also demonstrate the power of combining data sets to show the relationships between the inputs, outputs, spend, and health outcomes. 

Although compiled at PCT level, much of the information is available at GP practice level. In future years, the programme budgeting data collection will be developed further so that GP consortia will have more accurate, timely and detailed information on spend.

Finance staff play a vital role in producing robust programme budgeting data. They need to assimilate data from a range of sources and work closely with information and contracting teams to produce reliable figures.

Many PCTs are already strengthening their own data by analysing expenditure using the purchase price of services as well as using local provider reference costs. In response, the Department of Health plans to move to a price-based programme budgeting return in future years. The Department has also published a best practice guide to preparing programme costs using local price data, including guidance on analysing programme costs across care settings.

A data collection template that enables costs to be analysed across care settings is also being piloted. The new return will be piloted for 2009/10 expenditure data and the date for submission is 26 November. This will create challenges for some PCTs but will result in a much richer dataset for benchmarking. 

The Department intends to discontinue collecting programme budgeting data based on reference costs once the new methodology is sufficiently robust. This will result in a more streamlined collection process in future years.

The key is for finance staff to start thinking now about how they can have the best possible financial information to support effective commissioning. The programme budgeting commissioner price-based return provides a framework to support this. By producing reliable programme budgeting data, finance staff can ensure the most efficient and effective use of limited funds. Most important, they can play a vital role in improving the health of their local communities.

* More details at www.networks.nhs.uk/nhs-networks/health-investment-network