No need to weight communitry health programmes for resource allocation?

The NHS Executive has recently implemented modifications to the weighted capitation formula for distributing Hospital and Community Health Service (HCHS) funds in England (NHS Executive, 1994a). Although this was based on some technical work commissioned by the Executive from a team of statisticians and health economists at the University of York (Carr-Hill et al, 1994), the Department of Health decided to apply the needs weights they proposed to only 76% of expenditure. As shown in a previous Discussion Paper (no. 134: Peacock and Smith, 1995), this considerably dilutes the redistributive impact of the formula. In this paper, the authors show how many of the programmes covered by the 24% of expenditure which are given zero weight relate to overall policy objectives such as the reduction in incidence of key conditions, early diagnosis and referral and early discharge. Achieving these targets requires a range of community programmes. When examined in detail, the majority of these community-based programmes are dealing with conditions which are related to environmental degradation, socio-economic deprivation and long standing morbidity. Moreover, a review of the epidemiology of those conditions demonstrates that they are associated with the needs weights which have been used to distribute the other 76% of the HCHS expenditure. The authors show the effect of distributing the resources for community programmes on target allocations according to different methods. If the “full” York formula or the square root of the Standardised Mortality Ratio (the basis of the previous formulae) is used, this means that the ten most fortunate authorities are gaining – and the least ten fortunate losing – between 3% and 5% through the DoH formula that has been implemented. However, if monies were to be distributed according to the evidence, the nine authorities are losing between 7% to 11% and ten authorities are gaining over 6% through the implementation of the DoH formula. Of those losing at this level are all inner city areas; six ain London and the others in Birmingham and Manchester. Of the 20 districts losing 5% or more are districts containing a higher proportion of inner city areas.