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I would like to thank Sheena Asthana for responding to my comments. I think this argument could be clearer if we distinguished between need, demand and utilization. It seems your argument is based on the premise that in more affluent parts of the country where a higher proportion of the population are elderly , there is a greater demand for health care and therefore greater resources should be allocated to these areas, than is provided through the current resource allocation formula. It would appear you are not actually arguing that there is a greater need (capacity to benefit) in these areas, or even that there is necessarily greater utilization.

There are two issues with this argument, firstly whether it is actually true that there is greater demand for health care in these areas and secondly even if this was true, the disastrous consequences of taking deprivation out of the formula, in terms of health equity, social justice and the allocative efficiency of the NHS. Let us leave aside the second point for now, and assume that the purpose of resource allocation is just to meet demand, and that we are not interested in social justice, allocating resources where they have the greatest capacity to benefit, or reducing health inequalities, even though both CCGs and the NCB are required to take these into account under the HSC act.

Is there evidence that health care demand is greater in more affluent areas where a high proportion of the population are elderly? You suggest differences in crude mortality rates indicate that this is the case. Crude death rates are not a good indicator of demand for healthcare, simply because, dying does not cause one to use or want to use healthcare. You are using this as a proxy for the amount of health care people are assumed to have used leading up to their death. This would be fine if there was no systematic differences in the length of time people are sick or disabled prior to dying. We know this is not the case, people in deprived communities will tend to spend a greater length of time with sickness and disability prior to the end of life. From the age of 65 people from the most deprived 20% of the population on average will spend just over 1 year longer with a limiting illness prior to death, than people from the most affluent parts of the country (http://www.ons.gov.uk/ons/rel/disability-and-health-measurement/sub-national-health-expectancies/2002-2005-and-2006-2009/stb-inequality-in-disability-free-life-expectancy-by-area-deprivation.html).

Using the crude prevalence of single diseases is also not ideal as an indicator of demand, since it does not take into account multiple commodities. Using the combined prevalence of all long term conditions from QOF registers would be better, when you do this the difference is less stark (22% in deprived areas vs 23% in affluent areas). However this doesn’t include common mental disorders and using diagnosed prevalence from GP registers is likely to underestimate prevalence in deprived areas where there is poor access to primary care. A better estimate would be from survey data. The crude prevalence of people reporting having any health problems lasting more than 1 year in the Annual population Survey/ LFS, is highest in the Tyne and Wear (43%), Merseyside (44%) and South Yorkshire (45%) and lowest in Inner London (28%) outer London (35%) and the South East (38%). So even with no age adjustment the burden of ill health, is still higher in poorer northern areas that in affluent Southern areas.

You question why more deprived areas with a similar prevalence of long term conditions as more affluent areas, may still have a greater demand for health care and require more resources, yet you go on to give an excellent explanation as to why this might be “a lack of adequate support at home for early discharge; differences in patient behaviour (e.g. with respect to adherence to medication and physical recovery regimes); differences in disease severity (e.g. due to late presentation); and differences in co-morbidity”.

You suggest that the lower utilization of health services in more affluent areas, could reflect, poorer access in these areas due to lower funding. There is evidence of poor access in more deprived parts of the country, so this same argument could be used to argue that utilization in these areas is actually an underestimate of demand.

Clearly age is an important determinant of demand and need for health services, but so is deprivation. I am not arguing that age should be taken out of the resource allocation formula. It is however is clearly not the case that “Age trumps poverty”, when all conditions are taken into account, the crude prevalence of illness is actually greater in poorer parts of the country.

As health inequalities rise, and the difference in life expectancy between deprived and affluent areas of the country increase, the situation may arise that demand for health care is lower in poorer parts of the country as people die before they can take advantage of the latest medical advances that can prolong life and independence at ever greater ages. Whilst on the other hand these services are demanded at greater levels in more affluent areas, where advantage in other spheres (wealth, education, employment etc) has enabled people to live long enough to take advantage of them. The just response to this however would seem to be allocate resources to reduce these health inequalities, rather than to exacerbate them by taking further resources away from already disadvantage populations.