'Crude' spending estimates risk CCGs' funding

NHS chief executive Sir David Nicholson wrote to primary care trusts a fortnight ago, giving them just six weeks to submit returns for their total 2010-11 spending broken down to practice population level.

But commissioning experts warn “crude estimates” would have to be used to gauge more than half of the spending. These estimates will be used to help set indicative allocations for clinical commissioning groups in 2012-13, ahead of the allocation of real budgets the following year.

NHS Confederation deputy chief executive and PCT Network director David Stout said the exercise would be feasible for commissioners’ spending on GPs and secondary care purchased on a payment by results tariff. But he added: “Once you get beyond acute care it gets more and more difficult.”

“If [the Department of Health] made actual [allocation] decisions based on that data and it proved inaccurate it could have consequences for commissioners, and they would have to make sure they didn’t build in catastrophic consequences,” he warned.

The danger, he said, was that some CCGs could find they “couldn’t afford to run their health system” while others would get “way too much money to run their current health system”.

Large areas of PCT spending, such as mental health or community services, are currently paid for on “block contracts”, rather than per individual episode of care.

PCTs do not “necessarily” have “good information on practice-based use of, say, community nursing and so on”, Mr Stout said.

He estimated that a quarter of PCT budgets were spent on acute care using the tariff mechanism, while up to 10 per cent went to GPs. For the remaining portion of PCT expenditure – estimated by HSJ to be 65 per cent of the total – Mr Stout said PCTs in many areas in many areas would probably have to make “pretty crude estimates”.

He added: “Can they design a system which is both fair, and doesn’t cause such huge disruption that the implications of that damage patient care?”

British Medical Association GPs committee deputy chair Richard Vautrey expressed “huge concerns about the whole resource allocation process”.

“If you change the allocations system at the same time as creating new organisations it’s a recipe for real challenge and potential chaos for many emerging CCGs,” he said. “You could have the best management in place, but if you get the wrong financial allocation you’re doomed from the outset.”

Sir David’s letter said the shadow allocations given to CCGs next year would “support engagement and feedback on our approach, which we can then fine tune for 2013-14”. He admitted the six week timescale allowed “only a short time” to finish the exercise.

Dr Vautrey said it would take “a lot longer than that” to unpick CCG-level spending, and called on the DH to “listen to the feedback they get from the service, and not just fine tune, but make real changes as a result of that process”.

NHS Alliance chair Michael Dixon said: “We need to get the information as accurate as it can possibly be, and we need to be fairly fearsome in getting inaccuracies ironed out in that shadow [allocations] year.”

Dr Dixon added: “There will be fisticuffs, there’s bound to be, with some people saying they have got unfair allocations. There needs to be some process for deciding [those issues].”

He said he believed the late timing of the DH’s request for information was due to the “pause” in the passage of the Health Bill. “A lot of things have been waiting to come out until the pause is over,” he said. “I think we’ve lost time to some extent, and the CCGs have had their wings clipped by it.”

A DH spokesman admitted there were “challenges associated with how spends not managed through a mandatory tariff are attributed to individual practices”.

He added: “That is why we have asked PCTs to use whatever approach is most appropriate to their local circumstances, such as the local adoption of a non-mandatory tariff, rather than imposing a one size fits all approach.

“All PCTs will have to report the method, or methods, of attribution used.”