New developments in resource allocation December 2011 © Nuffield Trust PBRA (person-based resource allocation): A resource allocation formula at general practice level based on individual level characteristics

The Person-based Resource Allocation (PBRA) project © Nuffield Trust Team of experts working with Nuffield Trust from 2007 Initial purpose was to develop budgets for practice-based commissioning based on individual patient data Coverage: secondary care, prescribing, community health services

Reviews of resource allocation in English NHS Hospital and Community Health Services, 1976 to present © Nuffield Trust Drawn from Bevan, and Bevan and Van der Ven Note:RAWP = Resource Allocation Working Party RoR = Review of RAWP AREA = Allocation of Resources to English Areas CARAN = Combining Age Related Additional Needs (9) YearNameAllocations to Approximate population size Years applied 1976RAWP14 RHAs3m77/78 – 90/ RoR14 RHAs3m91/92 – 94/ University of York 14 RHAs 192 DHAs 3m 250,000 95/96 – 01/ AREA303 PCTs175,00002/03 – 06/ CARAN152 PCTs350,00007/08 –

Resource allocation in the NHS, England Fair shares CARAN DHPCTPractice PCT © Nuffield Trust

Person-based Resource Allocation     Practice population £10,000 per person per year £1,000 per person per year £100 per person per year General population © Nuffield Trust                                                     

Modelling principles

Linking the data sets for analysis © Nuffield Trust

Modelling © Nuffield Trust Hospital-based expenditure excluding maternity and mental illness Modelled hospital expenditure in year t as a function of: – Age and sex (36) – Diagnostic categories from hospital utilisation in years t-1 and t-2 (152) – Attributed GP and small area needs characteristics (135) – Attributed small area supply characteristics (63) – PCT (152) Note: did not consider variables with potentially adverse incentive effects, eg number of encounters

Results from testing various models predicting costs for 2007/08 using data from 2005/06 & 2006/07 © Nuffield Trust Individual Validation Sample Practice Validation Sample Individual (n=5,205,747) (Individuals n=5,445,559 Practices=797) ModelSet of variablesR² Model 1:age and gender Model 2:Add 152 morbidity markers Model 3:Add 152 PCT dummies Model 4:Add 135 attributed needs & 63 supply Model 5:Reduce to 7 attributed needs & 3 supply

Using the formula to allocate to practices © Nuffield Trust ‘Freeze’ supply variables at national levels For each individual, calculate predicted NHS hospital costs For each practice calculate average costs in each age/sex category Assign age/sex specific averages to all individuals in practice – to address data lags and changes in registration Share out PCT budget according to practices’ total predicted expenditure

Comparing observed and expected costs at practice level, by practice population size, 2007/08

Results applied in acute component of the Fair Shares Toolkit © Nuffield Trust

Phase 3 Objectives: in progress © Nuffield Trust Refresh existing PBRA model using more recent data (for allocations 2011/12) Develop improved PBRA model (for allocations 2012/13) Model a variety of risk sharing arrangements (to inform shadow CCG and NHS Commissioning Board)

December 2011 © Nuffield Trust Sign-up for our newsletter Follow us on Twitter (