1. Setting Priorities Delivering Best Value Managing Scarcity: Experience from Tayside Danny Ruta

2. The doctor-manager divide ‘In a resource allocation context, doctors (can be) caricatured as taking the role of patient advocate while managers take the corporate, strategic view. Delivery of efficient (and in the case of the NHS, equitable) health care requires doctors to take responsibility for resources and to consider the needs of populations while managers need to become more outcome and patient centred.’ Ruta, Mitton, Donaldson et al, BMJ 2005, in press

3. Programme Budgeting & Marginal Analysis (PBMA) How resources are spent Costs and benefits of changes in spending Can operate at micro or macro level PBMA asks five simple questions about resource use

4. Programme Budgeting & Marginal Analysis (PBMA) 1. What are the total resources available for a programme? 2. On which services are these resources currently spent? 3. What services are candidates for receiving more or new resources (and what are the costs and potential benefits of putting resources into such growth areas)?

5. Programme Budgeting & Marginal Analysis (PBMA) 4. Can any existing services be provided as effectively, but with fewer resources, so releasing resources to fund items on the growth list? 5. If some growth areas still cannot be funded, are there any services which should receive fewer resources, or even be stopped, because greater benefit would be reached by funding the growth option as opposed to the existing service? Questions 1&2 = the PB bit Questions 3,4,5 = the MA bit

6. The ‘seven steps’ of PBMA 1. Determine the aim and scope of the exercise 2. Compile a programme budget (map of current activity and expenditure) 3. Form a marginal analysis advisory panel and stakeholder advisory groups 4. Determine locally relevant decision making criteria with input from decision makers and stakeholders

7. The ‘seven steps’ of PBMA 5.Advisory panel identifies options in terms of: - Areas for service growth - Areas for resource release through producing same level of output (or outcomes) but with less resources - Areas for resource release through scaling back or stopping some services

8. The ‘seven steps’ of PBMA 6.Advisory panel makes recommendations in terms of: - Funding growth areas with new resources - Decisions to move resources released through increased productivity to areas of growth - Trade-off decisions to move resources from one service to another if relative value is deemed greater

9. The ‘seven steps’ of PBMA 7.Validity checks with additional stakeholders and final decisions to inform budget planning process

10. 1. Determine aim & scope of exercise Example – Tayside Drugs & Alcohol Population < 500,000 Dundee, Angus, Perth & Kinross councils 3 DAATs from NHS to LA led

11. 1. Determine aim & scope of exercise Example – Tayside Drugs & Alcohol Aim: “To examine current provision of drug and alcohol services across Tayside; and to propose opportunities for management, service and financial benefits or improvements.”

12. 1. Determine aim & scope of exercise Example – Tayside Drugs & Alcohol Scope: Covering only drugs and alcohol services specifically for people with drugs and alcohol problems; Covering services delivered by Community Planning partner organisations across Tayside; Not including those services that are not specifically targeted at people with drugs and alcohol problems

13. 2. Compile Programme Budget Broad patterns expenditure & activity Clinically meaningful programme of services Raise questions about value for money

14. 2. Compile Programme Budget Example 1 – Tayside Drugs & Alcohol

15. 3. Form advisory panel & stakeholder groups Responsibility for developing criteria Generating options for change Assessing marginal benefits

16. 3. Form advisory panel & stakeholder groups Example – Tayside Drugs & Alcohol Advisory Panel CEO P&K Council 3 DAAT Chairs Trust Medical Director Mental Health Commissioner

17. 3. Form advisory panel & stakeholder groups Example – Tayside Drugs & Alcohol Advisory Panel CEO P&K Council 3 DAAT Chairs Trust Medical Director Mental Health Commissioner Professional Advisory Group Consultant Psychiatrist (chair) 20 Frontline service providers

18. 3. Form advisory panel & stakeholder groups Example – Tayside Drugs & Alcohol Advisory Panel CEO P&K Council 3 DAAT Chairs Trust Medical Director Mental Health Commissioner Professional Advisory Group Consultant Psychiatrist (chair) 20 Frontline service providers Scottish Drugs Forum 6 Service User Focus Groups

19. 3. Form advisory panel & stakeholder groups Example – Tayside Drugs & Alcohol Advisory Panel CEO P&K Council 3 DAAT Chairs Trust Medical Director Mental Health Commissioner Professional Advisory Group Consultant Psychiatrist (chair) 20 Frontline service providers Scottish Drugs Forum 6 Service User Focus Groups Project Team Me Psychiatrist Nurse 3 DAAT Co-ordinators Finance manager Community pharmacist

20. 4. Determine locally relevant decision making criteria Criteria to assess benefits gained/lost Relative weights for criteria importance

21. 4. Determine locally relevant decision making criteria Quality & Length of Life Quality of Service Feasibility Policy & Strategy Example – Tayside Drugs & Alcohol

22. 4. Determine locally relevant decision making criteria Example – Tayside Drugs & Alcohol

23. 5. Advisory panel identify the options Areas for service growth; Areas for resource release through producing the same outcomes with fewer resources; Areas for resource release through scaling back or stopping services; Areas where growth and resource release occur simultaneously

24. Example – Tayside Drugs & Alcohol 5. Advisory panel identify the options Professional advisory group generated options Assessed options against Quality/length of life & Quality of service criteria Project team collated evidence

25. 5. Advisory panel identify the options 23 Service Investment Candidates Example 1 – Tayside Drugs & Alcohol

26. 5. Advisory panel identify the options 23 Service Investment Candidates 31 Service Disinvestment Candidates Example 1 – Tayside Drugs & Alcohol

27. 6. Panel makes recommendations Example – Tayside Drugs & Alcohol Benefit-cost ratio = (weighted benefit x no. client beneficiaries) / cost

28. Example – Tayside Drugs & Alcohol 7. Validity Checks with additional stakeholders

29. Lessons from Tayside PBMA Study It is feasible to apply PBMA in practice Potential to bridge doctor-manager divide Addresses root cause of problem of managing scarcity – shared appreciation of opportunity cost (balance clinical autonomy & financial responsibility)

30. Lessons from Tayside “A Scottish NHS without market competition but with PBMA, result happiness. A Scottish NHS without a market and without PBMA, result misery”