1. Name of the proposal (policy, proposition, programme, proposal or initiative)*
PSS Needs Based Target Allocations
*Proposal: We use the term proposal in the remainder of this template to cover the terms initiative, policy, proposition, proposal, or programme.
2. Brief summary of the proposal in a few sentences
To introduce over time needs-based allocations to integrated care systems (ICSs) in respect of the funding of specialised services for their populations. This requires the following steps:
- Establish population-based allocations for specialised services, by attributing existing flows to providers for these services to the ICSs where their patients are registered.
- Establish baselines (based on previous year’s funding).
- Determine target allocations based on relative need and relative unavoidable costs.
- Determine distances from target, based on long term financial trajectory.
- Calculate base uplift of baselines, using estimated pressures.
- Determine pace-of-convergence (how far ICS areas are moved closer to their long-term target allocations each year), balancing within the available resources, stability against the gains in equity and efficiency achievable through movement to target allocations.)
- Promulgating variations analyses that aid ICSs in understanding why their resource use currently differs from Target Needs-Based Allocations, so that the movement towards target can be accompanied by policies to enhance efficiency or access as appropriate.
It is proposed to move to population-based allocations in shadow form from April 2022 and definitively from April 2023 for the bulk of specialised physical health services by value, excepting highly specialised services (and the Cancer Drugs Fund/Innovative Medicines Fund). Most mental health services are already allocated on population footprints; these were constructed to support contracting for these services from provider collaboratives. These cover respectively adult secure, specialised child and adolescent mental health services (CAMHS) and adult eating disorder services.
It is proposed to introduce and to publish needs-based target allocations for specialised physical health services early in 2022, alongside a pace of change policy, and to use the target allocations subject to the pace of change policy to inform the setting of actual allocations from April 2023.
It is proposed to introduce and to publish needs-based target allocations for specialised mental health services later in 2022/3, alongside a pace of change policy, and to use the target allocations subject to the pace of change policy to inform the setting of actual allocations from April 2024, following the completion of the current terms of MH provider collaborative contracts.
3. Main potential positive or adverse impact of the proposal for protected characteristic groups summarised
Please briefly summarise the main potential impact (positive or negative) on people with the nine protected characteristics (as listed below). Please state N/A if your proposal will not impact adversely or positively on the protected characteristic groups listed below. Please note that these groups may also experience health inequalities.
Protected characteristic groups | Summary explanation of the main potential positive or adverse impact of your proposal | Main recommendation from your proposal to reduce any key identified adverse impact or to increase the identified positive impact |
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ALL | The national weighted capitation formulae are used to calculate ICS areas’ target shares of the available resources. Target shares are in proportion to each ICS’s population weighted by the need for health care services (such as that due to the age profile of the population). The modelling of need is itself a mechanism for investigating the extent of unmet need. The modelling determines what characteristics of individuals are systematically associated with need for specialised services. Where target allocations derived from these characteristics exceed historic use of services, that is evidence of unmet need. This unmet need, which setting target allocations helps to address, is typically associated with a number of protected characteristics, notably: · age · disability · ethnicity · sex. Other protected characteristics are not directly represented in the model. However, where groups with those characteristics have particular need manifest in their diagnostic history, the need model will recognise it, and movement towards target should facilitate its being addressed. The model also accounts for differences in unavoidable costs due to location in providing healthcare services between geographical areas across England. Moving allocations from a historic to a needs basis should facilitate increase in the equity of services, by funding need that is currently unmet, whether for those with protected characteristics or those with poor health prospects. This is the principal positive impact of the policy in reducing health inequalities and addressing equalities duties. To avoid destabilising services, and to ensure that the movement towards target yields benefits, variations analyses will underpin the setting of pace of convergence, and will be disseminated and engaged upon so that local commissioners of specialised services will recognise and be able to implement appropriate strategies to improve access or efficiency. No adverse impact is anticipated. |
Utilisation-based modelling is able to allow for and offset some but not all of the factors responsible for mismatch between service provision and need for health care services. In particular, where need fails to present at all, often due to deprivation, or where additional costs attend the treatment of socially disadvantaged groups, such need for health-care resource may escape utilisation models. (It is likely however that undiagnosed need will often be associated with other variables, so that the model will implicitly make some adjustment for this need.) Undiagnosed need may well contribute to health inequalities, or be suffered by those with protected characteristics. Nor will the model fully take into account the need for additional funding to address health inequalities. Separate work is underway to estimate and to adjust allocations to reflect unmet need not captured in the model and to support reduction in health inequalities. The Advisory Committee on Resource Allocation (ACRA) has recently initiated a review of the health inequalities/unmet need adjustment – this review was commissioned in the NHS Long Term Plan. An adjustment to target allocations, including for specialised services, will be considered following the completion of the review of the adjustment. That adjustment work addresses two related issues: i. The extent to which allocations should be adjusted to enable commissioning authorities to reduce health inequalities. ii. The extent to which allocations should be adjusted to recognise unmet need that is not captured in the utilisation-based modelling of need (particularly need that is undiagnosed, and need that might be more costly to address than allowed for in the utilisation model).
Work to assess and to adjust for undiagnosed need, and otherwise to direct funds to reduce health inequalities, is an important complement to the utilisation-based modelling of need; and both will be taken into account in due course in setting target needs-based allocations. It is also hoped over time to improve data collections relating to those protected characteristics currently lacking from datasets to allow estimation of need associated with such characteristics as sexual orientation. |
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Age: older people; middle years; early years; children and young people. |
Discussed above |
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Disability: physical, sensory and learning impairment; mental health condition; long-term conditions. |
Discussed above |
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Gender Reassignment and/or people who identify as Transgender |
The specific needs of those with protected characteristics connected to gender identity should be captured in the modelling through the diagnostic histories of the individuals concerned. |
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Marriage and Civil Partnership: people married or in a civil partnership. |
More data is needed to assess whether these characteristics should figure in an allocation formula. |
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Pregnancy and Maternity: women before and after childbirth and who are breastfeeding. |
The specific needs of those with protected characteristics connected to pregnancy and maternity should be captured in the modelling through the diagnostic histories of the individuals concerned. |
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| Race and ethnicity ** |
Discussed above. Note that ACRA has determined that modelled need should reflect systematic association of specialised service utilisation only with positive coefficients on ethnicity variables (where White British is the reference class); negative coefficients, which are thought likely to reflect failure to present need, are set to zero. |
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Religion and belief: people with different religions/faiths or beliefs, or none. |
More data is needed to assess whether these characteristics should figure in an allocation formula. |
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Sex: men; women |
Discussed above |
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Sexual orientation: Lesbian; Gay; Bisexual; Heterosexual. |
More data is needed to assess whether these characteristics should figure in an allocation formula. |
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** Addressing racial inequalities is about identifying any ethnic group that experiences inequalities. Race and ethnicity includes people from any ethnic group incl. BME communities, non-English speakers, Gypsies, Roma and Travelers, migrants etc.. who experience inequalities so includes addressing the needs of BME communities but is not limited to addressing their needs, it is equally important to recognise the needs of White groups that experience inequalities. The Equality Act 2010 also prohibits discrimination on the basis of nationality and ethnic or national origins, issues related to national origin and nationality.
4. Main potential positive or adverse impact for people who experience health inequalities summarised
Please briefly summarise the main potential impact (positive or negative) on people at particular risk of health inequalities (as listed below). Please state N/A if your proposal will not impact on patients who experience health inequalities.
| Groups who face health inequalities *** | Summary explanation of the main potential positive or adverse impact of your proposal | Main recommendation from your proposal to reduce any key identified adverse impact or to increase the identified positive impact |
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Looked after children and young people | Looked after children and young people have disproportionate need for child and adolescent mental health services. Equitable access for these services will be addressed in the corresponding specialised mental health needs based allocations model. | The CAMHS modelling would be enhanced if data from Local Authority databases can be brought together with health datasets, so that care records for looked after children and young people can reliably be joined (pseudonymously) to NHS care records. |
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Carers of patients: unpaid, family members. | Not directly captured in the modelling, but care-givers are likely to be amongst those suffering from access problems whose need might be revealed and addressed through the adoption of needs-based allocations. |
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| Homeless people. People on the street; staying temporarily with friends /family; in hostels or B&Bs. | The need of these groups are unlikely to be caught directly in the utilisation modelling that is the basis for target needs based allocations. Off model adjustments are required. | Should be captured in the Unmet Need Health Inequalities adjustment workstream described above. |
| People involved in the criminal justice system: offenders in prison/on probation, ex-offenders. | The criminal justice system is a common route into secure mental health services. Equitable access for these services will be addressed in the specialised mental health needs based allocations models. | The secure MH services modelling would be enhanced if data from MOJ databases can be joined, so that care records for those with a history of offending behaviours can reliably be joined (pseudonymously) to NHScare records. A data joining project has been initiated. |
| People with addictions and/or substance misuse issues | Should be covered by the MH allocations models. |
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| People or families on a low income | The utilisation model underpinning target needs based allocations captures needs of these groups only via any greater propensity to have greater morbidity in their health care record; little systematic impact of deprivation on utilisation is found, possibly due to late presentation of symptoms. | Should be captured in the Unmet Need Health Inequalities adjustment workstream described above. |
| People with poor literacy or health Literacy: (e.g. poor understanding of health services poor language skills). | ||
| People living in deprived areas | ||
| People living in remote, rural and island locations | The model estimating need will reveal systematic shortfalls in access to remote communities.
However, it is possible that the cost of serving such communities is higher, and an adjustment to allocations may be needed to allow for that. |
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| Refugees, asylum seekers or those experiencing modern slavery | Outside scope. |
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| Other groups experiencing health inequalities (please describe) | See discussion against ALL in Section 3, which describes how the needs-based target allocations methodology should systematically uncover unmet need. | See discussion against ALL in Section 3, which describes how the supplementary research programme designed to investigate the extent of undiagnosed need and the cost of reaching and serving groups suffering from health disadvantage, all to inform a Unmet Need Health Inequalities adjustment to the formula. |
*** Please note many groups who share protected characteristics have also been identified as facing health inequalities.
5. Engagement and consultation
a) Have any key engagement or consultative activities been undertaken that considered how to address equalities issues or reduce health inequalities? Please place an x in the appropriate box below.
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Yes X |
No |
Do Not Know |
b) If yes, please briefly list up the top 3 most important engagement or consultation activities undertaken, the main findings and when the engagement and consultative activities were undertaken.
| Name of engagement and consultative activities undertaken | Summary note of the engagement or consultative activity undertaken | Month/Year | |
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1 |
Engagement with specialised services public health network
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Meeting held with Prescribed Specialised Services Public Health Network to identify areas of unmet need, particularly that undiagnosed and unlikely to be captured by the needs-based allocations modelling of utilisation. The meeting agreed to investigate a number of areas to try to identify extent of such need and to support estimation of an adjustment. This led to the establishment of analytical and clinical work on cancer, cardiac, renal and neurosciences. |
December 2020 and on going. |
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2 |
Engagement with Clinical Reference Groups and other clinical leadership for each of major clinical services: cancer, cardiac, renal, neurosciences, adult secure mental health services, CAMHS, HIV.
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Reference groups have been set up to guide the development of the needs based allocation programme for specialised services. For each one, the aim is twofold: to validate the modelling of need for that service on the basis of individuals’ diagnostic history and small area characteristics; and to oversee investigation of further need that may be missing from the modelling. |
From June 2020 and ongoing. |
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ACRA engagement with Health Inequalities and Unmet Need adjustment task and finish group
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ACRA has set up a Task and Finish Group for the investigation the Health Inequalities and Unmet Need adjustment for all allocations models. This group has wide membership including those with expertise in these areas. The group has now issued a report with recommendations for further research. The specialised services allocations team has engaged with the Task and Finish group and specialised services issues are reflected both in the report and in the recommended further work programme. |
From Dec 2020 and ongoing. |
6. What key sources of evidence have informed your impact assessment and are there key gaps in the evidence?
| Evidence type | Key sources of available evidence | Key gaps in evidence |
| Published evidence | ACRA papers including those pertaining to needs-based allocations for specialised services, and those for secondary services. |
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| Consultation and involvement findings | Engagement exercise running during Jan 2022 seeking comment from public and academia. |
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Research | This allocations programme is a research programme as described above. |
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| Participant or expert knowledge For example, expertise within the team or expertise drawn on external to your team | Input from CRGs/Public Health Network. |
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7. Is your assessment that your proposal will support compliance with the Public Sector Equality Duty?
Please add an x to the relevant box below.
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Tackling discrimination |
Advancing equality of opportunity |
Fostering good relations |
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The proposal will support? |
X |
X |
X |
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The proposal may support? |
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Uncertain whether the proposal will support? |
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8. Is your assessment that your proposal will support reducing health inequalities faced by patients?
Please add an x to the relevant box below.
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Reducing inequalities in access to health care |
Reducing inequalities in health outcomes |
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The proposal will support? |
X |
X |
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The proposal may support? |
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Uncertain if the proposal will support? |
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9. Outstanding key issues/questions that may require further consultation, research or additional evidence.
Please list your top 3 in order of priority or state N/A.
| Key issue or question to be answered | Type of consultation, research or other evidence that would address the issue and/or answer the question | |
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1 | Data linkage to Justice data for secure MH modelling in particular
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2 | Data linkage to data for looked after children for CAMHS modelling in particular
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3 | Absence of incompleteness of data assigning patients to Protected Characteristic groupings
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10. Summary assessment of this EHIA findings
This assessment should summarise whether the findings are that this proposal will or will not make a contribution to advancing equality of opportunity and/or reducing health inequalities, if no impact is identified please summarise why below.
Moving allocations from a historic to a needs basis should facilitate increase in the equity of services, by funding need that is currently unmet, whether for those with protected characteristics or those with poor health prospects. This is the principal positive impact of the policy in reducing health inequalities and addressing equalities duties.
11. Contact details re this EHIA
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Team/Unit name: |
Pricing and Incentives Team |
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Division name: |
Finance |
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Directorate name: |
Specialised Commissioning Directorate |
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Date EHIA agreed: |
20 December 2020 |
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Date EHIA published if appropriate: |
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