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Prioritisation and Resource Allocation Dr. Arun Ahluwalia Dr. Carol Chatt.

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1 Prioritisation and Resource Allocation Dr. Arun Ahluwalia Dr. Carol Chatt

2 In the next 5 years the NHS will have to set out more clearly what is – and what is not – available to patients free at the point of use on the NHS. Do you…. Strongly agree Tend to agree Tend to disagree Strongly disagree Don’t know ?


4 Prioritisation We saw earlier that when demand exceeds available resources, choices have to be made. Choices implies priorities



7 What is rationing? The allocation of resources, services or goods under some rational, emotional or political criterion Is this the same as prioritisation or resource allocation?

8 Implicit and Explicit Rationing Implicit rationing: care is limited, but neither the decisions, nor the bases for those decisions are clearly expressed. Explicit rationing: care is limited and the decisions are clear, as is the reasoning behind those decisions.

9 Rationing in the UK “Rationing in Great Britain has been implicit…It is a silent conspiracy between a dense, obscurating bureaucracy, intentionally avoiding written policy for macroallocation (rationing), and a publicly unaccountable medical profession privately managing microallocation so as to conceal life and death decisions from patients” (Crawshaw, 1990)

10 Explicit methods of rationing 1.League tables 2.Programme Budgeting and Marginal Analysis (PBMA)

11 1. League Tables Economic evaluations produce information on cost-effectiveness If using comparable outcomes (e.g. QALY) can ‘rank’ according to cost-effectiveness Can use resultant ‘league table’ to allocate resources to most cost-effective first E.g. The Oregon Plan

12 The Oregon Plan In 1989, the state of Oregon embarked on a controversial experiment in the financing of health care. The state planned to add many uninsured people to the Medicaid program and to pay for this expansion by reducing the Medicaid benefit package — more people would be covered, but for fewer services. In 1991, Oregon ranked more than 700 diagnoses and treatments in order of importance. The state legislature then drew a line at item 587; treatments below the line would not be covered. Oregon had openly embraced the “R word”: rationing On February 1, 1994, the Oregon Health Plan, with its prioritized list, went into operation Thomas Bodenheimer The Oregon Health Plan — Lessons for the Nation N Engl J Med 1997; 337:651-656

13 In 1987, Coby Howard contracted acute lymphocytic leukemia and needed a bone marrow transplant. Earlier that year, the Oregon legislature had discontinued Medicaid coverage for organ transplantation

14 Problems with League Tables Limited data on cost-effectiveness Studies to determine cost-effectiveness use different methods – e.g. compare new treatment to placebo / current treatment Determining cut-off point Needs constant updating

15 2. PBMA combines both technical and political rationing methods Principles: – If £1 were to be made available that £1 should be invested in an area in which the most benefit would be gained – If £1 were to be disinvested that £1 should be taken away from an area where the least benefit would be lost.

16 Which programme would you invest in? Which programme would you disinvest in?

17 Steps of PBMA 1. Choose a set of meaningful programmes. 2. Identify current activity and expenditure in those programmes. 3. Think of improvements. 4. Weigh up incremental costs and incremental benefits and prioritise a list. 5. Consult widely. 6. Decide on changes. 7. Effect the changes. 8. Evaluate progress. Brambleby and Fordham, 2003. What is PBMA? Oxford University

18 PBMA Main objective of PBMA is to reallocate resources so that benefits are maximised Successful implementation of PBMA requires resources to be shifted from the disinvestment list to the investment list But, – Disinvestment is difficult – PBMA is data hungry and time consuming – Difficult to obtain a representative advisory panel

19 Methods of rationing In your area of work, how do you deal with high demand?

20 Methods of rationing Delay – Create waiting lists Denial – Non-urgent or unsuitable cases are not done

21 Possible methods for quantity rationing In groups of 4 choose your preferred 3 methods of quantity rationing and your least favourite 3 methods. (10 minutes)

22 In Summary, Prioritisation is inevitable in a resource limited health care system PBMA is attractive to decision-makers – Seems ‘rational’ – Supported by DoH However, it is not easy – Increasing the input of various stakeholders may shift the culture of the public / media to accept rationing

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