Unmet need in healthcare funding allocations

The Academy of Medical Sciences, supported by the British Academy and NHS England have undertaken some policy work on unmet need in healthcare, aimed at informing NHS England’s review of its funding allocations formulae.

The NHS allocations formulae, which direct over £100 billion of funding to CCGs, primary care and specialised service are designed to address differences in the needs of the population across different regions. These formulae are developed by NHS England with assistance from the Advisory Committee on Resource Allocation, which consists of independent experts.

“Unmet need” stems either from people being unable or unwilling to access NHS services for their health problems, or from patients receiving inadequate care once in the care of the NHS. The allocations formulae use data of service utilisation to adjust the allocations based on geographical need. However, if the geographical distribution of unmet need does not correlate to service utilisation (“met need”), there will be a disparity of funding. As such, the allocations formulae include an assessment of unmet need by using a proxy measurement, standardised mortality ratio for those aged under 75 years of age (SMR<75), which measures excess deaths below the age of 75. This proxy currently drives approximately £9 billion of funding.

Whether SMR<75 is an effective proxy or whether there is a more reliable measure of unmet need has been a source of debate for NHS England and ACRA for many years. NHS England have sought to continually improve the allocations formulae by reviewing the evidence for a better measurement of unmet need that could be used in the allocations formulae.

In 2015, the independent Advisory Committee on Resource Allocation commissioned a literature review on unmet need from the Centre for Health Economics at the University of York. The primary finding of the review was that there is not presently sufficient published research that would meet the requirements of providing evidence of unmet need to support resource allocation. However, the review also suggested that further research in this area could be valuable, should it be sufficiently resourced so as not to duplicate smaller scale work already available.

As a result of these findings, NHS England approached the Academy of Medical Sciences to organise a roundtable aimed at establishing whether further research is capable of improving the allocations formulae to account for unmet need. For improvements to be made to the formulae there are two possibilities: a reliable assessment of unmet need or a more robust proxy measurement than SMR<75.

Participants agreed on a number of potential projects that could better assess unmet need for use in the formulae, including:

• A comprehensive literature review of the evidence for assessing unmet need.
• Utilising existing data sources such as primary care data, longitudinal cohorts and health surveys.
• Creating a bespoke data source for assessing unmet need.

The summary meeting report of the roundtable can be download from the sidebar on the right of this page.

The findings of the meeting will be used by NHS England to inform their policies and direct their future work towards improving the formulae.