NHS Funding (Ageing)

Sarah Newton Excerpts

Tuesday 25th March 2014 Westminster Hall

[Dr Coffey]

I agree with my hon. Friend. Funnily enough, I do not think that the formula was strong enough in reflecting the demands of age. It could have gone a lot further. The sparsity challenges are also a constant issue for those of us who represent rural seats. There is no doubt that a patient’s health care experience is somewhat diminished when a cardiac check-up means a 200-mile round trip. I realise that we cannot have a cardiac hospital within five or 10 miles of everybody—that might be the case in London, but I will not get into the London health funding debate. There is no doubt, however, that such trips are not helpful with regard to the patient experience. The funding formula has had negative consequences. We have seen a more rapid reconfiguration and regionalisation of services. The quality of care for patients has been affected and there are funding challenges. The problem is particularly acute where there is a high proportion of elderly patients. That is not good enough.

[Sarah Newton (Truro and Falmouth) (Con)]

My hon. Friend is making a powerful case for patient care in rural communities and I wholeheartedly agree with her. Does she agree that the market forces factor is having a negative impact on rural communities in poorer parts of the country where average incomes are much lower? People within the NHS and the care system are often paid national wages, but the funding formula discounts for local wages.

[Dr Coffey]

My hon. Friend makes an interesting point. I have not gone into that level of detail and do not have that level of understanding, but she makes an important contribution to the debate. Local clinical commissioning group and NHS trusts must contend with that challenge and should make that point to the board of NHS England.

I come back to the formula. I said in response to my hon. Friend the Member for Warrington South (David Mowat) that the focus on age may have slightly increased, but that it did not go far enough. The correlation between age and per capita funding increased only marginally between the old formula and the partially adopted current formula. South Sefton receives 40% more per capita than Ipswich and east Suffolk, but it has 50,000 fewer pensioners and a lower proportion of pensioners. Life expectancy in my part of Suffolk is considerably higher than in others, which is good, but that does not necessarily mean that people, in particular the elderly, do not have complex health needs that need addressing. At the moment, the formula continues to discriminate against the elderly and even further against people in rural areas.

--- Later in debate ---

[Dr Poulter]

It may be helpful if I outline the way the new formula works and how some of the weighting has changed, which will help to address the point my hon. Friend has just made and shed more light on the direction of travel that is under way.

The new formula uses a new indicator to recognise how health inequality should be reflected, which is based on the standardised mortality rate for those aged under 75. Previously, adjustment has been made on the basis of a measure of disability-free life expectancy. The new indicator is technically better, in that it can pick up pockets of deprivation within more affluent areas. The formula focuses much more on real population need, rather than taking a blanket approach across the population.

The new formula moves to the more powerful method of using individual rather than small area utilisation data—this is fundamental to the formula—to derive estimates of need. The main factors in the model are age, gender and 150 morbidity measures from the diagnoses of admissions to hospitals. That picks up on the point that my hon. Friend just raised. The formula looks at the pressure of long-term illness. Those 150 morbidity measures will pick that up. The increased need for health care in deprived areas is captured in the base formula by directly taking account of much of the increased need in deprived groups. In addition, further adjustments are made for factors such as the claimant rate for key benefits. That ensures that the model captures increased need that is linked to deprivation but is not linked to earlier utilisation of hospital services.

The new formula reflects more up-to-date data on population growth and measures population based on registered GP lists, rather than population projections based on the census. I am sure we can all recognise that where there has been growth in a population or changes are happening at local level, basing the formula on up-to-date GP lists is a much more accurate way of reflecting the health care needs of the local population than basing it on a 10-yearly census.

The new formula also reflects the responsibilities of CCGs rather than PCTs, as my hon. Friend outlined in her contribution. CCGs are not responsible for specialist services or primary care, although of course NHS England is now also taking over responsibility for the GP contract, as she will be aware. As a consequence, it is important to stress that the new formula for allocating funds to CCGs follows the advice provided by ACRA. A strong element of the allocation is focused on age. The primacy of age, an ageing population and the needs of older patients are very much built in, as are the needs of patients with long-term conditions. There is still a strong weighting for deprivation.

[Sarah Newton]

How does my hon. Friend the Minister feel that the market forces factor is reflected in the new formula?

[Dr Poulter]

These are obviously factors that NHS England will keep under review and take advice on from ACRA, but importantly, the new funding formula is not based on census data every 10 years but on real-time information coming in from GP practices. It looks at the health care needs of local populations, at deprivation, at areas where there are groups of patients with multiple medical co-morbidities. We know that as people live longer and our NHS is more successful, that will of course throw up new challenges. People are living longer not just with one long-term condition, but sometimes with two, three or four. Someone with dementia may also have heart disease, diabetes and a whole host of other conditions. A much more accurate reflection of real-time patient information is used to help set and adjust the formula for future years, and I think we would all welcome that. It is all part of having an independently set formula, rather than one based on the whims of a particular Government.

Almost two thirds of total NHS funding, as we are aware, now goes to clinical commissioning groups, which have the clinical expertise and local knowledge to best commission health services according to local needs and priorities. We are very proud that, as part of our reforms in 2012, we ensured a clinically led NHS at local level. Doctors and nurses are now making decisions for patients, which is already leading to improved services not just in Suffolk but throughout the country, because it is ensuring that the money from the increased budget that we are giving the NHS is being spent in a way that focuses on the needs of patients.

The Government have been able to ensure real-terms growth in funding until 2015-16, despite the stark financial challenges that we face as a country, and we should be very proud of the fact that we are continuing to put more money into the NHS. That means that NHS funding in England will be almost £15 billion higher in cash terms in 2015-16 than it was in 2010-11, and spending will rise from £100.4 billion in 2010-11 to £115.1 billion in 2015-16. Importantly, transforming care and delivering more personalised care under the integrated health fund—the £3.8 billion fund that my right hon. Friend the Chancellor of the Exchequer set up last year—is an important part of ensuring that that money is spent not just more efficiently, but in a more patient-centred way, particularly for patients with long-term conditions, both in Suffolk and in other parts of the country where there are many older patients.

In concluding, I want to highlight the fact that although, as we have already discussed, every CCG is receiving an increase in funding, the three CCGs in Suffolk in particular have seen funding growth. Ipswich and East Suffolk CCG’s funding allocation will increase by 2.85% in 2014-15 and by 2.19% in 2015-16 to reach £412.4 million in that year. As a result of the new funding formula that has been put in place, Suffolk is doing well, as are many other parts of the country.

Having a formula that is independently set according to clinical need and population information, and that is up to date and accurate, puts us in a much better place properly to look after the needs of patients, be they young or old, in the years ahead. That formula and the Government’s bold decision to ensure that it is independently set puts us in a strong position to deliver high-quality care for older people. That, together with the £3.8 billion integration fund, means that we will radically transform and improve the way in which we deliver care.