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Personal health budgets

How a PSSRU evaluation pointed the way to giving patients greater control over their health care

Care for people with long-term conditions is different from care for acute conditions. It affects people’s quality of life on an ongoing basis so it requires a much more holistic or ‘personalised’ approach. The idea of personalisation is that the individual should be very much at the centre of their own care plan, rather than a passive recipient. In this context the aim of personal health budgets (PHBs) is to facilitate a much greater dialogue and mutual decision making between the patient, their family and the clinician. While it is true that patients may not have a technical understanding of health, there are many who are expert by experience and able of being much more involved in decisions around their own care. PHBs are a way of facilitating and empowering the patient in this respect.


A PHB is an amount of money to support the identified healthcare and wellbeing needs of an individual. Central to the PHB approach is a patient’s care and support plan which is designed and agreed by the individual and their local NHS team, setting out how the budget will be spent to meet the defined goals. Mainstream health services – hospital care, GP services, and medicines – are not included in the PHB budget, which does encompass community health services, social care, well-being services, therapies, and nursing outside hospital. The idea came at least partly out of the whole drive for person-centred care for people with long-term conditions. The argument goes that putting the budget in the hands of the individual changes relationships in a fundamental way. The overall approach is also about breaking down the traditional silos from which these services operate, through giving the patient control of resources that can be used to acquire their chosen services regardless of which agency provides them. The prevailing demarcation between health and social care is not supposed to apply – especially as from an individual’s point of view the distinction often seems irrelevant.


The PHB programme was launched by the Department of Health in 2009 with 64 pilot sites. Of these, 20 were selected as ‘in-depth’ sites for a patient-level evaluation. Just over 1,000 individuals were recruited into each arm of the study. Across the sites, implementation of PHBs was carried out in different ways, with variations in what services could be purchased, how the budget was managed, and how the size of the budget was calculated. PHBs are not specifically about merging health and social care budgets but this did happen in several pilot initiatives. The then Primary Care Trusts were supposed to work in partnership with local authorities over PHBs so it was expected that if the person was also a social care recipient, a way would be found to combine important budgets.


The evaluation was led by PSSRU Kent, in collaboration with the Social Policy Research Unit (University of York), Imperial College London and the LSE. The aim of the evaluation was to identify whether PHBs can help people achieve better health and social care outcomes than conventional methods of health service delivery and, if so, which models work best for which types of patients. The key findings were that: PHBs improved people’s care-related quality of life and psychological well-being; there was no overall effect on clinical (‘health status’) outcomes (in contrast to fears that greater patient control could lead to adverse health outcomes); benefits were more marked among people with higher levels of need; and PHBs worked better when there were fewer restrictions on their use. Overall, on the basis of the improvements in care-related quality of life, the study found that PHBs were highly likely to be cost-effective (at the 90% confidence level), particularly for people who get NHS Continuing Healthcare and those who use mental health services.


On the health side PHBs represent a significant departure from conventional ways of working. Our findings supported the policy and helped to make the case for rolling out PHBs and helped to target implementation. After the 2012 publication of the evaluation, the Government committed to rolling out PHBs  for people who are eligible for NHS Continuing Healthcare, one of the groups for whom they were shown to be particularly cost-effective.  Under the policy, these individuals from April 2014 have had a right to ask for a PHB and this becomes a ‘right to have’ from October 2014. Clinicians can also offer PHBs to others that they feel may benefit from the additional flexibility and control. The NHS Mandate also sets an ambitious objective that people with long term conditions who could benefit from a personal health budget will have the option to hold one, including one delivered by direct payment, from April 2015.


Follow-up work since 2012 has focused on the longer term health service implications of PHBs and also on how people have changed their care and support patterns away from traditional NHS and social care services. A second stage of the evaluation started in April 2014, led by Dr Karen Jones of PSSRU Kent, who also ran the original evaluation. For this next work we will return to the original evaluation group wherever possible, and also enrol new participants who have taken up PHBs since the original pilots.


Interviewed by Teresa Poole

Professor Julien Forder joined the University of Kent branch of PSSRU in 1992 and moved to PSSRU at the London School of Economics and Political Science when it was set up in 1996. In 2007 he returned to PSSRU Kent as Professor of the Economics of Social Policy, initially as Deputy Director and then Director of PSSRU Kent. Here Professor Forder explains the 2012 PSSRU-led evaluation of the impact and cost-effectiveness of personal health budgets and how its findings endorsed a radical policy move to give some chronic care patients control of a budget to meet identified health care and well-being needs.

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