The proposed Funding Formula for Public Health in Local

Authorities

Meic Goodyear

12 September 2012

Weighted Capitation since 1977-78

Population

Age-sex structure

Health needs Deprivation

Disability free life expectancy

Market Forces

This coversHospital and Community Services

Primary Care Commissioning

Prescribing

Management, including Public Health

Come April 2013

Public Health In NHS PCTs

Public Health England (eg emergency planning)

Public Health in Local AuthoritiesPH advice and support to CCGsJSNASexual Health (contraception other than GPs,STIs, Sexual Health promotion, HIV prevention)Drugs treatment

Commissioning BoardContraception through GPsHIV treatment & care

Funding Proposals 1 – Feb 2012DH: Baseline spending estimates for the new NHS and Public Health Commissioning Architecture

Ring fenced budget ~£2.2*109

Existing spend data collection 2010-11, raised for 2012-13

“We would not expect the LA public health ring-fenced grants to fall in real terms from the values in Annex A, other than in exceptional circumstances such as a gross error”

Funding Proposals 2 – June 2012Advisory Committee on Resource Allocation (ACRA) proposes a new formula for relative shares of the ring-fenced budget, which ignores historical patterns of spend, effectively eliminating localism from public health

Three components

Mandatory services

Non-mandatory services

Drugs services commissioned through DATs

Population Weighted by need

PopulationWeighted by need

Population Weighted by activity (76%)and need (24%)

With a market forces factor (Area Cost Adjustment)

Needs componentOne single indicator for all need

Standardised Mortality Ratios (SMR) age < 75At Middle Super Output Area level

To be used for determining the relative sizes of shares

SMR– fitness for purpose?

• Indirect Standardisation – National rates applied to local population

• Only valid for comparing local with national values• Cannot be validly used for comparing localities as the

method has no means of controlling for differences in the local populations

Possible valid alternative: Directly Standardised Rates, but absolute numbers of premature deaths are small at MSOA level, so DSRs might be unstable

SMR<75 – Relevance?

What does is say about:

- needs of the over 75 year olds?

- needs for contraceptive services?

- needs for STI services?

- needs for HIV prevention?

- anything else that does not contribute to mortality?

SMR <75: MSOA level

These are calculated (by APHO) in 5-year averages.

Even then their 95% confidence intervals are very wide.

Here’s what they look like for one Local Authority (Lewisham)

0

20

40

60

80

100

120

140

160

180

200

Each column represents an MSOA, with SMR<75 and 95% Confidence Interval

SMR<75

Average width of 95% CI: 48.2

Reason for the wide variability

Based on small number of events:Average deaths per 5 year period per MSOA is

115

National average width of 95% CI is 44 (per David Spiegelhalter)

What they do with SMR<75

Divide the MSOA into tenths of SMR<75 (they misuse the word decile, which does not engender confidence!)

Weight each tenth (weights range from 1 to 3) and apply the weights to the MSOA population

Sum the weighted populations to get a Local Authority weighted population.

Distribution of SMR<75 at MSOA level

SMR<75 by MSOA, 2006-2010 average,

England

0

20

40

60

80

100

120

0 50 100 150 200 250 300

SMR < 75

Number of MSOAs

When we overlay them on the deciles…

0

20

40

60

80

100

120

0 25 50 75 100 125 150 175 200 225 250 275 300

SMR <75

Number of MSOAs

Near the mean a small change in SMR<75 can result in an MSOA crossing a decile and attracting a different weighting.

Near the tails even a very large change makes no difference to the weighting

Year to year roll-forward

Can be thought of as repeatedly sampling from a distribution of

mean = current SMR, SD = current SD

for each MSOA

Simulation a possibility, but not enough time.

Data update

• The data in the ACRA paper and spreadsheet did not match the current data on the APHO website. The website was updated in March 2012, after the ACRA work had commenced.

• Run the ACRA model against the updated data and compare the results (the model recalculated decile thresholds)

Effect of one-year roll-forward

Average size of Local Authority change = +/- 1.1%Maximum loss = 3.5%Maximum gain = 7.1%

Number of MSOAs moving to a new weighting

Lower weighting 1365

Higher weighting 1384

unchanged 4032

Grand Total 6781All from the play of chance, and eachlikely to be reversed in future years

What the one-year roll-forward means for Public Health Funding in the South East

South East Region % change 2005-9 to 2006-10

-2% -1% 0% 1% 2% 3% 4%

Wokingham

Windsor and Maidenhead

West Sussex

West Berkshire

Surrey

Southampton

Slough

Reading

Portsmouth

Oxfordshire

Milton Keynes

Medway

Kent

Isle of Wight

Hampshire

East Sussex

Buckinghamshire

Brighton and Hove

Bracknell Forest

Local Health Inequalities (1)

• Consider Westminster (chosen as an extreme case)

• Range of SMR<75 2005-09: 34.6 to 138.9

• Range of SMR<75 2006-10: 32.2 to 142.7

• i.e. health inequalities by this measure increase between the two years

Local Health Inequalities (2)When we group the MSOAs by tenths we get

tenth year 1 year 2

1 7 9

2 5 4

3 2 1

4 2 4

5 3 1

7 1 1

8 2 2

9 2 2

Total 24 24

Average tenth for year 1 = 3.6Average tenth for year 2 = 3.4

Local Health Inequalities(3)

• So:

• Health inequalities have worsened, but

• Average weighting is lower

• Overall weighting is the average for the Borough.

Conclusions

• The proposed formula statistically misuses its chosen measure

• The proposal will build instability into the funding formula purely arising from the inherent uncertainty in the measure chosen

• The proposed formula will make no contribution to reducing health inequalities at the local level.

meicgoodyear@nhs.net