Institute of Psychiatry, London
Correspondence: Dr Jonathan Bindman, Clinical Lecturer, Section of Community Psychiatry (PRiSM), Institute of Psychiatry, De Crespigny Park, Denmark Hill, London SE5 8AF, UK
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ABSTRACT |
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Aims To compare expenditure on mental health services with allocation, and test the hypothesis that differences between them are to the disadvantage of services in deprived areas.
Method A comparison of routine expenditure and allocation data, and linear regression modelling of the ratio of expenditure to allocation.
Results The ratio of expenditure to allocation varies widely. Relative underspending occurs more frequently in deprived areas, although not in the four inner-London health authorities.
Conclusions The intentions of the York formula are not achieved in practice. The implications of the formula for mental health should be made explicit to health authorities, and shortfalls in mental health expenditure relative to allocation should be justified at a local level.
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INTRODUCTION |
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National comparisons of health authority expenditure on mental health care have not previously been published. In this paper we compare expenditure and allocation for all the health authorities in England. We test the hypothesis that the way in which resources are spent contributes to inequity, to the disadvantage of those areas with the greatest needs.
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METHOD |
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Special allocations for purchasing mental health services
In addition to the general allocation, health authorities receive other
sums, special allocations, intended for the purchase of mental health services
(Fig. 1). The largest of these
is the old long stay (OLS) allocation, to cover the continuing
care costs of individual patients with mental illness who were in hospital
prior to 1971, and patients with learning disabilities who were in hospital
prior to 1970. The total OLS allocation figures for each health authority in
1997-1998 were available from the NHS Executive
(1996), but the proportions of
the total allocated to patients with mental illness were not available
centrally. Regional offices provided details of the proportion of the total
OLS allocated to 21 authorities for patients with mental illness in 1997-1998.
For a further 52 authorities, regional offices provided these details for
1996, and for the remaining 27 authorities this proportion was provided for
1999. The 1996 or 1999 proportions were combined with the total OLS allocation
for 1997-1998 to estimate the total amount of OLS allocated to each authority
for patients with mental illness in 1997-1998.
A smaller special allocation, joint finance, has an identifiable mental health target element based on the community psychiatric index, and this was calculated from published data (NHS Executive, 1996) using a method similar to that used for the general allocation. Two other special allocations are available to purchase psychiatric care: the drug misuse allocation and the mental health challenge fund. The figure for the former is available from published data (NHS Executive, 1996) and that for the latter was supplied by the NHS Executive.
Mental health expenditure and service activity
The Department of Health collects data annually (the Common Information
Core, CIC) on the clinical activities which health authorities contract to
purchase from health trusts, and the associated expenditure. Total mental
health expenditure for 1997-1998 was derived from the expenditure on five
types of activity: in-patient, out-patient, day care, residential, and
community care for mental illness. The total expenditure on these activities
formed 12.345% of the total expenditure on all hospital and community health
services reported in the CIC. Other types of activity recorded in the CIC were
not costed, but were used in this study as possible explanatory variables to
model the relationship between expenditure and allocation. These variables
were: the total number of patients under the care of the service (in the
fourth quarter of 1997-1998) and the number of occupied bed-days purchased (in
the public and private sectors) for mentally disordered offenders, each
expressed per capita of the population served. In addition, two measures
derived from the CIC were used as crude proxies for the extent of development
of community services: the number of community psychiatric nurse (CPN)
contacts per capita, and the fraction of total expenditure which was spent on
in-patient beds.
Comparing allocation and expenditure
The absolute levels of allocation and expenditure, derived as described
above, are not directly comparable, because the programme weight of 11.08%
used in the calculation of the mental health general allocation in 1997-1998
was based on the proportion of total expenditure on mental health in 1992-1993
and 1994-1995, the most recent data available at the time. Changes in this
proportion over the intervening years need to be accounted for before
attempting comparisons for 1997-1998, and we therefore reworked the
calculation using a nominal programme weight of 12.345%, the actual proportion
of total expenditure on mental health in 1997-1998.
The estimated total allocation to mental health for each health authority was calculated by adding all the mental health special allocations to the mental health general allocation. Using a nominal programme weight as described has the effect of ensuring that our estimate of the national total allocation is approximately equal to the national total spend (Table 1), and therefore for an authority which is spending the amount on mental health services which is implied by the formula, expenditure and allocation should also be approximately equal.
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Comparisons between expenditure and allocation were made using both the absolute excess of expenditure over allocation, and the ratio of mental health expenditure to allocation in each health authority.
Measure of deprivation
We used the York Psychiatric Need Index, the main index of psychiatric need
included within the allocation formula itself
(Carr-Hill et al,
1994a), as a proxy for deprivation.
Statistical analysis
All data were analysed using the STATA software package
(STATA Corporation, 1997). The
ratio of expenditure to allocation was used as the dependent variable in a
linear regression model, using backward stepwise selection to identify a
simplified model (the criteria being P>0.05 for removal from and
P<0.1 for addition to the model). The Psychiatric Need Index and
the activity variables described above were entered into the model as
explanatory variables.
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RESULTS |
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The relationship between expenditure and allocation
As can be seen from Table 1,
the ratio of expenditure to allocation varies considerably, ranging from 0.55
to 1.48. The distribution is approximately normal, with a standard deviation
of 0.20. This alone suggests that if the allocation process is equitable, then
expenditure cannot be. The hypothesis that the inequity introduced by variable
expenditure acts to the disadvantage of areas with greater need can be tested
by regressing the expenditure: allocation ratio on the Psychiatric Need Index.
This shows a significant negative relationship, areas with greater levels of
need tending to spend less than their allocation on mental health services
(coefficient -2.55, 95% CI -4.1 to 1.0, P=0.001). However, the
relationship is not a strong one, only 9.2% of the variance in the ratio being
explained by deprivation. Figure
2 illustrates this with a scatter plot of the ratio plotted
against need, with the regression line described above shown on the graph. A
small number of more deprived health authorities are identified. It can be
seen that the four inner-London authorities appear as outliers, with high
levels of need, but high expenditure relative to allocation. By contrast,
Manchester and Liverpool, which also have high levels of need, spend less than
their allocation, consistent with the relationship shown by the regression
line. If the outlying position of the inner-London authorities is taken into
account by including a dummy variable for inner-London status in a linear
regression model, a considerably stronger negative relationship between the
ratio of expenditure to allocation and need is revealed (model 1,
Table 2), and the model
explains nearly 30% of the variation in the ratio. That is, the tendency of
areas of greater need to spend less in relation to their allocation is both
significant and of moderate strength outside inner London, although there is
still considerable unexplained variation.
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Our second hypothesis is that the relationship between expenditure and allocation is explained by the levels of service activity purchased. A number of measures of activity available in the CIC can be hypothesised to explain higher levels of expenditure in relation to allocation. It has been shown previously that the number of patients cared for by specialist mental health services is variable, even when need is taken into account (Bindman et al, 1999), and it might be that services which spend more are attempting to serve a greater proportion of their local population. The numbers of mentally disordered offenders for whom care is purchased is known to be particularly high in London (McCrone et al, 1997), suggesting this is a possible cause of excess expenditure over allocation. Health authorities purchasing services which have less well-developed community care, spending a high proportion of their resources on in-patient beds or having low levels of CPN activity, might also be expected to spend more in relation to allocation. Entering the activity variables into a stepwise linear regression model together with the York Psychiatric Index (model 2 in Table 2), only the need index and the per capita number of bed-days purchased for mentally disordered offenders are retained in the model, which explains 24% of the variance. However, the effect of these bed-days in the model is simply to explain part of the high level of expenditure in London. This can be demonstrated by reintroducing the dummy variable for inner London into the model. This causes beddays for mentally disordered offenders to be excluded, as having no independent explanatory power for health authorities outside London, and the resulting model is the same as model 1 (Table 2).
Regional variations in the ratio of expenditure to allocation
Figure 3 illustrates the
geographical variation in the ratio of expenditure to allocation. It suggests
that although there is some variability in the ratio, even between
neighbouring health authorities, there is also a degree of regional
clustering. This is confirmed by the regional average
(Table 1), showing an average
underspend in Northern, Trent, West Midlands and North West regions, and
corresponding overspends in the remaining regions.
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DISCUSSION |
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Underspending in areas of greater need
The results of this study show that at the level of health authorities, the
relation of expenditure on mental health to the psychiatric allocation varies,
but declines significantly as the level of socio-economic deprivation
increases, in areas outside inner London. Subject to the assumptions described
above, this does appear to suggest that expenditure is inequitable, and that
the effect of this inequity is to cause further disadvantage to areas with
high levels of socio-economic deprivation. This probably arises because the
York indices, which identify psychiatric and general medical needs separately,
were only introduced into the allocation process from 1995-1996 onwards. As a
consequence of the more redistributive nature of the new psychiatric index,
compared with the general index, the allocation based on it contains the
assumption that a greater proportion of the total resources for health care
should be spent on mental health in more deprived areas, a proportion which,
using the method described by Glover
(1999), doubles from 8 to 16%
from the least to the most deprived health authorities. However, this
assumption, which could not have been made prior to the introduction of the
York formula, has never been drawn to the attention of health authorities.
They may fail to spend resources in line with the York formula simply because
it has never been suggested that they should do so. Even if the implications
of the formula have become apparent, they might be reluctant to divert
resources to psychiatry from high-profile acute services (which may also be
under pressure to a degree not accounted for in the formula).
Mental health expenditure in London
The high level of expenditure on mental health in London has been noted
previously (Chisholm et al,
1997), and has been attributed to high levels of expenditure on
mentally disordered offenders (McCrone
et al, 1997) and to levels of need greater than those
accounted for in the York index (Ramsay
et al, 1997), although this has been debated
(Kisely, 1998). This study
suggests that the four inner-London health authorities spend more on mental
health than they are allocated on the basis of the York index, and that this
can only partially be explained by high per capita rates of mentally
disordered offender in-patients. Their excess expenditure is more striking
given that other inner-city areas tend to show a relative underspend. Though
this tends to support the view that these authorities are responding to levels
of need unrecognised in the allocation process, this study cannot exclude
other explanations of the high expenditure.
Policy implications
In 1997, Sheldon wrote: "formula fever has distracted attention from
the now more important issue of how the allocated resources are spent. Health
authorities... should focus their attention on whether current spending
patterns reinforce socially produced inequalities and, if so, doing something
about this at a local level". This preliminary attempt at an analysis of
the kind advocated by Sheldon suggests that the implications of the York
formula are not being translated into practice, and that current mental health
spending is failing to rectify past inequities.
The first step towards addressing this would be to make explicit to each health authority the implications of the allocation formula for the resourcing of particular clinical areas (Glover, 1999). Where there are substantial shortfalls of mental health expenditure in relation to allocation, local health authorities should be called upon to justify them, particularly where we have found this to be a systematic effect: in deprived areas outside London. This might prompt a gradual shift in expenditure, to approach the allocation more closely over time. However, it may become apparent that there are good local justifications for current spending patterns, and if so, those would need to be considered in any future re-examination of the allocation formula.
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Clinical Implications and Limitations |
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LIMITATIONS
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ACKNOWLEDGMENTS |
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REFERENCES |
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Received for publication September 20, 1999. Revision received March 17, 2000. Accepted for publication March 17, 2000.