Health spending and outcomes for the new English primary care trusts

The link between healthcare spending and health outcomes for the new English primary care trusts was written by Stephen Martin, Nigel Rice and Peter C. Smith of York University. The report is timely as there are increasing concerns about how the bleak economic outlook will impact on spending in the NHS. It is therefore a good time to consider the extent to which healthcare expenditure yields patient benefits.

Since 2003 data on healthcare expenditure across 23 programmes of care have been prepared by each primary care trust (PCT) in the English NHS. These programme budgeting data seek to allocate exhaustively to disease categories all items of NHS expenditure.  Previous macro-economic studies of the link between spending and outcomes have been inconclusive. This report describes a model which takes into account population need in a way that has not previously been undertaken. 

The authors note that their work has a number of limitations including the use of a rather narrow outcome indicator (mortality) and the need to assume a relatively stable pattern of spending by PCTs across programmes over the recent past. Notwithstanding these limitations, the study offers clear confirmation that current expenditure by PCTs on some important programmes of care is highly cost-effective and illustrates how programme budgeting data can be used to generate information which might usefully inform PCTs' spending decisions.

These results offer policy-makers and the NHS the opportunity to make more informed decisions about whether healthcare expenditure offers value for money and as such provide a basis for setting national and local policy.