An introduction to personal health budgets

The guiding principle of personal health budgets is that budget holders make a positive choice to buy in services tailored to their needs within a set budget. They use funds that would otherwise have been spent by the state or insurer (or both) for less personalised and often more traditional care.

The benefits of personal budgets

Personal budgets for health and social care have been introduced in several developed nations in North America, Australasia, Scandinavia and much of Western Europe. A personal budget is an amount of money that is spent on meeting the healthcare and wellbeing needs of people, generally those with a long-term illness or disability. As they are held by the service user or their carer, they are thought to provide greater flexibility, choice and control for service users.

Governments see personal budgets as a way to curb or even drive down the escalating costs of health and social care, while at the same time boosting quality and innovation. These issues have been brought into sharp focus in England as the government attempts to rein in public spending.

Personal budgets in England

Personal budgets have been a feature of adult social care in England since 1996. An Audit Commission report published in 2010 shows that take-up has been poor – as low as 6% of those eligible in some parts of the country.

Even so, the government is keen to press ahead with plans for personal health budgets, not least because the concept fits well with its intention to build the ‘big society’, by shifting responsibility for care from state to citizen. In November 2010 the government announced plans to extend the scheme, with £400m of funding made available through the NHS for carers’ breaks. The expectation is that local government will provide personal budgets for social care to one million eligible people by 2013.

2009 saw the launch of 70 pilot personal health budget schemes across England. They are now being evaluated and the findings are due to be published in 2012. The system in England allows for direct payments to the budget holder, or to a service that will manage the funds on their behalf but where the users have choice and control as to how the money is spent. Budget holders can purchase care from the public, private or voluntary sectors.

Learning from overseas

Given that personal budget holding is still at a relatively early stage in England, what might we learn from countries that are already some way down the track?

The Dutch experience of personal health budgets can tell us a great deal. Not only is the Netherlands dealing with similar financial and demographic pressures to those of the UK, but its scheme focuses on people of all ages with long-term conditions and disabilities. These are the very groups the UK government hopes will increasingly choose personal health budgets.