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Priority setting

A series of publications that aims to help organisations review their current priority-setting processes and, if needed, provide a reference document for PCTs who still have to develop a comprehensive priority-setting framework.
Priority setting: an overview
Date: 2/10/2007 This is the first in a series of publications which aims to help organisations review their current priority setting processes and, if needed, provide a reference document for PCTs who still have to develop a comprehensive priority setting framework. more

Priority setting: managing new treatments


Date: 15/2/2008 The second report in a series of publications that aims to help organisations review their current priority-setting processes and, if needed, provide a reference document for PCTs who still have to develop a comprehensive priority-setting framework. more

Priority setting: managing individual funding requests


Date: 17/3/2008 This report is the third in a series of publications aiming to help organisations review current priority-setting processes and, if needed, provide a reference document for PCTs who still have to develop a comprehensive priority-setting framework. more

Priority setting: legal considerations


Date: 20/3/2008 The fourth in a series of publications that aims to help organisations review their current priority-setting processes and, if needed, provide a reference document for PCTs who still have to develop a comprehensive priority-setting framework. more

Priority setting: strategic planning


Date: 17/4/2008 This is the fifth in a series of publications that aims to help organisations review their current priority setting processes and, if needed, provide a reference document for developing a comprehensive priority setting framework. Report more

Priority setting: an overview

Supported by:

The voice of NHS leadership


The NHS Confederation is the independent membership body for the full range of organisations that make up the modern NHS. We help our members improve patient care and public health, by: influencing policy, implementation and the public debate supporting leaders through networking, sharing information and learning promoting excellence in employment.

The Primary Care Trust Network is part of the NHS Confederation. For further details of the Primary Care Trust Network, please visit www.nhsconfed.org/pctnetwork or contact David Stout on 020 7074 3322 or at david.stout@nhsconfed.org

The NHS Confederation 29 Bressenden Place London SW1E 5DD Tel 020 7074 3200 Fax 0870 487 1555 Email enquiries@nhsconfed.org www.nhsconfed.org

Registered Charity no. 1090329 Published by the NHS Confederation The NHS Confederation 2007 This document may not be reproduced in whole or in part without permission. ISBN 978-1-85947-143-2 BOK 58401

Contents
Introduction Why is priority setting so important? How to build up a priority setting framework Agreeing the key principles Conclusion The author Acknowledgments Glossary 2 3 5 8 12 13 14 15

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Priority setting: an overview

Introduction
The Department of Health has begun a push to create world-class commissioning and is developing a range of tools, approaches, outcome measures and competences to support this. This initiative is the most serious attempt to reposition commissioning as central to the way the NHS operates since the introduction of the purchaser provider split in 1990. The NHS Confederation welcomes this initiative and the Primary Care Trust Network is fully engaged in influencing policy in this area. One of the key skills that any commissioner will need is the ability to identify priorities. It is still the case that a large amount of the resources committed reflect historic patterns of provision, the particular approach of local providers or even individual clinicians. To change this there will be a need for high-quality, evidence-based and systematic decision making to support the development of the commissioning plan and to feed into the annual contracting round. In addition, the number of high-cost treatments and increasingly vocal interest groups makes the task of allocating resources one of the most politically sensitive and complex issues facing any part of the NHS. The purpose of this report, and the series of Briefings that follows it, is to support the development of decision making in this difficult area. Although it is aimed primarily at those directly involved in resource allocation, the series should also be helpful to a wider audience including providers and policy makers. The series has been written by practitioners in the field and so are based on experience in this evolving field. The evidence base is still in an early stage of development, so this should still be regarded as work in progress and primary care trusts will need to develop their own approach to this area. Improving the quality and transparency of decision making, involving the public, patients, providers and other stakeholders, and building the capacity of commissioners to take and then implement these decisions will be an important task over the next few years as we work towards a more world-class vision of commissioning.

Priority setting: an overview

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Why is priority setting so important?


Need and demand for healthcare always exceeds the funding that is available to the NHS. This requires PCTs to prioritise needs into those that will be met and those that will not. The challenge lies in arriving at fair decisions which properly balance competing needs. Being aware of the consequences, or the opportunity costs, of different funding options is crucial to this process. What is funded and what is not funded are different sides of the same coin and cannot be separated.

Characteristics of robust priority setting


There are some characteristics which can be observed in commissioning organisations which have good priority setting processes. Organisations that demonstrate these characteristics are, in the experience of the author, better placed to cope with many of the challenges and threats to fair priority setting. The characteristics are outlined below. 1. A sound grasp of priority setting Organisations which have a coherent understanding of priority setting, including knowledge of the law, reduce uncertainty and risk and are more robust to challenge. 2. Organisational cohesion Cohesion results when there is a shared understanding of how priority setting will be done in the PCT and when all individuals and groups within the PCT act in accordance with that understanding. This leads to a high degree of consistency in decision making. 3. Consistent behaviour A good way to influence clinicians and trusts is for the organisation to be predictable in its responses. This is particularly the case in relation to the management of individual funding requests. Organisations which have adopted consistent messaging and behaviours frequently report a fall in the number of requests.

Rationale for achieving robust and fair resource allocation


it improves the overall health and wellbeing of the population it aligns investment to pre-agreed strategies, priorities and policies it is more ethical because it gives competing needs a fair hearing it is a requirement of good corporate governance it increases public and patient confidence it adds legitimacy to decision making it helps achieve financial balance it provides better value for money it reduces the risk of successful legal challenge it is operationally more efficient.

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Priority setting: an overview

The importance of consistency in priority setting


The need for consistency is one of the cornerstones of good practice. Consistency in word PCTs need to communicate consistent messages both internally and externally. To do this individuals and committees within the PCT should be familiar with their organisations priority setting framework and adopt a common language in relation to priority setting. Consistency in action PCTs need to respond to the same situation in the same way every time. Becoming predictable to those outside the PCT is desirable and is achieved by the PCT doing what it says it is going to do. To deliver consistency in action, procedures need to be put in place and strictly adhered to. Procedures for dealing with emergencies or unusual circumstances can be agreed in advance so they need not be managed on the hoof. Consistency in decision making PCTs need to apply the principles they have adopted and refer to the factors they have decided to take into consideration to all priority setting undertaken by the PCT.

4. The adoption of protocol-driven decision making PCTs, like clinicians, come across the same scenarios time and again. Good commissioning practice, like good clinical practice, is policy and protocol-based. Organisations which adopt this approach have better documentation which leaves a more thorough audit trial. This all adds to consistent, efficient and timely decision making. Despite concerns that might exist to the contrary, protocol-based decision making does allow organisations to respond to unique and unusual individual need.

Despite concerns to the contrary, protocol-based decision making allows organisations to respond to unique individual need.

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How to build up a priority setting framework


Figure 1 illustrates how, by taking a number of clearly defined steps, a PCT can build up a priority setting framework by ensuring each of the key elements is given careful consideration. Each step is described on the following pages.

Figure 1: Steps in developing a priority setting framework

Step 1 Agree key principles to underpin priority setting, and the factors which will be taken into consideration, and draw up a list of good practices required by the law

Step 2 Develop and establish priority setting structures and processes

Develop a dedicated strategic plan to develop priority setting Consider manpower resources

Step 3 Consider how to approach a range of issues related to key relationships with stakeholders

Step 4 Produce key policy documents Step 5 Develop tools to aid decision making

Decision making

Decisions

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Priority setting: an overview

Step 1: Agree key principles to underpin priority setting


The first step is to consider the key principles (values, rules and assumptions for example, equity) and key factors (determinants, parameters and considerations for example, clinical effectiveness) that the PCT will take into account when making decisions. Another task is to understand and set out good practice. Step 1 is heavily influenced by the law.

Step 3: Consider how to approach a range of issues related to key relationships with stakeholders
The third step is to consider a group of issues which can loosely be put under the umbrella of relationships. These include: patient and public engagement communications with patients and carers working with clinicians, providers and other PCTs, and the role of the NHS Contract responding to queries from politicians, the Department of Health and the media training and support for decision makers

Step 2: Develop and establish priority setting structures and processes


The second step is to map out how the PCT will deliver decision making. This requires consideration of operational issues: the policies that are needed to support decision making, the structures and processes to be put in place and how decisions are to be documented. This is a detailed task. Things that might be covered include: which decisions individuals can make and which decisions groups should make the constitution of decision-making bodies the role of bodies such as overview and scrutiny committees, clinical networks and patient groups, and the status of their recommendations the role and responsibilities of provider trusts in relation to prioritisation and resource allocation setting out dates for key milestones of the annual commissioning round.

internal and external audit.

Step 4: Produce key policy documents


It is crucial that each PCT sets out in a single document how it will approach resource allocation. For the purpose of this series this will be called the overarching policy document on priority setting. This should include the principles that the PCT has adopted, the factors which will be taken into account when making a decision, the structures which will support decision making and a scheme of delegation that sets out which decisions specific groups and individuals can make. The overarching policy document should also set out the roles, responsibilities and status of the recommendations of networks, professional bodies, the National Institute of Health and Clinical Excellence (NICE) and the overview and scrutiny committee (OSC). It also needs to cover the full range of decision making related to priority setting,

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including how the annual commissioning round will be handled. The author is aware of at least one PCT which had its overarching policy document approved by both the local OSC and all the local Members of Parliament. There are a number of recurring issues to be usefully addressed as part of this step, through a series of policy statements. These statements can either be part of the overarching policy document or be addressed in a series of supplementary commissioning policies. Recommended policy statements include setting out the PCTs approach to: treatments under consideration in NICEs health technology programme requests seeking funding for patients coming off drug trials, and drug company sponsored funding requests from patients who have run out of private funds for private healthcare treatments not normally funded by the PCT patients seeking treatment abroad co-payment which refers to private practice within the NHS experimental treatments funding research and development.

how to efficiently gather and process large quantities of information how to systematically assess and compare very different types of services how to ensure that all individuals contributing to the decision making have sufficient knowledge about all the services and treatments under consideration how to spread the information gathering and assessment across the whole year how to adopt wider involvement that is sustainable how to fairly and effectively disinvest and redistribute resources. These are some of the most challenging issues PCTs currently face and as such are in need of urgent development.

A final consideration
Establishing and maintaining good priority setting requires an ongoing cycle of development, review and quality improvement. It should not be a oneoff exercise. PCTs are encouraged to develop dedicated strategic and implementation plans for the development of resource allocation and assess the manpower and other resource requirements to run both operational and developmental aspects of priority setting. The rest of this report will focus on aspects of Step 1.

Step 5: Develop tools to aid decision making


The fifth step involves the actual decision making itself and relates mainly to strategy development and the annual commissioning round. The aim is to develop practical strategies and adopt tools to aid those making the decision. In particular, decision making in the annual commissioning round presents some major difficulties. These include:

Establishing and maintaining good priority setting requires an ongoing cycle of development. It should not be a one-off exercise.

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Priority setting: an overview

Agreeing the key principles


Taking a whole-system approach
The current focus of priority setting is in relation to new treatments, particularly drugs, and individual funding requests. A whole-system approach is, however, needed. So, to begin with, the priority setting framework has to be relevant and applicable to all areas of activity which involve prioritisation. These are: developing healthcare strategies and timetabled implementation plans deciding how the budget will be allocated, including the redistribution of resources managing in-year service pressures and problems, including demand management dealing with individual funding requests. The framework also needs to incorporate both investment and disinvestment. service developments. Whether the drug is funded depends on the priority it is given and how much money is available to the PCT either through new money or disinvestment. This type of decision making is referred to as prioritisation. These two approaches are profoundly different; they ask different questions and require different factors to be taken into account. There are good grounds to argue that the second approach is the method that should be adopted by public authorities, because: it allows all needs to be given a fair hearing it discourages queue jumping and is better able to resist pressure from special interest lobby groups and pharmaceutical companies it requires the decision maker to look at the whole of healthcare and not just an isolated healthcare intervention it forces the decision maker to consider the consequences of their decisions, because it demands that the opportunity costs are considered. Singular decision making is commonly applied to decision making around drugs and new technologies. Indeed, it is probably the case that clinicians, patients and the public expect decisions to be taken this way. But at the same time, funding issues related to such things as investments in specialist nurses or whole new services are generally referred to the annual commissioning round. This is the case even when they represent better health gain than any of the new drugs or technologies under consideration. This creates an ethical dilemma as it means that the system is allowing a subset of funding decisions to be taken on a completely different basis and one which is seen to sanction a disregard for opportunity cost.

The primacy of prioritisation


One of the first and most fundamental issues to consider is how important is the process of prioritisation to achieve fair resource allocation. The obvious answer is that it is essential. But prioritisation is frequently bypassed in the NHS. Currently, two very different approaches to decision making are used in the NHS. Take, for example, a newly licensed drug. The decision maker can either: focus only on the drug, assess it and make a decision to fund, partially fund or not fund. This type of decision making is referred to as singular decision making; or assess the drug against certain criteria and prioritise its importance by comparing it with existing services and other potential competing

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If organisations strive to distribute resources fairly and if they are of the view that consideration of opportunity cost is essential to that process, then they must construct their decision making in ways that reflect this. It is suggested, therefore, that the primacy of prioritisation be a fundamental principle of public sector resource allocation. Currently this translates into the primacy of the annual commissioning round although as other vehicles for priority setting emerge this might change. This principle has major implications for the management of individual funding requests (as opposed to dealing with unique individual circumstance) and the management of in-year service pressures as we will see in a later Briefing in this series. It also requires considerable organisational commitment to implement because of the external pressures to fund treatments to which all PCTs are subject to on a daily basis. But to fund requests for new treatments without regard to prioritisation seriously undermines both the PCT and fairness.

Openness and accountability


In considering what is required of the PCT by way of openness and accountability, the NHS Act and national policy in relation to patient and public involvement will need to be taken into account. Within this there are absolute requirements which PCTs are bound by law to implement. There are also more discretionary and developmental elements such as involving more stakeholders in the priority setting itself.

Dos and donts


A detailed knowledge of the law can enable an organisation to draw up a dos and donts list for priority setting. Judicial review, in particular, is interested in reasonableness and procedural fairness and not necessarily the outcome of the decision. Some aspects of good practice will be given in this series of publications but they cannot be comprehensive.

Understanding the legal framework within which PCTs operate


PCTs must understand the law within which they have to operate. The relevant acts are the National Health Service Act and the Human Rights Act. In addition, the PCT should be familiar with the relevant case law arising from judicial review. While the law is commonly perceived to be absolute, it is very much a mixture of reasonable PCT discretion and judicial instincts about fairness and justice. The law is a complex and evolving area and PCTs should strive to understand their basic rights and duties to patients.

Agree a list of considerations which will be taken into account when making decisions
As well as key underpinning principles which might be set out in a PCTs mission statement and the primacy principle, the PCT will also need to generate a list of considerations which it will take into account when making a decision. There are no right or wrong answers but it has already been seen that this list is likely to be made up of a combination of principles and factors. This is a difficult task and some points of caution are needed.

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Priority setting: an overview

Firstly, the PCT should resist any attempt to simply import this list from examples of good practice elsewhere. To become embedded in local commissioning culture it is vital that the principles and factors are owned by all members of the PCT and by wider stakeholders (especially patients and the public) in the local community. It is worth spending time and effort working with stakeholders to determine the values that they feel should underpin prioritisation and resource allocation given that resources are finite and difficult choices have to be made. Secondly, the list has to apply in all settings; therefore, the PCT needs to take into account the full range of funding issues that it regularly faces. The risks of developing frameworks only in the context of individual funding requests is that these frameworks commonly omit key considerations such as clinical and service risks and quality issues (some of which might not represent any health gain at all). The role of risk assessment in decision making is probably more important than is commonly recognised. An example of a service risk which many commissioners will recognise is the need to invest in additional staff in a critical shortage specialty where a lack of investment would lead to a loss of staff, the result of which might lead to the population having no local service at all. Finally, focusing only on individual funding requests risks developing a framework that does not retain a population perspective, thereby creating the ethical dilemma, once again, of having the organisation allocate resources using different criteria in different settings. For example, the case for funding individual patients is frequently presented in terms of medical ethics and the principle of the duty of care to individuals. However, it is questionable whether the principles

of patient autonomy (the right of patients to make decisions about their medical care), beneficence (provide benefit and not withhold benefit) and non-maleficence (do no harm) are appropriate in this situation. This is because the principles focus the decision on the patients ability to benefit and give precedence to the values of the individual patient. Although these are relevant considerations, they cannot solely determine the outcome because the interests of other patients should also be considered. A list of factors which frequently appear in PCT documents are listed in Figure 2, not necessarily in order of importance.

Figure 2. Common factors which PCTs take into account when allocating resources
nature of the health gain confidence in the clinical evidence number of individuals benefiting cost effectiveness need to redress inequalities and inequities of access accessibility national priorities stated local priorities clinical risk service risk absolute cost of the development legislation and directives patient choice.

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The list the PCT finally arrives at and the weightings which may be given to each item is a key output of Step 1. An example is shown in Figure 3.

Figure 3. An example of stated principles underpinning resource allocation


We will prioritise options for funding against the following framework: 1. Health outcome we will prioritise interventions that produce the greatest benefit for our population. 2. Clinical effectiveness we will prioritise interventions with sound evidence of effectiveness. 3. Cost effectiveness we will prioritise interventions which yield the greatest benefit relative to cost of provision. 4. Equity we will prioritise on the basis of clinical need, not on the basis of age, gender, ethnicity or lifestyle. 5. Inequalities we will prioritise to ensure full access to existing pathways for the majority over funding for new or experimental technologies for the minority. 6. Access we will prioritise delivery of care as close to the patient as possible, where this meets governance standards. 7. Patient choice will be considered whenever possible. Patients will be given informed access to appropriate options. We will not, however, fund treatment for one patient that could not be offered to all patients with equal clinical need. 8. Disinvestment we will review existing services to ensure diversion of resources from less effective to more effective services wherever possible. 9. Quality we will aim to commission and monitor services against agreed quality standards. 10. Affordability we recognise that not all interventions with evidence of clinical and cost effectiveness will be affordable from fixed budgets. Further prioritisation may be necessary in line with national and local strategies and health needs assessment. In addition, the PCT has adopted the primacy principle, expressed as follows: The local delivery plan (LDP) is the mechanism through which investment and disinvestment decisions are taken. Interventions recommended in NICE technology appraisals will be implemented only on publication of guidance unless previously prioritised through the LDP round. We do not expect to introduce any healthcare intervention in-year outside this process since to do so will take resources from identified priorities. Adapted from Warwickshire Primary Care Trust, Commissioning principles, January 2007

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Priority setting: an overview

Conclusion
Resource allocation and priority setting is a vital function, the responsibility for which rests with PCTs. Much progress has been made over the years and more can be anticipated. There is, more than ever, a need for PCTs to ensure that they carry out this task to the best of their ability and work in a systematic way towards ongoing improvement. The challenges facing the NHS in relation to scarcity of resource are best met with PCTs working collaboratively, both between themselves and with their own local community.

Key action points


When developing a priority setting framework be systematic, work through all elements and consider all equally important. Develop a framework which will be applied to all priority setting in the PCT. Make priority setting a major workstream of the PCT in its own right. Secure sufficient resources within the PCT to undertake both routine and developmental aspects of resource allocation. Draw up a set of good practice guidelines in relation to decision making or ask your lawyers to do it for you. Give very careful consideration to the primary principle and its implications. If adopted then commit to it. Agree the important principles and factors which will inform decision making. Produce a document that describes how resource allocation will be undertaken by the PCT and, if possible, get this approved by the overview and scrutiny committee and local MPs. Assess the PCTs knowledge and understanding of the law. Adopt the policy that legal training should be mandatory for certain posts and arrange training days as required. Contract with your lawyers to provide legal updates and make recommendations if changes to policies and processes are needed. Although legal advice is expensive, agree who can access legal advice, under what circumstances and the timing of access. The aim should be to prevent serious problems arising and therefore advice should always be sought sooner rather than later.

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The author
Dr Daphne Austin BSc MBChB FFPHM Dr Daphne Austin is a consultant in public health medicine, currently working for the West Midlands Specialised Commissioning Team. Dr Austin has an extensive background in public health, spanning 17 years. Dr Austin established the UK Commissioning Public Health Network, which she currently chairs.

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Priority setting: an overview

Acknowledgments
This series has emerged from an ESRC funded series on managing scarcity in healthcare, run by Professor Cam Donaldson. It has been funded by a grant from the NHS Institute for Innovation and Improvement. The author and the NHS Confederation would like to thank the following people for their input and involvement with this series of publications: Professor Cam Donaldson and the UK Forum for Priority Setting in Healthcare Professor Chris Newdick Claire Cheong-Leen Dr Henrietta Ewart

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Glossary
Resource allocation the task of deciding how healthcare resources are to be allocated. This usually refers to financial resources but can also refer to the deployment of manpower. Priority setting / prioritisation the task of determining the priority to be assigned to a service, a service development or an individual patient at a given point in time. Prioritisation is needed because claims (whether needs or demands) on healthcare resources are greater than the resources available. Service development a catch-all phrase referring to anything that needs investment. It refers to all new developments including: new services; new treatments, including drugs; changes to treatment protocols which have cost implications; and changes to treatment thresholds and quality improvements, such as reduced waiting times. It also refers to other types of investments which existing services might need, such as pump-priming to establish new models of care, training to meet anticipated manpower shortages and implementing legal reforms. Service disinvestment the mirror image of service development. Priority setting processes all the things needed to support priority setting, such as structures, policies, protocols and processes. Rationing a consequence of priority setting. A patient can experience rationing in many ways, including being denied access to a treatment or service, experiencing a delay or poor quality services which impact on the clinical outcome. It is advisable not to use the term rationing as a verb; to do so is to imply that rationing is an optional activity. All positive decisions to fund are inextricably linked with a rationing consequence somewhere in the system. Affordability the ability to do something without incurring financial risk or unacceptable opportunity cost. It is ultimately determined by the fixed budget of the PCT. Opportunity cost arises from alternative opportunities that are foregone in making one choice over another. Annual commissioning round the process by which new money coming into the NHS is allocated. The process has undergone many changes over the years but key elements of the process have remained unchanged. Funding decisions follow an annual cycle. Service developments are gathered and assessed during the autumn. Once PCTs are confident of the size of additional funding (usually known in December) priority setting intensifies. Final decisions have to be before the end of the year to ensure that new contracts can be placed with providers of healthcare for the new financial year which starts on 1 April. This annual process sits within a longer term strategic planning process. For the purposes of this series of publications this process will be known as the annual commissioning round.

Priority setting: an overview


This report is the first in a series of publications which aims to help organisations review their current priority setting processes and, if needed, provide a reference document for PCTs who still have to develop a comprehensive priority setting framework. It is hoped that the series will also promote understanding and debate amongst a wider audience, particularly providers of healthcare who have always undertaken prioritisation, at both patient and service level, albeit less explicitly.

Further copies can be obtained from: NHS Confederation Publications Tel 0870 444 5841 Fax 0870 444 5842 Email publications@nhsconfed.org or visit www.nhsconfed.org/publications
NHS Confederation 2007 This document may not be reproduced in whole or in part without permission

The NHS Confederation 29 Bressenden Place London SW1E 5DD Tel 020 7074 3200 Fax 0870 487 1555 Email enquiries@nhsconfed.org www.nhsconfed.org
Registered Charity no: 1090329

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ISBN 978-1-85947-143-2 BOK 58401

Priority setting: legal considerations

Supported by:

The voice of NHS leadership


The NHS Confederation is the independent membership body for the full range of organisations that make up the modern NHS. We help our members improve patient care and public health, by: influencing policy, implementation and the public debate supporting leaders through networking, sharing information and learning promoting excellence in employment. The Primary Care Trust Network is part of the NHS Confederation. For further details of the Primary Care Trust Network, please visit www.nhsconfed.org/pctnetwork or contact David Stout on 020 7074 3322 or at david.stout@nhsconfed.org

The NHS Confederation 29 Bressenden Place London SW1E 5DD Tel 020 7074 3200 Fax 0870 487 1555 Email enquiries@nhsconfed.org www.nhsconfed.org

Registered Charity no. 1090329 Published by the NHS Confederation The NHS Confederation 2008 This document may not be reproduced in whole or in part without permission. ISBN 978-1-85947-150-0 BOK 59601

Contents
Introduction What is judicial review? Duties of the Secretary of State Duties of PCTs The National Institute for Health and Clinical Excellence Prescribing rights under the GMS Regulations European law Human rights law Judicial review proceedings Conclusion and key action points The author Acknowledgments References Further reading 2 3 4 5 8 9 10 11 12 14 15 15 16 17

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Priority setting: legal considerations

Introduction
Judicial review continues to grow in significance, with public authorities of all types now regulating themselves so as to comply with it. Twenty years ago, the courts often deferred to the expertise of public authority decision makers but today things are different. Public authorities may have to account for their actions at judicial review and can be required to revisit their decisions. In the NHS, this is important in deciding which services the NHS can afford to commission and also with respect to individual funding requests. Reasonable priority setting should be central to primary care trust (PCT) corporate governance. Key individuals within PCTs should have some knowledge of judicial review to act as advisors, as well as maintaining good relationships with solicitors who specialise in this field. This is a complex and developing area of law and this report is not a comprehensive guide; PCTs must always refer specific issues to their own legal team. This report will consider the following: what is judicial review the duties of the Secretary of State for Health and PCTs the role of the National Institute for Health and Clinical Excellence prescribing rights in primary care European Union law and human rights law. It also covers judicial review proceedings and provides some tips on working with lawyers.

Is litigation always a bad thing?


Litigation is not pleasant. It can cause anxiety, stir up hostility, add to the pressures of work and it is expensive. But this is not necessarily a good reason to avoid it at any cost. If every PCT conceded every claim for fear of litigation, reasonable priority setting would be impossible. Those patients who did not litigate would always be last on the waiting list. The benefit of litigation is that it can resolve unsettled issues so that reliable, legal arrangements become accepted practice and regulate practice in future. This is preferable for everyone. PCTs might consider entering a cost-sharing agreement so that cases in which there are significant legal doubts can be tested without causing disproportionate costs to one PCT alone.

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What is judicial review?


Judicial review is a mechanism for scrutinising the lawfulness of public authority decision making. It gives the courts power to examine whether a public authority has exercised its powers lawfully and reasonably within the parameters of the statutory authority conferred on it. Judicial review does not normally involve claims for damages. The two most likely reasons for legal action against PCTs are: major changes to services refusal to fund treatments for individual patients. A successful challenge in judicial review does not normally secure the claimant access to the treatment in question. Instead, the original PCT decision is nullified and referred back to the trust to be taken again in the light of the courts observations. In such a case, although it is still possible for the PCT to reaffirm its original decision, many concede the claim. Of course, rational and responsible priority setting will be undermined if PCTs concede every challenge and fund low-priority treatments. 1. Illegality A claim that a decision is illegal contends that the PCT has acted outside its statutory powers. This can be difficult to determine because words in statutes are sometimes ambiguous. In these cases, the words may confer discretion on the public authority as to how they should be interpreted. An example of an illegal action would be for a PCT to ignore a direction from the Secretary of State to fund a treatment (see the section on NICE, page 8). The principle of illegality also now includes the Human Rights Act 1998 (see page 10.) 2. Irrationality A claim that a decision is irrational contends that the decision maker has considered irrelevant factors, excluded relevant ones or given unreasonable weight to particular factors. Irrationality is considered on page 5 in the discussion of R v NW Lancashire HA. The courts respect the discretion of decision makers to reach their own conclusions, provided they are reasonable. The court does not look for a correct solution, or one with which the court agrees. But it must be within a range of reasonable solutions. Recently, the courts have become more intense in their scrutiny of PCT decisions. Whereas until the mid-1990s they tended to accept without question the rationality of health authority decision making, today judicial review is more rigorous. This means that a PCT must demonstrate that it has properly considered all the relevant factors and come to a reasonable conclusion. This usually means granting access to PCT documents and minutes of meetings.

What are the grounds for judicial review?


There are three grounds for judicial review, namely that the decision taken was one or more of the following: illegal irrational procedurally improper.

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Priority setting: legal considerations

3. Procedural impropriety A claim that a decision is procedurally defective may contend that the PCT has misunderstood a statutory procedural duty. Examples would be a failure under section 11 of the Health and Social Care Act 2001 to consult patients and the public about service changes, or coming to a firm conclusion before consultation is complete. But procedural impropriety may also apply to decisions relating to the PCTs individual funding request panels. If a decision of the panel will affect someones interests, that individual is entitled to know what factors are being considered, have the opportunity to make representations in writing and be reassured that the panel is independent.

Procedural impropriety also concerns whether PCTs have followed their own policies and procedures reasonably and consistently.

If a decision will affect someone's interests, that individual is entitled to know what factors are being considered.

Duties of the Secretary of State


The organisation of the NHS is governed by the National Health Service Act 2006. Section 1 of the Act requires that the Secretary of State for Health: Must continue the promotion in England of a comprehensive health service designed to secure improvement (a) in the physical and mental health of the people of England, and (b) in the prevention, diagnosis and treatment of illness. This is not an absolute duty to provide NHS treatment. Considering the nature of this duty, the Court of Appeal said in R v North and East Devon Health Authority ex p Coughlan (1999)1: When exercising his judgment [the Secretary of State] has to bear in mind the comprehensive service which he is under a duty to promote... However, as long as he pays due regard to that duty, the fact that the service will not be comprehensive does not mean that he is necessarily contravening [the Act] a comprehensive health service may never, for human, financial and other resource reasons, be achievable

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Duties of PCTs
Healthcare resource allocation is not performed by the Secretary of State personally. This task, and the duty that goes with it, has been delegated to PCTs.2 This is why judicial review litigation is normally conducted against PCTs, rather than the Secretary of State. In addition to PCTs duty to promote a comprehensive health service, Section 229 of the NHS Act 2006 states: Each primary care trust must, in respect of each financial year, perform its functions so as to secure that its expenditure does not exceed [its income]. Sections 6668 of the Act also give the Secretary of State power to remove from office those who fail in this duty. Board members, therefore, are under pressure to comply with ministerial instructions and not to exceed the budget that has been allocated to the PCT. So, within their finite allocations, PCTs must decide how best to promote a comprehensive healthcare service. The reality is that need and demand for healthcare exceeds the resources available to the NHS. As a result, hard choices have to be made between the competing claims of different patients. The law requires PCTs to exercise reasonable discretion in deciding how this is best done. What is reasonable discretion? A helpful starting point is the case of R v North West Lancashire Health Authority ex p A, D & G (2000)3, in which a refusal to fund transsexual surgery was overturned by the Court of Appeal. The court discussed some of the factors relevant to reasonable discretion. 1. Differences between PCTs The court confirmed that: The precise allocation and weighting of priorities is clearly a matter of judgment [for] each authority Authorities might reasonably differ as to precisely where [a treatment] should be placed and as to the criteria for determining the appropriateness and need for treatment. Therefore, postcode variations between PCTs are not unlawful of themselves. Equally, though, in a national health service wide variations are unattractive. PCTs should be aware of differences between neighbouring trusts and be able to explain why they are valid. 2. Need for a priorities framework In relation to the priority-setting process, the court observed: It makes sense to have a policy for the purpose indeed, it might well be irrational not to have one Each PCT should ensure it has a consistent priorities framework to guide the allocation of its resources. Throughout this series of priority-setting reports this is referred to as the overarching policy document on resource allocation. This policy should explain the principles of decision making in a way that can be easily understood by a lay readership. Since the statutory duty belongs to the PCT, it cannot delegate this duty. It is, however, reasonable and useful for PCTs to collaborate in developing a framework intended to be consistent across a larger area.

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Priority setting: legal considerations

Making choices between competing claims is a difficult and sensitive task because someone is generally dissatisfied and may be hostile to the outcome. For example, the court said in connection with transsexual surgery: It makes sense that an authority would normally place treatment of transsexualism lower in its scale of priorities than, say, cancer or heart disease or kidney failure. However, if decisions like these are required, it is crucial that they can be justified against a framework that is transparent and treats patients equally, fairly and consistently. The framework helps to manage the introduction of new treatments, the annual commissioning round and decisions about individual funding requests. (See the other reports in this series, where examples are given.)

Figure 1 provides an example of collaboration between PCTs. Of course, the discretion permitted to PCTs means that they may differ about similar cases, but the framework of analysis will be consistent. Some PCTs have their own priorities committees, while others take advice from clinical networks. Neither are statutory bodies and they have no statutory functions of their own. Their role is to make robust recommendations to the PCT board. Provided they are authorised to take a broad overview of the local health economy and can assess the competing claims of its differing sectors, their recommendations should normally be respected. A PCT board is at liberty to reject the advice but if it does so too often without good reason, the committee will quickly cease to be useful. Priorities committees must provide a fair balance of managerial and clinical interests. If the process becomes too corporate and unable to weigh and balance the clinical merits of a case, it will be criticised for under-valuing, or ignoring, relevant aspects of the decision, and for being irrational. The need for proper balance between managers and clinicians should be dealt with in the committees standing orders. 3. Absence of robust evidence of effectiveness Many treatments do not have the benefit of evidence from randomised controlled trials, or are too new to have been fully evaluated. Also, it may be difficult to conduct robust trials because of small patient numbers or lack of sponsorship. However, this does not justify an outright ban on a treatment. A reasonable clinical case in favour of a treatment must be met by a reasonable case against if the PCT is deciding not to fund it. As the Court of Appeal said in the case of A, D & G above:

Figure 1. An example of PCT collaboration in developing a priorities framework


The Thames Valley PCTs have agreed a Thames Valley Ethical Framework.4 This provides a transparent template within which each PCT may assess, for example, the introduction of new treatments. The framework balances: evidence of clinical and cost effectiveness the cost of the treatment the individual need for care the needs of the community mandatory national standards (see Further reading).

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07

The mere fact that a body of medical opinion supports the procedure does not put the health authority under any legal obligation to provide the procedure However, where such a body of opinion exists, it is not open to a rational health authority simply to determine that the procedure has no proven clinical benefit while giving no indication of why it considers that is so. 4. Blanket bans The court was uncomfortable with blanket bans on treatment. Judicial review insists that the PCT must consider all the relevant circumstances, including the possibility that the patient has exceptional needs. In particular, it said: The more important the interests of the citizen that the decision affects, the greater will be the degree of consideration that is required of the decision maker. A decision that seriously affects the citizens health will require substantial consideration, and be subject to careful scrutiny by the court as to its rationality. Therefore, the policy framework must contain a procedure by which patients may say: I know my treatment is normally a low priority, but my circumstances are so exceptional that they deserve an exceptional response. This requires the existence of individual funding request panels capable of considering the clinical merits of such a claim. These panels are dealt with in more detail in the NHS Confederation publication in this series, Priority setting: managing individual funding requests. For example, in R (Otley) v Barking and Dagenham PCT 5, the patient had colorectal cancer and argued that she had exceptional capacity to benefit from Avastin. The PCT rejected her argument but the court held that the decision was irrational for not considering all the relevant evidence. The court

said that although the PCTs general policy was rational and sensible, its decision in this case was flawed because it had not properly considered a number of factors, including the fact that: Ms Otley was young by comparison with the cohort of patients suffering from this condition. Her reactions to other treatment, in particular to Irinotecan plus 5FU, had been adverse. Her specific clinical history suggested that her reaction to a combination of chemotherapy and Avastin had been of benefit to her. By comparison with other patients, she, unlike many of the subjects of the studies, had suffered no significant side-effects from a cocktail which included Avastin The matter was referred back to the PCT to be reconsidered. PCTs are not bound to support all exceptional cases. However, if they refuse to support the treatment, they should clearly show why. For example, the evidence of clinical effectiveness may be too uncertain. There may be pressure to conduct a clinical trial, yet the costs of the trial may be prohibitive. Or, even if a trial is conducted, its results may still be inconclusive. Or the treatment, even if it is effective, may be so expensive as to be unaffordable in any case (at least without reducing access to other patients). In these cases, it may be reasonable to refuse funding. The law is not yet clear as to the exact nature of exceptionality. Indeed, their very nature makes it impossible to anticipate every exceptional case. In particular, can personal circumstances ever be exceptional (for example, that the patient has young children and extending his or her life, even by months, is important)? Recent cases suggest that they may be. Further litigation will help clarify these issues.

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Priority setting: legal considerations

The National Institute for Health and Clinical Excellence (NICE)


So far, the discussion has focused on the decisionmaking powers of PCTs and the range of discretion available to them. However, there are a number of instances in which their discretion is more limited. The Secretary of State may impose his, or her, will on the NHS by means of Secretary of States Directions (Section 8, NHS Act 2006). A direction removes the right of a PCT to exercise its own discretion it mandates what will happen. Directions often have the appearance of a statute but they may also come in the form of executive letters and circulars, provided the words direct that a particular action is required. Directions are important for PCT priority setting as a result of NICEs Technology Appraisal Guidance (TAGs). Since 2000, these have had the status of Secretary of States Directions. The NICE Direction says: A PCT shall, unless directed otherwise by the Secretary of State apply such amounts of the sums paid to it as may be required to ensure that a health intervention that is recommended by [NICE] in a Technology Appraisal Guidance is, from a date not later than three months from the date of the Technology Appraisal Guidance, normally available (a) to be prescribed for a patient on a prescription form for the purposes of his NHS treatment, or (b) to be prescribed or administered to any patient for the purposes of his NHS treatment.6 Therefore, unless directed otherwise by the Secretary of State, PCTs shall commission a treatment recommended by a TAG, normally within three months of its publication. This mandate remains controversial. Some say that NICE does not take affordability into account and imposes considerable opportunity costs on PCTs, yet offers little guidance on which treatments should be reduced, or abandoned, to make way for new TAG recommendations. Whatever the merit of this concern, NICE TAGs have mandatory status in respect of PCT funding. It would be illegal (and give patients the right of action in judicial review) to fail comply with them. The word normally may cause confusion, but it should not be read to mean that PCTs with hard-pressed budgets cannot normally afford to commission new treatments. The word requires PCT planning to accommodate the cost of NICE TAGs. PCTs should only decide not to fund a NICE TAG recommendation in exceptional circumstances. NICE also publishes clinical guidelines and guidance on interventional procedures. These are not mandatory. Nevertheless, they represent the view of an authoritative NHS body. PCTs are not duty-bound to adhere to them, but they must be prepared to demonstrate that they have given them proper consideration and have good reasons for not following them. NICEs TAGs are binding on PCTs. But they remain guidance only with respect to clinicians. Even the best guidance has its limitations. So, as each TAG states, clinicians must decide whether a treatment subject to a TAG is suitable for their individual patients (or whether factors such as co-morbidity or incompatible drug regimens mean it is unsuitable).

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Prescribing rights under the General Medical Services Regulations


The second area where PCTs discretion is restricted concerns primary care and the General Medical Services (Contracts) Regulations 2004 (the GMS Regs).7 PCTs may exert a downward pressure on prescribing costs in primary care. This is done using indicative prescribing amounts assessed by PCTs as appropriate to each general practice. Thus Section 18 of the NHS and Community Care Act 1990 states: The members of a practice shall seek to secure that, except with the consent of the PCT or for good cause, the orders for drugs, medicines and listed appliances given by them in any financial year does not exceed the indicative amount notified for the practice Note, however, that this does not make it wrong to exceed the amount for good cause, for example, an unexpected influx of new patients, or the availability of new and effective medicines. Also, prescribers may be penalised if they prescribe excessively, for example, by prescribing drugs for their own financial advantage, or in unjustified doses8 (see also GMS Regs, Schedule 6, para 46). However, these downward pressures need to be balanced against a separate GMS duty of prescribers to respond to patient need. The Department of Health has described this duty as follows: Patients will continue to be guaranteed the drugs, investigations and treatments they need There will be no question of anyone being denied the drugs they need because the GP or primary care group have run out of cash. GPs participation in a primary care group will not affect their ability to fulfil their terms-of-service obligation always to prescribe and refer in the best interest of their patients.9 The reason for this statement may originate in the GMS duty that insists that prescribers shall provide necessary and appropriate care and prescribe the medicines and appliances which are needed for the treatment of their patients.10 These duties were considered in the Viagra case (R v Secretary of State, ex p Pfizer [1999]11), in which the Secretary of State wrote to GPs saying that they should not prescribe the drug except in specified circumstances. The letter was challenged in judicial review as being illegal. The court held the letter to be unlawful for contradicting the duties contained in the (similar) GMS regulations of 1992. It said that: The doctor must give such treatment as he, exercising the professional judgment to be expected from a GP, considers necessary and appropriate. This is not to say that prescribers should always prescribe the latest, most expensive medicines. For example, it is still reasonable to prescribe a generic medicine if it has equal therapeutic benefit. On the other hand, the GMS Regs insist that the prescriber shall prescribe what is needed and this does not seem to permit the PCT to make savings at the cost of patient care. So, if a proportion of patients will not respond well to a generic medicine, the PCT is duty-bound by the GMS Regs to see that an alternative is available to be prescribed. (This may be why a practice has good cause to exceed its indicative budget.)12 This right to prescribe is subject to the statutory restrictions contained in the black and grey lists, which, respectively, prohibit and restrict access to certain drugs within the NHS.13 Note, however, that PCTs cannot add a drug to these lists. Following the Viagra case, treatments for erectile dysfunction were added to the grey list and may not now be

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Priority setting: legal considerations

freely prescribed. However, this is a decision for Parliament, not PCTs. Put another way, if it is sensible to limit access to medicines under the GMS Regs, then it is for Parliament to do so by means of the lists. To this extent, supervising primary care prescribing is more difficult than controlling the costs of

treatments in secondary care. This suggests that PCTs should do so by agreement and negotiation, but not by issuing their own black lists that penalise prescribers for doing what the regulations require. Otherwise, PCTs could be at risk of judicial review in the same way as the Secretary of State in the Viagra case for contradicting the GMS Regs.

European law
The third area in which it is difficult for PCTs to exercise regulatory discretion over NHS costs is in connection with EU law. The basic principle of EU law is to promote the freedom of movement of goods, services, labour and capital between the member states of the EU. The question is whether public health services are included within the principle protecting the freedom of movement of services. The matter was first raised in respect of NHS care in 2006 in Watts v Bedfordshire PCT.14 At the age of 77, Mrs Watts required bilateral hip replacements. She was put on a hospital waiting list and assured of treatment within the usual waiting period, at that time, of one year. She declined to wait so long and arranged to have her care at a hospital in France. Although, shortly before she left, the PCT offered her treatment within four months, she declined the offer, had her surgery and returned with a bill of 4,700 for the PCT. It refused to pay and the matter was taken to the European Court of Justice (ECJ) to consider whether the provision of NHS care was a service subject to the rules on free movement. The ECJ ruled that it was such a service. However, it was not freely available in exactly the same sense as private banking, or insurance services. The right to obtain care elsewhere in the EU at NHS expense was available only if the treatment was normal in the sense that it had been sufficiently tried and tested by international medical science, and could not be provided without undue delay. Significantly, the existence of standard waiting times could not displace the right of a patient to treatment if he or she had urgent need. The ECJ said: Where the delay arising from such waiting lists appears to exceed in the individual case concerned

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an acceptable period having regard to an objective medical assessment of all the circumstances of the situation and the clinical needs of the person concerned, the competent institution may not refuse the authorisation sought on the grounds of the existence of those waiting lists, [or] an alleged distortion of the normal order of priorities linked to the relative urgency of the cases to be treated. The ECJs role is to advise domestic courts how to resolve the dispute, not to decide the merits of the case itself. So the matter was referred back to the Court of Appeal to be reconsidered in the light of this guidance. The PCT settled out of court before the need arose for further litigation.

Clearly, a widespread use of this freedom could destabilise patterns of resource allocation in the NHS. The problem is not so much in connection with undue delay because the new NHS 18-week waiting list target will probably satisfy most cases. But what if treatment is not provided within a PCT because it is considered low priority? If such treatment were normally available in (say) France and Germany, would it be normal treatment in EU law? Can patients simply obtain it in the EU and return with the bill? With respect, the European Court has not been conspicuous for its clarity in this area. This issue is now (in March 2008) before the European Commission for the purpose of a new directive on cross-border access to treatment within the EU.

Human rights law


Human rights law is more sympathetic to the difficult challenges of reasonable resource allocation. Under the Human Rights Act 1998, claims may be brought, for example, in respect of the right to life (Article 2), the right to freedom from degrading and inhuman treatment (Article 3), the right to private and family life (Article 8), and the right to found a family (Article 12) enshrined in the European Convention on Human Rights. These are important in connection with clinical relationships, especially compulsory detention under the Mental Health Act, but they have been less significant in connection with issues of resource allocation. Space does not permit extensive consideration of this area. However, the European Court of Human Rights has said that sensitive matters of this nature are best left to the reasonable discretion of national authorities. In contrast to EU law, therefore, the European Convention on Human Rights acknowledges the opportunity costs of requiring the treatment of patient A without knowing whether whether a decision of this nature will adversely affect patients B, C and D. To this extent, except in extreme cases, the European Convention trusts local public bodies and courts to manage and control disputes in this area.

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Priority setting: legal considerations

Judicial review proceedings


Figure 2. Three steps leading to judicial review
1. Correspondence prior to action First, there is likely to be correspondence before formal proceedings commencing. Patients who have been adversely affected by a decision are entitled to know how and why it has been made. A candid and transparent explanation of PCT procedures may demonstrate that the decision was fair and reasonable. It may also enable misunderstandings to be put aside and, if necessary, new information to be considered. If this fails

2. Pre-action protocol This is a stage at which the parties should search for a legal solution. Judicial review requires the claimant to identify the substance of the complaint and the documents that may be used, and explain why the authority is said to be wrong. New information may come to light that suggests that the original decision should be reconsidered. If this fails

3. Judicial review If pre-action protocol fails, the matter may proceed to judicial review. The claimant has three months from the date the claim first arose to issue judicial review proceedings, unless there is good reason for a delay.

We consider the two stages of judicial review proceedings below. Priority setting is a contentious area and judicial review is becoming increasingly common. What is the procedure and how should PCTs respond? It is important to contact solicitors as soon as there is a suggestion of legal action, both for their advice and because they may facilitate a solution. There are two stages to a judicial review. (a) Permission stage This stage requires the claimant to obtain the permission of the court to proceed with the case. To do so, the claimant must serve on the

defendant a Claim Form and detailed statement of the case, explaining the grounds for judicial review. This gives the defendant notice of the commencement of proceedings. The timetable for decisions about judicial review is short. If the defendant wishes to contest the claim, he must respond to the Administrative Court within 21 days with an Acknowledgement of Service and a summary of the defence. The defendant can also submit written argument that permission should be refused. At the hearing, if the judge refuses permission to proceed, the claimant can have the matter reconsidered at an oral hearing within seven days, which the defendant is entitled to attend and

Priority setting: legal considerations

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present argument. If permission to proceed is granted, the matter is taken to a full hearing. Both parties are under a duty of candour to disclose all the information connected with the case, including things that do not support their position. This is especially important for the public authority. (In any case, the Freedom of Information Act may compel disclosure of relevant documents). (b) Hearing stage The hearing stage could be within six months of permission being granted, and in an urgent case, much sooner. Judicial review is normally conducted on the papers alone. PCT officers will be required to give witness statements; they are not usually required to give oral evidence. Nevertheless, issues could arise during the hearing for which further instructions are required. For this reason, those familiar with the case should attend and assist if required. If the defendants decision is criticised and judicial review granted, the claimant will apply for a remedy. A frequent remedy is a quashing order, by which the court overturns the PCTs decision and refers it back to the PCT to be taken again. The court may also make a declaration (for example, declare that the PCT has acted unlawfully), the affect of which is very similar that is to require the matter to be reconsidered. It is uncommon in NHS cases for the court to make a mandatory order requiring the PCT to do something specific because the courts are conscious that giving resources to Peter may mean taking them from Paula.

In exceptional cases, if the claimant can prove that a decision was in breach of a duty and caused damage, the court may award damages under either the Human Rights Act or common law.

Working with lawyers


The following points can help PCTs communicate effectively with lawyers. Build up a relationship with one or two lawyers to work with the PCT and assess its policies, structures and processes. Do not use them only when the PCT is in trouble. Select your legal team carefully you need a firm specialising in the NHS. Legal advice is important build the costs into the budget. Ensure that the legal team has an overview of priority setting. Ask lawyers to check key documents. Seek regular training sessions and legal updates. Ensure that nominated individuals have access to legal opinion; particularly the director of commissioning and the senior public health consultant involved in priority setting. When in doubt, seek legal advice rather than continue to operate in an area of uncertainty. The law is not always crystal clear, but it is helpful to know where the uncertainties lie.

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Priority setting: legal considerations

Conclusion
Patients and the public should be engaged in the process of priority setting. Their involvement requires PCT policies and documents to be prepared in ways that are reasonable, accessible and transparent. In this way, the community may see and understand the need for choices in the NHS. The objective is to manage the risks of priority setting, and these risks are not just to the PCT; poor practice also puts at risk the community and individuals. Judicial review, therefore, is about reasonable systems for balancing the sometimes competing claims on finite resources. The law has developed rapidly but, within the limits we have discussed, still leaves much scope for reasonable discretion.

Key action points


Step 1: Agree key principles to underpin priority setting Ensure that the PCT board and other key members of the PCT have an understanding of the law in this area. Adopt a policy that legal training should be mandatory for key members of the PCT and arrange training as required. A one-day seminar is sufficient. Agree the principles and factors that will inform decision making and ensure that these are consistent with the law. Step 2: Develop and establish priority-setting structures and processes Draw up a set of good practice guidance as shaped by the law, or ask your lawyers to do it for you. Make a contract with your lawyers to provide legal updates and make recommendations if changes to policies and processes are needed. Ensure that there is good documentation of all aspects of the decision-making process. Audit PCT decision making regularly. Step 3: Consider how to approach key relationships Ensure that there is good access to legal advice and that designated individuals can obtain it with relative ease. Build up a long-term relationship with specialists in this field of law. Step 4: Produce key policy documents Ensure that the PCT has a document that sets out the principles, policy and processes that it will adopt when priority setting. This should apply to all levels of decision making. See Priority setting: an overview for a description of the steps.

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The author
Christopher Newdick is Professor of Health Law at the University of Reading, Honorary Consultant to Berkshire West PCT, and a member of the Berkshire Priorities Committee and the BMA's working Group on NHS rationing.

Acknowledgments
This series has emerged from the ESRC-funded series on managing scarcity in healthcare, run by Professor Cam Donaldson. It has been funded by a grant from the NHS Institute for Innovation and Improvement. The author and the NHS Confederation would like to thank Dr Daphne Austin, consultant in public health for the West Midlands Specialised Commissioning Team, for her assistance with this report. Responsibility for errors and omissions are the authors alone.

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Priority setting: legal considerations

References
1 R v N and E Devon HA, ex p Coughlan [1999] Lloyds Rep Med 306 2 National Health Service (functions of strategic health authorities and primary care trusts and administrative arrangements) (England) Regulations 2002. HMSO SI 2002, no. 2375 3 R v NW Lancashire HA v A, D & G (2000) 53 BMLR 148; [1999] Lloyds Rep Med 399 4 The Thames Valley ethical framework. Thames Valley Public Health Resource Unit, 2005 5 R (Otley) v Barking and Dagenham PCT [2007] EWHC Admin 1927; [2007] LS Law 593 6 Funding of technology appraisal guidance from the National Institute for Health and Clinical Excellence. Department of Health, 2003 7 National Health Service (General Medical Services contracts) regulations 2004. HMSO SI 2004, No. 291. 8 Revisions to the GMS Contract 2006/07. Delivering investment in general practice, Schedule 8. BMA and NHS Confederation, 2006. 9 The new NHS. Modern and dependable. Developing primary care groups, HSC 1998/139, paras 52-53. Department of Health, 1998. 10 National Health Service (General Medical Services contracts) regulations. 2004, Schedule 6, paras 15 and 39. HMSO SI 2004, No. 291. 11 R v Secretary of State for Health, ex p Pfizer [1999] Lloyd's Rep Med 289 12 Revisions to the GMS Contract 2006/07. Delivering investment in general practice, Schedule 8. BMA and NHS Confederation, 2006. 13 National Health Service (General Medical Services contracts) (prescription of drugs etc) regulations 2004. HMSO SI 2004 No. 629. 14 R (Watts) v Bedfordshire PCT Case (2006) ECJ, C-372/04

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Further reading
Newdick C. 2005: Who should we treat rights, rationing and resources in the NHS. Oxford University Press. This book considers the managerial, political, clinical and legal pressures on NHS resource allocation. The Treasury Solicitor. 2006: The judge over your shoulder, 4th edition. This book is a layman's guide to judicial review generally. www.tsol.gov.uk/Publications/judge.pdf

Priority setting: legal considerations


This report is the fourth in a series of publications that aims to help organisations review their current priority-setting processes and, if needed, provide a reference document for PCTs who still have to develop a comprehensive priority-setting framework. Previous titles in this series: Priority setting: an overview; Priority setting: managing new treatments; and Priority setting: managing individual funding requests. It is hoped that this series will also promote understanding and debate amongst a wider audience, particularly providers of healthcare who have always undertaken prioritisation at patient and service level, albeit less explicitly.

Further copies can be obtained from: NHS Confederation Publications Tel 0870 444 5841 Fax 0870 444 5842 Email publications@nhsconfed.org or visit www.nhsconfed.org/publications
The NHS Confederation 2008 This document may not be reproduced in whole or in part without permission

The NHS Confederation 29 Bressenden Place London SW1E 5DD Tel 020 7074 3200 Fax 0870 487 1555 Email enquiries@nhsconfed.org www.nhsconfed.org
Registered Charity no: 1090329

15
ISBN 978-1-85947-150-0 BOK 59601

Priority setting: managing individual funding requests

Supported by:

The voice of NHS leadership


The NHS Confederation is the independent membership body for the full range of organisations that make up the modern NHS. We help our members improve patient care and public health, by: influencing policy, implementation and the public debate supporting leaders through networking, sharing information and learning promoting excellence in employment. The Primary Care Trust Network is part of the NHS Confederation. For further details of the Primary Care Trust Network, please visit www.nhsconfed.org/pctnetwork or contact David Stout on 020 7074 3322 or at david.stout@nhsconfed.org

The NHS Confederation 29 Bressenden Place London SW1E 5DD Tel 020 7074 3200 Fax 0870 487 1555 Email enquiries@nhsconfed.org www.nhsconfed.org

Registered Charity no. 1090329 Published by the NHS Confederation The NHS Confederation 2008 This document may not be reproduced in whole or in part without permission. ISBN 978-1-85947-149-4 BOK 59501

Contents
Introduction What is an individual funding request? What approach should PCTs take to individual funding requests? The individual funding request decision-making process Service developments Other difficult areas Individual funding requests related to treatment-specific policies One-off decisions Conclusion and key action points The author Acknowledgments References Glossary 2 2 3 7 9 11 13 14 15 16 16 17 17

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Priority setting: managing individual funding requests

Introduction
In undertaking priority setting, one of the key challenges for primary care trusts (PCTs) is how to strike the right balance between providing services that meet the needs of the majority and accommodating the differing needs of individual patients. Commissioning by its very nature focuses on the larger scale. As a result, it cannot be undertaken in a way that meets all needs of all patients in any one clinical group or address the specific needs of patients with less-common conditions. Therefore, PCTs will always need an individual funding request (IFR) process to consider making additional NHS funds available for the atypical or uncommon patient. Decision making is compounded by the fact that legitimate demands for healthcare will always exceed PCT budgets. There have always been individuals whose need for healthcare has not been met by the NHS and this will inevitably continue in the future. Indeed, unmet need is an unfortunate feature of all healthcare systems. So, how should a PCT decide which individual patients should have their requests for special consideration funded? These are some of the most difficult decisions a PCT will have to face. This report explores this area of decision making and provides some good-practice points in relation to managing individual funding requests and dealing with clinicians and patients.

What is an individual funding request (IFR)?


An IFR is a request to a PCT to fund healthcare for an individual who falls outside the range of services and treatments that the PCT has agreed to commission. There are several reasons why a PCT may not be commissioning the healthcare intervention for which funding is sought. These are shown below. It might not have been aware of the need for this service and so has not incorporated it into the service specification (this can be true for common and uncommon conditions). It may have decided to fund the intervention for a limited group of patients that excludes the person making the request. It may have decided not to fund the treatment because it does not provide sufficient clinical benefit and/or does not provide value for money. It may have accepted the value of the intervention but decided it cannot be afforded in the current year. IFRs should not be confused with: decisions that are related to care packages for patients with complex healthcare needs prior approvals, which are used to manage contracts with providers.1

Priority setting: managing individual funding requests

03

What approach should PCTs take to individual funding requests?


PCTs need to have clear policies. It is important to understand that there is a direct link between IFR decisions and other aspects of PCT priority setting, so any approach a PCT takes should be in harmony with its wider policy. It may be helpful to consider that IFRs generally come in one of three circumstances: the patient has a rare condition and makes the request for funding for the usual way of treating the condition the patient has a more common condition but claims that the usual care pathway does not work for him or her the patient wants to take advantage of a medical treatment that is novel, developing or unproven, and which is not part of the PCTs commissioned treatment plans. Commonly, the first type of application is dealt with on its individual merits, while the latter two are only funded in exceptional circumstances. The law shapes this area of decision making quite considerably. Please note, therefore, another NHS Confederation publication in this series, Priority setting: legal considerations. PCTs have to be mindful that they always have opportunity costs, and a decision to fund an IFR has the potential to result in direct displacement of another service. In the majority of cases, PCTs will need to consider whether or not the exceptionality rule applies (those instances where this does not apply will be covered later). Exceptionality is essentially an equity issue that is best expressed by the question: On what grounds can the PCT justify funding this patient when others from the same patient group are not being funded? PCTs must be able to explain coherently their decisions to clinicians, patients, the public and the courts. There is a debate over whether exceptionality can, or indeed should, be defined in a PCT policy. At the very least, there should be a framework to guide decision making but it is difficult to give a comprehensive list of cases that are exceptional because, by definition, it is not possible to anticipate all instances of the unusual or the unexpected. There are four stages to considering exceptionality, three of which are done well in advance of the IFR itself (see page 4). The first two provide the foundation of the PCTs approach to exceptionality, while the third forms part of generating a treatment-specific commissioning policy, and the fourth is consideration of the individual case itself.

Exceptionality
Patients' healthcare needs that are not currently met are still legitimate. They are judged to be of differing priority. A PCT cannot agree to support every claim but neither can it decide in advance to refuse to consider funding someone whose needs do not fit the established range of commissioned services. How does the PCT identify those cases that it should fund? In making these decisions,

PCTs must be able to explain coherently their decisions to clinicians, patients, the public and the courts.

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Priority setting: managing individual funding requests

Figure 1. An example of a PCTs policy on exceptionality


The PCT does not offer treatment to a named individual that would not be offered to all patients with equal clinical need. In making a case for special consideration, it needs to be demonstrated that: the patient is significantly different to the general population of patients with the condition in question; and the patient is likely to gain significantly more benefit from the intervention than might be normally expected for patients with that condition. The fact that a treatment is likely to be efficacious for a patient is not, in itself, a basis for exceptionality. Courtesy of Dr Henrietta Ewart (adapted)

Stage 1. Understanding the meaning of exceptionality within the IFR process PCTs need to clarify what their organisation means by exceptionality by either defining or describing it. The approach that is gaining most popularity is one that Dr Henrietta Ewart developed, as shown in Figure 1. The text in italics can be considered to be the definition. Once the meaning of exceptionality is clearly understood, decision making becomes easier. Stage 2. Agreeing the factors that can be taken into account in deciding if a patient is exceptional The second consideration is the list of factors that the decision maker can take into account when judging whether or not a patient is different to other patients. PCTs are increasingly adopting policies that only allow clinical considerations. Using the definition in Figure 1 as an illustration, the PCT would first

consider whether there were any clinical features that made the patient unique or unusual compared to others in the same group. If so, then it would also consider whether there were sufficient grounds for believing that this unusual clinical factor meant the patient would gain significantly more benefit than that would be expected for the group. It is necessary to differentiate here between exceptional benefit for an individual and the identification of a patient subgroup for which outcomes are better. The latter issue should have been dealt with by the PCT when assessing the treatment (see Service developments, page 9). It must be recognised, however, that occasionally an IFR alerts the PCT to the existence of such a subgroup. In these instances, the PCT might have to go back and review its policy. Serious mental health issues should be viewed as clinical considerations and not put under the catch-all phrase of psychosocial factors.

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Are social and demographic factors exceptional?


There are several other factors frequently cited as grounds for being treated differently. Each PCT will need to come to its own view about which are acceptable. Caution is advised, however, as many feel intuitively right although closer examination may throw up some difficult issues. Here, employment can be used as an illustration. Many IFRs are made and funded in order to keep an individual in employment. From a public health point of view, there is no doubt that this has wider health and social benefits. It can also be argued that the treatment is more cost effective when these wider benefits are taken into account. It therefore feels right to fund on this basis and on one level it is. However, what would this say about access to healthcare for the unemployed? The PCT has inadvertently made a decision to dedicate more resources to maintain the health of the employed compared to the unemployed in identical clinical circumstances. Whatever the benefits of keeping patients in employment, it is suggested that there is a higher principle that overrides this consideration. This is that the NHS should treat people equally if they have equal need. There may yet come a time when society decides that the NHS should give preference to the employed, but NHS organisations are not mandated to make this value judgement at present. However, even if a PCT were inclined to fund such a treatment, in what way could the need to stay in employment be considered exceptional? Being in work is normal, unless the employment circumstances are themselves exceptional. Thus if the PCT were to fund one individual on this basis, it

may have set a precedent that inadvertently leads to a policy that employed patients should be favoured in some situations. The nature of employment also has the potential to be discriminatory. Should a concert pianist who might benefit from a treatment to improve hand function be given preference when others such as plumbers and hairdressers, whose livelihoods also depend on hand function, are not awarded funding? Employment is not always irrelevant, however. For example, there are two ways of providing peritoneal dialysis for end-stage renal failure. The first method is a simple system that involves the patient draining fluid in and out of their abdomen. The second method, which is more expensive, has a machine do this while the patient is asleep. Some patients have to dialyse at work but strict hygienic conditions must be maintained. An individual who works in a dirty environment might be considered exceptional because the nature of the employment significantly increases the clinical risk. A decision to fund may be justified because it is based on clinical, not social, considerations. Many of the above arguments are relevant to other commonly cited factors such as having educational potential, being a parent and being young. Funding on the grounds of compassion may also be sought for terminally ill patients in order that key life events can be experienced, such as a patient wanting to live to see the marriage of a son or daughter. These events are laden with emotion and meaning for the patient and their family. It can be heart wrenching to have to consider these tragic circumstances, but can it be a reason to regard such a patient as exceptional, given that a favourable decision may affect others?

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The factors covered on page 5 illustrate how important it is that those making decisions be aware of their own prejudices and also those of society in relation to deservedness, as these are not always compatible with the principles underpinning healthcare provision in the NHS. No document on IFRs can ignore the issue of rule of rescue. AR Johnsen2 coined the term in 1986 to describe the imperative people feel to rescue identifiable individuals facing avoidable death. This is a complex subject and there is no consensus about its place in resource allocation. In common commissioning parlance, the term has come to mean the proclivity of people to rescue an identifiable individual who has a life-threatening condition, regardless of cost and the chances of success. Put more crudely, it is often viewed as the last heroic attempt to save a life against the odds. Its main significance for the practitioner is that it draws attention to the emotion of the decision maker. The need and urge to do something for the patient is very strong. Most of us share this impulse. PCTs, however, do not owe a direct duty of care to

individuals and are not rescuers in any real sense. To give in to the impulse to do something can result in inconsistent and unfair decision making because agreed principles and policies are set aside in order to meet the needs of the decision maker (i.e. to feel good, avoid feeling bad, avoid unpleasantness or reduce risk). Stage 3. The likelihood of exceptional cases Normally, when assessing a specific treatment, it is advisable for a PCT to consider the nature of potential exceptions, as different diseases and treatments have differing potential to generate exceptional circumstance. It is possible to anticipate some exceptions in advance and these can be individually addressed in a treatment-specific commissioning policy. Stage 4. Considering the individual funding request itself Having set the context, the PCT can take the IFR decision itself. This involves examination of the specifics of the case in relation to the above three considerations.

What does the law have to say in relation to what is considered material to IFR decisions?
The law relating to priority setting is not at all clear about the factors that PCTs should use and what they can rule out. There are a number of cases which have gone before the courts that suggest social factors may be taken into account, even though there may be good rational and ethical arguments against their consideration. Greater certainty can only be achieved through further litigation that addresses these issues. The courts can only consider the arguments that are put before them. Poorly argued cases may set uncomfortable precedents. PCTs need to balance a concern not to use social and demographic considerations in a way that is discriminatory against the risk that a court may be inclined to set aside a decision that failed to take such factors into account.

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The IFR decision-making process


As with all priority setting, the aim is to have protocol and policy-based decision making that is robust. Different PCTs have different approaches and there is no one right IFR process. However, the following points are representative of good practice. The adoption of a policy document that sets out the framework and the process. A logging and tracking system to ensure that IFRs are dealt with consistently and in a timely way. A screening system. This should be delegated to senior officers and enables the PCT to screen out IFRs: - that represent service developments - for which there clearly is no clinical case - that raise a major policy issue and need more detailed work - that can be funded because they meet pre-agreed exceptions (some of which are set through precedent) - that can be dealt with under another existing contract - for which an alternative satisfactory solution can be found. The above step should be documented. Standard letters for screened cases. Adoption of a standard pro-forma that clearly indicates the information that the IFR panel needs. Many IFR forms fail to do this and look more like business cases pro-formas. Two leaflets that explain the IFR process and exceptionality one for clinicians and one for patients. The PCT ensures that all individuals involved in decision making, at whatever level, are familiar with legal and ethical issues, as well as the PCTs own approach to priority setting. A support team that can gather necessary supplementary information. Such a process should not be labour intensive or duplicate effort. A system that allows for the possibility of gathering more clinical information or receiving information from the patient. A clear policy statement that the IFR panel must never make policy decisions for the PCT. Policy questions should always be referred for consideration to the board, or another appropriate policy-making committee, before the IFR can be considered. An appeals process. Most PCTs consider it good practice to establish an appeals panel. The remit of this panel should be set out and understood by its members so that it does not undermine the PCTs priority-setting processes. One model for appeals panels that is gaining favour is for them conduct a quality-control check on decisions, as the High Court does in a judicial review case. The National Institute for Health and Clinical Excellence appeals process follows this format.3 In this model, the appeals panel is limited to inquiries about whether the IFR panel: - followed the PCTs own procedures and policies - considered all relevant factors and did not take into account immaterial factors - made a decision that was not so unreasonable that it could be considered irrational or perverse in the light of the evidence.

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If the appeals panel identifies a problem, the issue is referred back to the IFR panel for reconsideration. The patient or their clinicians should not normally be permitted to introduce additional evidence at the appeal stage. If there is new evidence to support a case, this does not mean that the original decision made on the evidence then available was wrong. Thus the policy should say that the case should be referred back to the IFR committee to decide whether the information is significant enough to merit reconsideration. There is good documentation of the process of decision making as well as the outcome. The reasoning, as well as the outcome, is communicated to the requesting clinician, and (and this should be the norm unless inappropriate) to the patient directly. There is a mechanism for dealing with emergencies. Urgent decisions will normally be delegated to senior public health staff. Decisions are regularly audited and the process reviewed if necessary.

Should the process allow patients to present their case at IFR or appeal panels in person? There is no single answer to this. One judicial review case has said that this is not necessary, provided the patient knows of all the arguments that have to be addressed, can submit written documents to the panel (with the doctors support if necessary) and is guaranteed an impartial hearing. The case noted the disadvantages of judicialising these procedures. This is a matter for PCTs. Some are not comfortable with patients presenting to panels, while others see it as a way to make their decisions more open and accountable.

If there is new evidence to support a case, that does not mean that the original decision made on the evidence then available was wrong.

Working with patients and their families


The following points can help PCTs communicate effectively with patients and families. Set standards for making decisions in a timely way. Keep parties informed of progress if delays occur. Have protocols for dealing directly with patients. Never engage in email dialogue with patients as this risks saying something ill-considered. If needed, send a letter by email. Be frank, open and sincere in all dealings with patients. When communicating decisions not to fund treatments, consider adopting some of the practices used for breaking bad news. Consider training staff to deal with angry patients and carers.

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Service developments
Service developments have largely been dealt with in the NHS Confederation publication in this series, Priority setting: managing new treatments. However, a discussion is needed here because clinicians often use the IFR route as a means to gain early access to a new treatment. The NHS Contract for 2008/09 makes it clear that the hospital provider is expected to seek funding for new treatments through submission of a business case to the commissioner (Schedule 6, point 8.3). There is, therefore, an expectation that new treatments will be properly assessed and prioritised. It is not rational for a PCT to manage a new treatment by considering one patient at a time. Nor would this be fair, because it breaches a principle commonly adopted by PCTs, namely that: The PCT does not offer treatment to a named individual that would not be offered to all patients with equal clinical need. (See Figure 1, page 4). The use of the IFR system as a means to fund some patients ahead of others could be viewed as an abuse of the system. This is not the purpose of IFR processes but it has not stopped the reported rise in the number of requests in this category. This situation needs active management. There are several options open to PCTs, such as using the NHS contract to full effect and having an ongoing dialogue with provider executives and clinicians. A PCT can also use interim commissioning policies. for a policy vacuum. This makes managing service developments and IFRs extremely difficult. For drugs, this interim period can start well before the date of licensing. It is recommended that PCTs adopt an interim commissioning policy for use during this period. Logic suggests that a PCT should not fund treatment for some patients ahead of others and that time should be allowed for the assessment and prioritisation decisions to be made. Once a PCT has assessed a treatment, its conclusion may be one of the following: that the treatment provides good health gain, is value for money, has met the exceptionality criteria for in-year service development and will be funded that the treatment provides good health gain, is value for money and will be referred to the annual commissioning round for prioritisation that the treatment provides good health gain, is value for money for a sub-group of patients and a service development for this group alone will be referred to the annual commissioning round for prioritisation that the treatment will not be funded because there is insufficient evidence of clinical effectiveness, it represents poor health gain or is not cost effective. PCTs come under understandable pressure to fund treatments as soon as the claimed effects appear in the national media. It is recommended that, until such time as a treatment is actually funded, the policy should clearly say that the PCT will refuse to use the IFR process to fund service developments. That is not to say that exceptional cases cannot arise in this interim period. However, the reader is again referred to Figure 1.

Interim commissioning policies


Between the time when clinicians and patients want access to a treatment and the time when the PCT makes its definitive decision, there is the potential

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Priority setting: managing individual funding requests

Difficulties in identifying some service developments


There is currently a deficiency in PCT planning for some new interventions for uncommon conditions that represent a significant service development for PCTs sharing a tertiary centre. Some of these will fall under the commissioning arrangements for specialised services but many will not. There is a temptation in these instances for a PCT to manage such developments through the IFR route, rather than making policy decisions about the treatment or working with other PCTs to manage them. This is poor practice for many reasons. In the absence of an alternative, it will be difficult for providers to fulfil the requirements of Schedule 6 of the standard NHS Contract. As a result, the IFR route will be the only route open to providers to obtain approval for treatment.

Equally problematic is the fact that the IFR panel in such instances considers only whether the patient will benefit not whether they are exceptional. Using the IFR route in such cases may be appropriate for highly unusual conditions, but if the PCT expects to see more than one case a year, a policy approach will deliver greater certainty and consume fewer PCT resources to manage.

The IFR panel in such instances considers only whether the patient will benefit, not whether they are exceptional.

Working with clinicians and trusts


The following points can help PCTs communicate effectively with clinicians and trusts. Ensure that trusts and clinicians understand: - what constitutes a service development, a prior approval and an IFR - what is expected of them - what they can expect from the PCT. Use the NHS Contract to full effect to manage new treatments. Be consistent in your responses do what you said you would do. Develop a range of standard letters for common circumstances. Be frank and open in all dealings with clinicians and providers. If there is a consistent failure by a clinician or department to comply with procedures that have been set down by the PCT, take it up with the chief executive of the provider trust and ensure it is resolved.

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Other difficult areas


Co-payment
Co-payment is the situation in which a patient pays for some aspect of treatment while being treated in the public sector. The NHS Act does not allow the recovery of charges for healthcare.4 In addition, the Code of conduct for private practice: guidance for NHS medical staff 5 indicates that if a patient wishes to become a private patient, he/she cannot be treated as a private patient and an NHS patient during a single visit to an NHS organisation. The Code of conduct also states that: Any patient changing their status after having been provided with private services shall not receive an unfair advantage over other patients. This document is, however, only guidance and trusts have discretion to depart from it if they make a policy decision to do so. Equally, PCTs could, as a policy, decide that the trusts with whom they contract are required to work within the guidance. A typical IFR of this type is a request to pay for the service costs to help a patient access a treatment that the PCT itself does not fund. The Governments current position is to rule out co-payment and it is recommended that PCTs policies follow this guidance. This is because it would provide access to a treatment that the PCT was not making available to others. There is currently a case going before the courts that might clarify the issue. up funding. IFRs asking the PCT to pick up the funding for patients leaving clinical trials are illustrative of this problem. What should happen to patients at the end of trials in which they have participated is indicated in the Declaration of Helsinki (2004)6: At the conclusion of the study, every patient entered into the study should be assured of access to the best proven prophylactic, diagnostic and therapeutic methods identified by the study. With a clarification note The World Medical Association hereby reaffirms its position that it is necessary during the study planning process to identify post-trial access by study participants to prophylactic, diagnostic and therapeutic procedures identified as beneficial in the study or access to other appropriate care. Post-trial access arrangements or other care must be described in the study protocol so the ethical review committee may consider such arrangements during its review. The Medicines for Human Use (Clinical Trials) Regulation 2004 also makes reference to patients leaving trials: 7 Schedule 3: Particulars and documents that must accompany an application for an ethics committee opinion. Part 1: An application document including the following information or, in each case, an explanation of why that information is not being provided (m) Details of (iii) the plan for treatment or care of subjects once their participation in the trial has ended.

Trial pick-up
There are several situations in which an external organisation will take a decision to start treatment, either hoping or assuming that the NHS will pick

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These documents suggest that: there should be a plan that describes the arrangements for treating patients leaving trials the plan should be considered during the ethical approval process the exit strategy should enable the patient to have ongoing access to any healthcare that has been shown to be beneficial in the study. Neither of these documents states who should be responsible for ongoing access to treatment. PCTs are entitled to agree to pick up trial funding but they are not required to do so unless they commissioned the trial or agreed to fund at an earlier stage. In all other instances, liability cannot rest on the PCT unless it has given prior commitment. It is recommended that PCTs adopt an approach that makes it clear that they cannot be held responsible for decisions to which they were not party. Many PCTs adopt a policy of not generally funding patients coming off trials and only funding trial patients when the service development has been funded and the treatment is made available to all. For trial patients, in particular, it is difficult to anticipate what might constitute exceptional circumstances. Being in a trial is not, of itself, unique; nor is benefiting from the treatment being studied. Trials are also frequently designed to recruit a uniform patient group.

Patients who have part-funded themselves in the private sector for treatments
Another category of IFR that is on the increase comes from patients who have sought private care to access a treatment that their PCT is not currently funding, but who have not been able to afford the full course. Having run out of their own funds, they seek funding from the PCT to complete the course. To pick up funding routinely in these instances would place PCTs in an untenable position. However, if a PCT is faced with such an application, it is obliged to consider the application on the basis of all the evidence in the case. This situation raises two other issues. The first relates to questionable governance within the private sector for failure to ensure that a patient is able to fund a complete course and, if not, failure to agree an exit strategy for patients in much the same way as clinical studies are required to do. NHS pick-up of funding cannot be assumed. The other issue relates to the behaviour of clinicians. Clinicians are at liberty to treat patients privately. Having done so, however, it is unacceptable for a clinician to transfer moral responsibility for creating differential access to treatment onto a PCT. While the PCT cannot influence these behaviours, it is always worth raising such issues with clinicians and private providers.

There is often a real problem in instances where there is no prospect of evidence ever being gathered, such as in treatments for children.

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Experimental treatments
A cornerstone of the NHS today is that it provides treatments of proven cost effectiveness. When a treatment has not been subject to adequate study and where it would be possible to undertake a study (even if the research community is not currently prioritising it) the treatment should be classified as experimental and not generally funded. There is, however, often a real problem in instances where there is no prospect of evidence ever being gathered. These include many treatments for children. In these instances, the PCT might need to make a different assessment, as discussed in the section on one-off decisions (see page 14).

In certain circumstances, it may be worth considering funding a patient to enter an existing trial or even working collaboratively with other PCTs and organisations to establish a trial. There is no legal barrier to this. There is also the potential to fund what are known as n of 1 trials. These are formal trials where the patient acts as his or her own control. These cannot be used in all situations and their role in evaluating treatments has yet to be fully ascertained. Currently, there is no n of 1 trial unit operating in the UK, although there is at least one initiative to seek to establish one. The above list of potentially difficult areas is not exhaustive but illustrative.

IFRs related to treatment-specific policies


The IFR process was largely designed to deal with two other patient groups and these will be briefly discussed in the next two sections. As part of its commissioning policies, a PCT may chose either to not fund a treatment at all or to fund it only in particular sub-groups of patients. In either instance, the PCT should produce a commissioning policy that explains its approach. Those patients falling into the non-funded group will not all be the same the degree of difference will depend on the heterogeneity of the condition, and to some extent the nature of treatment. It is highly likely, therefore, that there will be patients who do not fit the typical patient profile and who might be expected to do better on treatment. In these situations, the principle of exceptionality is the key consideration for assessing IFRs.

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Priority setting: managing individual funding requests

One-off decisions
Off-licensed use for unusual clinical conditions or complications, children with uncommon conditions and adults with rare diseases
As was discussed earlier, in some situations the principle of exceptionality cannot readily be applied. For some IFRs there is simply no reference point: the patient does not come from a sizeable group of patients (often they may be unique) nor is there much evidence about the treatment in question and there may never be. In these instances, the IFR panel has to assess only whether the patient is likely to benefit from the treatment and the priority to be given to the patient. Namely, it is treated as a service development for 1. Under these circumstances, in addition to questions about priority and value for money, the following need to be asked: What is the nature of the condition? What is the nature of the treatment? What is the evidence that this treatment might work in this situation? Is there biological plausibility that this treatment might work? The majority of these can be dealt with through the IFR process alone. However, occasionally the financial commitment is so large the decision needs to be referred to the PCT board. A decision to fund a treatment that costs 300,000 per patient per annum is probably not one the IFR panel alone can make.

How to support the decision makers


Give recognition to the demanding nature of the area of work. Provide a clear priority-setting framework it is always easier for individuals to operate within clear policies and protocols. Provide training. Develop organisational cohesion. Having established a priority-setting framework, the PCTs board must support its officers when they operate within that framework. Decision making should largely be undertaken by groups rather individuals. Delegated functions should operate within clear protocols. Identify those situations that are best dealt with by those within the PCT who are clinically trained. Develop professional networks so that when the going gets tough there is a source of support.

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Conclusion
The IFR process is demanding but improvements can be made to make the system more efficient, robust and fair. Although this is a high-risk area for a PCT, funding individual treatments should contribute relatively little to the PCTs priority setting. However, if done poorly, it has the potential to drive the PCTs priorities, resulting in resources being committed to low-priority areas. This may adversely affect other patients. Exceptionality is difficult in ethics, medicine and law. It is impossible to be definitive as to its meaning at this stage. PCTs and clinicians should collaborate with one another to share best practice and learn from experience.

Key action points


Step 1: Agree key principles to underpin priority setting Describe exceptionality and the factors that the PCT panels can take into account in their decisions. Step 2: Develop and establish priority-setting structures and processes Agree and document the process for managing IFRs, paying attention to the role of the appeals panel. Ensure that there is good documentation of the panels decisions, including the reasons. Ensure that there is a schedule of delegation. Ensure that the board and members of panels are versed in the relevant law and understand the policies adopted by the PCT. Offer training in breaking bad news and dealing with difficult patients. Step 3: Consider how to approach key relationships Ensure consistency of action in all dealings with providers and clinicians. Set standards and policies for dealing with patients and their families, and ensure that they are adhered to. Step 4: Produce key policy documents The overarching policy document on resource allocation should include the PCTs management of IFRs and commonly faced issues (although these can be in supplemental documents). Ensure that generic policies are developed for difficult areas of policy. There should be documented commissioning policies whenever the PCT has made a decision about a treatment. See Priority setting: an overview for a description of the steps.

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The author
Dr Daphne Austin BSc MBChB FFPHM Dr Daphne Austin is a consultant in public health currently working for the West Midlands Specialised Commissioning Team. Dr Austin has an extensive background in public health, spanning 17 years. Dr Austin established the UK Commissioning Public Health Network, which she currently chairs.

Acknowledgments
This series has emerged from the ESRC-funded series on managing scarcity in healthcare, run by Professor Cam Donaldson. It has been funded by a grant from the NHS Institute for Innovation and Improvement. The author and the NHS Confederation would like to thank the following people for their input and involvement with this series of publications: Professor Cam Donaldson and the UK Forum for Priority Setting in Healthcare Professor Chris Newdick Claire Cheong-Leen Dr Henrietta Ewart The contributions of Professor Christopher Newdick and David Lock, barrister, to this report have been valuable. The author alone is responsible for the opinions expressed. Responsibility for errors and omissions are the authors alone.

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References
1. The standard NHS contract 2008/09. Schedule 3, part 1. www.dh.gov.uk/en/Publicationsand statistics/Publications/PublicationsPolicyAndGuid ance/DH_081100 2. AR Johnsen: Bentham in a box: technology assessment and health care allocation. Law, Medicine and Health Care 1986,14:172-4 3. National Institute for Health and Clinical Excellence. 2004: Appraisal process: guidance for appellants. www.nice.org.uk/aboutnice/howwework/devnice tech/technologyappraisalprocessguides/appraisal _process_guidance_for_appellants_reference_n0 520.jsp 4. National Health Service Bill 2006. www.dh.gov.uk/en/Publicationsandstatistics/Publi cations/PublicationsLegislation/DH_4134387 5. Department of Health. 2003: A code of conduct for private practice: guidance for NHS medical staff www.dh.gov.uk/en/Publicationsandstatistics/ Publications/PublicationsPolicyAndGuidance/ DH_4100689 6. World Medical Association. 2004: Declaration of Helsinki. www.wma.net/e/policy/b3.htm 7. The Stationery Office. 2004: The Medicines for Human Use (Clinical Trials) Regulations. www.opsi.gov.uk/si/si2004/20041031.htm

Glossary
Service developments a catch-all phrase referring to anything that needs investment. It refers to all new developments, including: new services; new treatments, including drugs; changes to treatment thresholds; and quality improvements, such as reduced waiting times. It also refers to other types of investments that existing services might need, such as pump-priming to establish new models of care, training to meet anticipated manpower shortages and implementing legal reforms. Overarching policy document on resource allocation the document that sets out a PCT's approach to resource allocation, which may be supplemented by more detailed policy documents and protocols. This document and any associated documents should comprehensively set out key principles, policies, protocols and any scheme of delegation for decision making.

Priority setting: managing individual funding requests


This report is the third in a series of publications that aims to help organisations review their current priority-setting processes and, if needed, provide a reference document for PCTs who still have to develop a comprehensive priority-setting framework. Previous titles in this series: Priority setting: an overview; and Priority setting: managing new treatments. It is hoped that this series will also promote understanding and debate amongst a wider audience, particularly providers of healthcare who have always undertaken prioritisation at patient and service level, albeit less explicitly.

Further copies can be obtained from: NHS Confederation Publications Tel 0870 444 5841 Fax 0870 444 5842 Email publications@nhsconfed.org or visit www.nhsconfed.org/publications
The NHS Confederation 2008 This document may not be reproduced in whole or in part without permission

The NHS Confederation 29 Bressenden Place London SW1E 5DD Tel 020 7074 3200 Fax 0870 487 1555 Email enquiries@nhsconfed.org www.nhsconfed.org
Registered Charity no: 1090329

15
ISBN 978-1-85947-149-4 BOK 59501

Priority setting: managing new treatments

Supported by:

The voice of NHS leadership


The NHS Confederation is the independent membership body for the full range of organisations that make up the modern NHS. We help our members improve patient care and public health, by: influencing policy, implementation and the public debate supporting leaders through networking, sharing information and learning promoting excellence in employment. The Primary Care Trust Network is part of the NHS Confederation. For further details of the Primary Care Trust Network, please visit www.nhsconfed.org/pctnetwork or contact David Stout on 020 7074 3322 or at david.stout@nhsconfed.org

The NHS Confederation 29 Bressenden Place London SW1E 5DD Tel 020 7074 3200 Fax 0870 487 1555 Email enquiries@nhsconfed.org www.nhsconfed.org

Registered Charity no. 1090329 Published by the NHS Confederation The NHS Confederation 2008 This document may not be reproduced in whole or in part without permission. ISBN 978-1-85947-147-0 BOK 59301

Contents
Introduction Why is managing new treatments so important? In-year service developments What information is needed to assess and prioritise a treatment? Cost effectiveness/value for money Commissioning policies Key action points The author Acknowledgements Glossary References 2 3 5 8 10 17 18 19 19 20 20

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Introduction
Managing the constant demand for new treatments can be difficult for primary care trusts (PCTs). They are under pressure to invest in them, while ensuring cost effectiveness. Drugs, technologies and treatments appear throughout the financial year but PCTs rarely have large contingency funds. This report sets out some of the key considerations for developing priority setting in relation to new treatments, with a useful list of action points. Managing the introduction of new treatments can be interpreted in different ways. This report looks at those differences in understanding, specifically: the nature of funding decisions for new treatments what constitutes a service development the role of licensing the duties of PCTs to provide treatments that are effective and cost effective.

Key action points for PCTs


Agree key principles to underpin priority setting Develop and establish priority-setting processes Consider how to approach key relationships Produce key policy documents.

Information needed to assess and prioritise a treatment


Assessment processes need to be flexible. Figure 3 on page 9 sets out the information commonly used. It includes information about the treatment, the evidence and the costs.

Cost effectiveness
PCTs do not generally measure cost effectiveness using health economics techniques. However, it is helpful to have a cost-effectiveness measure, particularly when considering disinvestment in a potentially controversial area or to identify a group of patients in whom an otherwise cost-ineffective treatment is highly cost effective.

In-year service developments


PCTs should build up a set of criteria for making in-year funding decisions, as part of an overarching policy on resource allocation.

Managing requests for new treatments during the financial year


Assess rapidly to screen for exceptionality If the treatment does not meet the criteria, assess it through the normal processes in time for the next annual commissioning round Prioritise in annual commissioning round.

Commissioning policies
Policies should state explicitly what PCTs will and will not fund. They should facilitate consistent decision making, and consider: what, if anything, is to be provided controls what information the PCT wants compliance checks and monitoring spending exceptionality criteria who can make which decisions.

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03

Why is managing new treatments so important?


Managing new treatments is different to managing other service developments. The pressure exerted on PCTs to invest in new treatments makes it a high-risk area. This report sets out some of the key considerations for developing priority setting in relation to new treatments. The term managing the introduction of new treatments is commonly used in relation to the NHS but it means different things to different people. Many perceive that successful management results in patients having smooth and timely access to new technologies and drugs, where timely means when a treatment is licensed. However, commissioners frequently have a different interpretation. Their aim in managing new treatments is to ensure that a treatment only becomes available when funding has been agreed through a formal prioritisation process and that access is in line with the PCTs commissioning policy. Underlying these potentially opposing perspectives are differences in understanding that can cause tension between stakeholders. Four common sources of that tension are shown below. 1. Differences in understanding about the nature of funding decisions for new treatments In Priority setting: an overview1, the concept of singular decision making as opposed to prioritisation was discussed. Singular decision making focuses on the clinical and cost effectiveness of an individual treatment without reference to opportunity costs or affordability. Prioritisation, which is how PCTs aim to make their decisions, is a much more complicated process. This takes a comprehensive view of a treatment and sets its priority against existing services and other potential service developments. Problems arise when clinicians, patients and other lobby groups believe that decisions should be based purely on whether a treatment works or not. 2. Differences in understanding about what constitutes a service development A long-standing feature of the NHS is that service developments are prioritised in the annual commissioning round. There is, however, no definition of what constitutes a development. Many clinicians and provider organisations tend to think of them only in terms of service infrastructure. But a service development is anything that has resource implications, including new treatments, changes to more expensive treatment protocols and expanded access to a treatment. Under this definition, a new treatment for an uncommon condition that costs 30,000 per patient would be considered a service development even if the PCT expected only one patient in its population to be eligible each year. The 30,000 would still have to be found recurrently. The treatment must therefore be subject to prioritisation. Although there is ready acceptance from clinicians and providers that investments in infrastructure have to be prioritised as part of the annual commissioning round, this is often not the case for new treatments. As a result, a different set of behaviours can be observed from clinicians in relation to new treatments as opposed to requests for other service developments.

A service development is anything that has resource implications for the PCT.

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Priority setting: managing new treatments

3. Differences in understanding about the role of licensing Licensing processes are designed to give confidence to the public that products are safe. In the UK, drugs and medical devices are made available under a strict regulatory framework. In addition, the National Institute for Health and Clinical Excellence (NICE) carries out a licensing function with its interventional procedures programme (which is to be distinguished from its technology appraisal programme.) Although it is not a regulatory body, NICE looks at the safety and efficacy of new interventional procedures and gives guidance to the NHS on whether procedures, such as new surgical operations, can be safely adopted into routine practice. Taken together, these organisations provide scrutiny over the safety of many new clinical interventions. Patients and healthcare professionals often view an approval from these organisations as a mandate for the intervention to be made available in the NHS. This is not the case. These processes make no judgement on the clinical effectiveness, cost effectiveness or relative priority of treatments.

4. Differences in understanding about the duties of PCTs to provide treatments that are effective and cost effective It goes without saying that in a system that operates with fixed budgets and significant unmet healthcare need, there can be no guarantee of funding for any service development, even those that are cost effective. Cost effectiveness, at least as presently defined, should generally be seen as a minimum requirement for a service development being referred to the annual commissioning round for prioritisation. Clinicians often see the provision any new effective treatments as an absolute duty for the NHS, which, legally speaking, is not correct. It is also impossible in a cash-limited system. The above four points illustrate the need for PCTs to work much more actively to raise awareness and understanding about how they go about priority setting.

Figure 1. Organisations carrying out licensing-type functions


Responsible organisation Those working within a strict regulatory framework European Agency for the Evaluation of Medicinal Products Medicines and Healthcare Products Regulatory Agency Working within a clinical governance framework National Institute for Health and Clinical Excellence Type of treatment Drugs Drugs and medical devices Interventional procedures

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In-year service developments


Currently, PCTs undertake one major priority-setting exercise towards the end of every financial year. It is during the annual commissioning round that decisions are made about investments for the coming year. Those developments that are supported are not all necessarily made available on the first day of the new financial year. The largest group in this category are those assessed under NICEs technology appraisal programme, which are released throughout the year. Some new treatments will therefore be made available during the financial year but these are all planned developments, for which funds are set aside. New drugs, technologies and procedures regularly come on line throughout the financial year. Under what circumstances might a PCT fund an unplanned development during the financial year? One of the risks of unplanned developments is that they bypass prioritisation processes. It is in these situations that PCTs are most likely to slip into singular decision making, which is ethically questionable for all the reasons set out in Priority setting: an overview. Furthermore, because PCTs rarely operate large contingency funds, when new commitments are made during a financial year something else has to give way either through disinvestment or by delaying other planned developments. Unplanned investment decisions, therefore, should only be made in exceptional circumstances. PCTs are familiar with the concept of exceptionality in relation to individual funding requests but the concept applies to other areas of priority setting. One of these is in-year service developments. PCTs need to build up a set of criteria for making in-year funding decisions. These should form part of the overarching policy document on resource allocation that sets out how the PCT will carry out priority setting in key areas of activity: strategic planning; the annual commissioning round; the management of in-year service developments; and individual funding requests. The following are examples of exceptional circumstances that might require unplanned funding: a major incident that requires additional funds to manage a serious health risk, such as an outbreak of an infectious disease, or a major environmental accident, such as the spillage of a toxic chemical an urgent service problem, such as a major failure in clinical practice that requires a look-back exercise to identify at-risk individuals to whom additional screening and treatment might be offered a new intervention that is of such important strategic importance that it should be introduced immediately, for example a vaccine against HIV infection. (In reality it is improbable that such a development would not be known about in advance) a new treatment that provides such significant health benefits that the PCT wishes to introduce it immediately a new directive issued from the Secretary of State or a new legal ruling requiring immediate implementation. The fourth bullet point above presents some difficulty because significant health benefit has to be defined. This is difficult to quantify but, by definition, it has to be exceptional. In the authors view, there has only been one drug in this category

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Priority setting: managing new treatments

in 17 years and that example might be illustrative of exceptionality. On the evidence available at the time of licensing, there was very good reason to consider this treatment to be life saving, providing health gain that could be measured in years rather than weeks or months. The drug also appeared to provide this benefit to almost 100 per cent of patients who received it. This is an extremely rare occurrence. Even those treatments that are generally considered to be good fall well short of this. It is therefore reasonable to make an assumption that most unplanned investment will be reserved for the management of serious events or new legal requirements. It is self-evident that any new service or treatment that is considered important can be funded at any time if matched disinvestment of a lower-priority intervention or service can be found.

following this, the drug meets the criteria then the PCTs board will have to agree how it will be funded. A commissioning policy is produced. 3. If the treatment does not meet the criteria then time can be taken to assess it through the PCTs normal processes in readiness for the annual commissioning round. A PCT is likely to have a number of routes for this. A cancer drug, for example, might be referred to the cancer networks drug and therapeutics committee. Thereafter, the network would be asked to prioritise the drug against all other interventions related to cancer services (primary prevention, screening, treatment and palliation) and its recommendations would be considered as part of the priority setting of the annual commissioning round. An interim commissioning policy is produced to state that the treatment will not be available until it has been fully assessed and prioritised. 4. The treatment is then prioritised as part of the annual commissioning round. If it is given high priority and can be afforded, it can be made available to the local population. A commissioning policy is produced defining the access criteria. If it is low priority, a commissioning policy is produced saying the treatment will not be made available. If a treatment is desirable but cannot be afforded in the coming year, the PCT should ensure that there is a bring-forward system to enable it to be reconsidered in subsequent commissioning rounds.

How might a request to make a new treatment available in-year be handled?


Let us take the example of a new cancer drug that has entered the market, having been granted a licence in July. A local provider seeks funding to enable it to add this to its hospital formulary. Consider the following sequence of steps. 1. The first step is to make a rapid assessment to screen for exceptionality. An experienced individual can readily gather the required information in a few hours. 2. Using this information, the treatment is checked against the PCTs own criteria for exceptionality. The process and outcome is documented. If it is considered to be a potential exception, an urgent, thorough assessment is initiated. If,

Most unplanned investment is reserved for serious events or new legal requirements.

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Treatments in the NICE technology appraisal programme


Much is made of whether a treatment is in NICEs technology appraisal programme or not. This is irrelevant. All new treatments should be approached in the same way all should be screened and, if not exceptional, referred to the earliest decision-making point as shown in Figure 2. For some treatments, this point is when NICE issues its guidance. In others, it will be the PCTs own annual commissioning round.

before demand occurs. The point at which demand for a drug is most readily identified is its licensing date; this point is much less clear for medical devices and operations, which cannot always be identified in advance. In addition, early assessment of a forthcoming treatment is not always possible because the information needed may not be available. It is likely, therefore, that there will always be a mix of proactive and reactive management by a PCT. Horizon scanning can also identify potentially controversial treatments. There may only be one or two per year but a PCT needs to plan fully for them, sometimes collaboratively with other PCTs. Horizon scanning, therefore, is about preparedness not, as some might suggest, about avoiding controversy.

Horizon scanning
Horizon scanning enables a PCT to put new treatments in the annual commissioning round

Figure 2: Decision-making tree for a new treatment coming to market during the financial year
JULY NICE guidance due before the next ACR Annual commissioning round (ACR) NICE guidance due after the next ACR

New treatment

Assess the treatment for exceptionality

Treatment is made available

Treatment is not funded

Exceptional and funding found Treatment is made available

Not exceptional treatment referred to the most appropriate decision-making forum

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Priority setting: managing new treatments

What information is needed to assess and prioritise a treatment?


The level of scrutiny a PCT might wish to adopt for any given treatment will vary, so any assessment process needs to be flexible. In addition, PCTs can only use the best information they have available to them when they make their decision. Thereafter, they might be able to review their decision when more information comes to light. This review might lead to a change in policy in either direction investment or disinvestment. Figure 3 opposite gives the key pieces of information a PCT might use in assessing a treatment. 2. How will the PCT manage experimental treatments and in what context might the PCT fund an experimental treatment? Experimental treatments should generally not be funded. It is legitimate, however, for PCTs to choose to fund a treatment in the context of a clinical trial. They can do this by contributing to an existing trial or by choosing to work collaboratively with other PCTs to set up their own trial. The latter is a challenge but there is precedent. It is likely that a PCT will take this course of action only for strategically important treatments. Funding a trial generally demands new funds, so any such proposal should be subject to prioritisation. A note of caution is raised against funding of what can be described as pseudo trials. These are poorly constructed trials often carried out only at a local level. They are not methodologically robust and so will not generate any useful evidence. Local evaluation, for example, is something that needs to be scrutinised closely as it can be nothing other than case series observations.

Experimental treatments
The NHS has not yet developed a comprehensive approach to experimental treatments and it is an area that needs more attention. PCTs should, however, aim to set out an approach to this group. From the PCTs point of view, there are two key questions: 1. What does the PCT define as an experimental treatment? The simple answer to this is anything for which there is no robust evidence. The most likely types of interventions falling into this category are treatments for rare conditions, interventional procedures and medical devices. The way that the scope of existing treatments tends to expand is directly analogous to experimental treatments and PCTs may need to have systems in place to monitor this.

It is legitimate for PCTs to choose to fund a treatment in the context of a clinical trial.

Priority setting: managing new treatments

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Figure 3. Information commonly used to assess a new treatment


Item of information The treatment Information about the disease, its course of development and its management. Information about the new treatment and how it is thought to work. How does this help the decision maker? This provides important background information and indicates the potential impact of the treatment. This helps inform the validity and value of the outcome measures used in trials. This is particularly important when proxy measures, such as biological changes, have been used, as they may not translate into actual benefit for the patient. This is needed to estimate the benefit and cost impact.

The number of people in the local population who are likely to be treated now and in the future. Information about key aspects of delivering the new treatment.

This provides information related to prioritisation (for example, related service costs that have to be taken into account), feasibility of introducing the service (for example, manpower requirements and potential shortages), policy making (for example, the need to impose controls on a treatments use) and planning implementation. This indicates the health gain that might be associated with the treatment. This indicates the level of confidence with which the treatment will provide the outcomes stated. This provides some policy options.

The evidence The health outcomes found in trials. The quality and nature of the evidence. Identification of subgroups of patients that might gain more or less benefit than other patients. The NNT (number needed to treat). For example, if the NNT is 20 then 20 patients will need to be treated before one patient will gain benefit. The costs The total cost of providing the new treatment. The cost of different policy options.

When combined with other information, this gives an indication of value for money.

This is needed to assess affordability and the size of the opportunity costs. This provides the opportunity cost and affordability of policy options. This is particularly useful if it is not possible to provide access to all patients. This indicates whether the PCT needs to initiate a piece of work to address wider policy questions. This, together with other information, helps shape the priority of the treatment within a programme area.

Other Identification of new ethical or policy principles. How does this treatment support the delivery of agreed priorities for the service area?

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Priority setting: managing new treatments

Cost effectiveness/value for money


Cost effectiveness is considered one of the key principles underpinning the provision of healthcare in the NHS. Cost effectiveness helps to answer questions such as Is this good value for money? Can I justify spending money on this? and Does society value this enough to pay this price? In adopting this principle the NHS has, by implication, made a commitment to not funding treatments that are not cost effective. In order to decide what is good or poor value for money, cost effectiveness has to be assessed or measured in some way. For a number of reasons, PCTs do not generally employ health economics techniques: they are labour intensive and therefore expensive to generate; it is not feasible to generate costeffectiveness analyses for all services; they do not provide sufficient information about health outcomes; and they do not incorporate all factors important to decision makers when setting priorities. There are nevertheless times when such a measure is invaluable. Examples are when considering disinvestment or identifying a sub-group of patients in whom an otherwise cost-ineffective treatment is highly cost effective. The measure used by organisations such as NICE is cost per quality adjusted life year (QALY). The QALY takes into account both the quality and quantity of life. A treatment that provides one QALY for 5,000 is considered to be more cost effective than one that does so for 10,000. The current cost-effective threshold NICE uses is less than 20,000 per QALY. NICE will consider treatments in the range of 20,000 to 30,000 and also above 30,000 but with additional qualification. These thresholds are themselves controversial. There has been a call to increase them on the grounds that treatments have become more expensive since NICE was established. There has also been a call to lower the thresholds from those who consider the current levels unsustainable. For PCTs, a key problem with the QALY is that, although it is a measure of health gain, it does not distinguish qualitatively between one person getting a whole year and 365 people getting one day each (and all the states in between). Indeed, it is designed not to. The measure is therefore neutral about how a QALY is achieved. PCTs, on the other hand, place very different values on one person getting one extra year of life and 12 people each getting one month, even if the cost per QALY is the same in both instances. For PCTs, the nature of the health outcome is an independent factor that they take into account. PCTs tend to consider cost effectiveness using value-for-money assessments based on the health gain, the NNT and cost (see figure 3, page 9). Whatever the threshold and however it is measured or estimated, services are going to fall either above or below a given line and PCTs have to take a view about what to do with each category. This is not as straightforward as it might seem.

Treatments that lie above the cost-effectiveness threshold


Treatments above the threshold should not normally be funded. However, not all treatments above the threshold are the same. Some are treatments that do not provide any valued health gain. These simply should not be funded and there is little point in attempting to seek ways to make them more affordable.

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11

Other treatments provide valued health gain but are too expensive. The PCT might consider providing such treatments if they were cheaper. One option for dealing with this group is to set a price for the treatment that the NHS is willing to pay. Currently, there is no legal mechanism for PCTs themselves to do this. Another option is to use a rebate scheme, whereby the NHS is reimbursed when a treatment has not been successful for a particular individual. So far there are only two rebates schemes in operation one for drugs for multiple sclerosis and one for the cancer drug Velcade. These schemes are controversial and many PCTs feel that they have not been fully thought through. With or without the ability to change the price PCTs pay for a treatment, there will always be treatments that sit above the cost-effectiveness threshold. It is possible that there are occasions when a PCT might wish to fund a treatment in this category. Here again, the concept of exceptionality arises.

In Figure 4 overleaf, two scenarios for agreed exceptions above a threshold are shown. The aim in developing a framework is that it results in scenario 1 namely, relatively few exceptions are agreed. Scenario 2, on the other hand, is a situation in which so many exceptions are agreed that the very notion of cost effectiveness is undermined. This can be viewed as unsustainable. The major problem facing PCTs is that it has been impossible to come up with criteria that do not eventually create scenario 2. The author is not aware of any that have been successfully developed. There is a growing suspicion that such a set of principles might not exist. This leads to a rather stark (and perhaps currently unpalatable) conclusion that the cut-off might point just be that a point above which nothing will be funded. The NHS urgently needs to find a resolution to this question or ad-hoc decision making will continue. The only organisation that has made some attempt at documenting potentially relevant principles is NICE, in its Guide to the methods of technology appraisal2. It has published the following considerations for agreeing treatments above the 20,000 / QALY level: the degree of uncertainty surrounding the calculation of the QALY the innovative nature of the technology the particular features of the condition and the population receiving the technology instances where there are wider societal costs and benefits. All of these, however, are ill defined and, as such, contestable. For example, what particular features of the condition is the decision maker looking for?

Applying the concept of exceptionality to treatments that are not cost effective
A policy framework is required to consider treatments that offer valued health benefits but are very expensive. Such decisions cannot be made on an ad-hoc basis. The framework that is adopted needs to be: coherent with overall decision making principled objective in the way it assesses treatments sustainable.

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Priority setting: managing new treatments

Figure 4: Two possible outcomes for agreeing to treatments above the cost-effectiveness threshold

Scenario 1
COST
X X X X X

Scenario 2
COST
X X X X X X X X X X X X X X X X X

LD HO S RE TH

LD HO S RE TH

BENEFIT

BENEFIT

Does rarity qualify as an exceptional circumstance?


Most of the treatments that are very expensive belong to the orphan drugs group, although not all orphan drugs are very expensive. Orphan drugs are treatments that have been developed for rare disorders and which have been given special privileges related to licensing. The policy question these treatments raise is whether or not the NHS should pay a premium for rarity. There is no consensus on this issue. There are many who believe rarity should not be considered as a separate issue. Both the Scottish Medicines Consortium (SMC) and the All Wales Medicine Strategy Group (AWMSG) have taken the step of giving rarity some special consideration, although neither body provides an ethical framework or rationale for having done so. The SMC3 allows additional considerations for orphan conditions (fewer than five affected individuals per 10,000

population) and the AWMSG4 for ultra-orphan conditions (one affected individual per 50,000 population). In both cases, additional consideration is given to the following factors: the degree of severity of the untreated disease in terms of quality of life and survival; whether the drug can reverse rather than stabilise the condition; overall budget impact; whether the drug may bridge a gap to a definitive therapy; and that such a definitive therapy is currently in development. The SMC also requires information on possible extensions to use. An illustration of the some of the ethical dilemmas that treating rarity different might create can be found in Figure 5 opposite. Another issue raised by high-cost drugs is whether or not there is a limit to the amount society is willing to pay to improve the health outcome for one individual. Ultra-orphan drugs, for example, can cost 350,000 per patient per year. Treating a

Priority setting: managing new treatments

13

patient for ten years would cost 3.5 million and some patients are expected to be on treatment for life. There are now a number of treatments that require the NHS to commit millions of pounds for the healthcare of one individual. This is compared with the average spend on healthcare of 80,000 per person over the course of 75 years, with the majority of people using about 40,000 (based on 2002/03 prices)5. The question that has to be asked is not whether a person is worth this amount of

money but can this level of expenditure be justified within a healthcare system subject to finite resources? There is no emerging consensus view on these questions, so PCTs are going to have to come to a view themselves. Given the potential to set major precedent when making decisions in this area, caution is advised for agreeing funding treatments above the threshold.

Figure 5: Possible ethical dilemmas presented by consideration of rarity


Example 1: Drug 1 improves the quality of life for patients with a common disorder. Drug 2 does the same job but for patients with a rare disorder. Drug 1 is cost effective but because of higher pricing drug 2 is not. Is it fair to discriminate against patients treated by drug 2 just because they have a rare condition? Example 2: Drug 1 improves the quality of life for patients with a common disorder. Drug 2 does the same job for patients with a rare disorder. Both treatments fall above the cost-effectiveness threshold. Are there any grounds for agreeing to fund drug 2 just because the treatment is for a rare condition? Example 3: Increasingly, new rare conditions are being identified. These are subgroups of patients with variants of more common conditions. Drug 1 improves the quality of life for patients with a common disorder X. Drug 2 does the same job but for only a small subgroup of patients who have a rare genetic variant of a common disorder. Both treatments fall above the cost-effectiveness threshold. Are there any grounds for agreeing to fund drug 2 just because the treatment is for a rare genetic variant of a common disorder? Example 4: Drug 1 is developed for a rare disorder. Its price is set high, which puts it above the threshold. Funding has been agreed because rarity has been granted special favour. The treatment is then becomes licensed for a common condition. Are there any grounds for denying treatment for patients with a common disorder (the price is rarely reset)? What impact does this have on other patients with common disorders whose treatments have not been funded because they are not cost effective?

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Priority setting: managing new treatments

Treatments that lie below the cost-effectiveness threshold


It is assumed that treatments that fall below the threshold should be automatically funded. This is not necessarily the case. It is possible, because of how a QALY is measured, for a treatment to have a cost per QALY that is below the threshold without offering valued health benefit. Unfortunately, neither the NHS nor PCTs have defined the minimum health gain that is of interest within any health programme area. However, there are many treatments that are currently supported by NICE on cost-effectiveness grounds that PCTs would reject on grounds that they provide insufficient value health benefits. For example, a PCT would not wish to invest in a cancer drug that extends life by six weeks when local palliative care services still required investment. Pricing issues are also relevant for treatments below the threshold. It is possible, because of the way in which drugs are priced, to have a group of drugs all of which do roughly the same thing but which are priced differently. This does not seem a defensible position in a publicly funded system. The NHS is facing a new challenge. There is an increasing number of treatments for common disorders that offer valued health gain and are considered cost effective but which are relatively expensive. If provided to all patients, the opportunity costs are so high that they are deemed unaffordable. The NHS has not yet worked out how to approach these drugs.

The role of R&D in commissioning


It has already been mentioned that PCTs might wish to fund research into experimental drugs. However, PCTs might also fund clinical research by providing a new treatment under ongoing evaluation. Again, this has to be carried out in a robust manner and it is likely that PCTs will need to collaborate in order to fund a large enough study. The circumstances in which they might like to do this include: where the evidence available at the time of licensing suggests that further research is needed to establish a treatments true place in management or its cost effectiveness where there is potential for sizeable variation in clinical practice (often known as clinical creep) which would be difficult to control but which might lead to less cost-effective practice where it is not know how best to deliver the treatment (for example, frequency of treatment) where a treatment is considered valuable but unaffordable, such that cheaper alternative solutions have to be explored (for example, treatment doses or intervals).

It is possible to have a group of drugs that do roughly the same thing but are priced differently.

Priority setting: managing new treatments

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In summary
Figure 6 provides a quick summary of some of the key decision points for assessing new treatments.

Figure 6: Quick-reference decision tree for new treatments


Assess whether there is sufficient evidence to assess the treatment If not, then the PCTs policy on experimental treatments is engaged

Assess whether the treatment If not, then is likely to deliver valued health outcomes

a long-term exclusion policy is drawn up

Assess whether the treatment If not, then represents value for money / is cost effective

the PCTs policy on treatments above the cost-effectiveness threshold is engaged

Assess a range of factors needed for prioritisation

If new policy issues arise, then

a piece of work is undertaken that looks at these issues before proceeding

Prioritise and make funding decisions

If good but unaffordable, then If good but not affordable this year, then

the PCTs policy on R&D funding is considered

the treatment is not funded and is logged onto the bring-forward system to be reconsidered next year

If low priority

a long-term exclusion policy is drawn up

Funded

If high priority

funding is agreed and a commissioning policy drawn up specifying what will be funded.

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Priority setting: managing new treatments

Rationalising the assessment of treatments


Many PCTs do not have the capacity within their organisation to carry out all the necessary assessments of treatments and services. However, this would not matter if there were greater sharing of expertise across PCTs to pool information and minimise duplication of efforts. There are aspects of assessing treatments that only need to be done once across the whole of the NHS. PCTs should give consideration as to how they can collaborate to develop efficient networks to ensure a continuous supply of high-quality assessments.

PCTs often need to assess whether current clinical practice has drifted from licensed clinical practice.

Disinvestment
This report has focused on new treatments. However, PCTs also need to review what is currently provided. Disinvestment does not have to mean stopping a treatment altogether. It can mean stopping treatment to groups of patients that benefit less or changing the threshold for treatment. The process for assessing existing treatments is similar to that for new treatments, with one exception. An additional exercise is often needed to assess to what extent clinical practice has drifted from licensed practice.

Priority setting: managing new treatments

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Commissioning policies
One of the key rules of priority setting is good documentation. Commissioning policies are part of the essential documentation that supports priority setting. They provide an explicit statement of what the PCT will and will not provide. They also facilitate consistent and efficient decision making. It is as important to develop commissioning policies for treatments that the PCT actively supports as it is for those that it wishes to restrict. Such policies are also useful to help shape a number of aspects of provision. In developing a commissioning policy, the following components are worth considering: What, if anything, is to be provided? What are the access criteria? Are there specific exclusions? What controls are wanted? How can these be specified? For example, does the PCT want the treatment offered only by a nominated provider or clinician? What information does the PCT want and is its provision going to be a condition of funding? Does the PCT want to check compliance or monitor spending? If so, then a prior-approval process is required What exceptionality criteria operate? (It is also always worth reiterating the PCTs general policy on exceptionality and management of individual funding requests within a specific commissioning policy.) Who can make which decisions? Delegated functions need to be specified. All policies must be ratified by the board of the PCT.

Key pitfalls to avoid when developing commissioning policies


Dont buy a little bit just in order to avoid saying no. Clinical creep always happens and it is difficult to control. If a PCT does not wish to fund a treatment then it should say so in a policy document and not adopt case-by-case decision making through the individual funding request route. This latter approach is fraught with problems (this will be dealt with in greater detail in the Confederation publication, Priority setting: managing individual funding requests). Do not adopt a commissioning policy that does not match resources (for example, 100 cases are funded when the PCT knows 200 cases are expected). If a policy cannot be afforded then restrict access criteria or dont fund at all. This situation needs to be differentiated from those in which there is planned growth (for example, renal dialysis).

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Priority setting: managing new treatments

Key action points


Key action points
Step 1: Agree key principles to underpin priority setting Agree an overall approach to service developments. Adopt a clear definition of a service development. Agree the criteria for agreeing unplanned in-year funding. Agree how the PCT will manage treatments that fall above or below the cost-effectiveness threshold. Step 2: Develop and establish priority-setting structures and processes Agree and document the process for screening new treatments for exceptionality for in-year funding. Document any delegated authority. Develop more efficient means to assess new treatments do once only where appropriate by co-operating with other PCTs. If outsourcing assessment, be very clear what is wanted and ensure each product is fit for purpose. Agree the status of recommendations coming from various bodies related to the PCT, such as clinical networks. It is also worth documenting how the PCT regards statements and documents endorsed by the royal colleges. Give careful regard to how the different stages of decision making will be documented. Agree what decisions have to go through the board. Ensure that there are bring-forward mechanisms for good treatments that are not funded in any given year. Step 3: Consider how to approach key relationships Set out a strategy for informing and educating key stakeholders about the PCTs approach to priority setting. Ensure that local provider trusts understand the definition of a service development and how the PCT will manage new treatments. In particular, providers should understand what is expected of them in relation to managing new treatments. Consider adding how new treatments will be managed to contracts with providers. Be explicit and provide clear and honest communication with clinicians and patients. Step 4: Produce key policy documents The overarching policy document on resource allocation should include the PCTs approach to new treatments. The PCT should routinely produce treatment-specific commissioning policy documents. These can be interim policies. See Priority setting: an overview for a description of the steps.

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The author
Dr Daphne Austin BSc MBChB FFPHM Dr Daphne Austin is a consultant in public health currently working for the West Midlands Specialised Commissioning Team. Dr Austin has an extensive background in public health, spanning 17 years. Dr Austin established the UK Commissioning Public Health Network, which she currently chairs.

Acknowledgements
This series has emerged from the ESRC-funded series on managing scarcity in healthcare, run by Professor Cam Donaldson. It has been funded by a grant from the NHS Institute for Innovation and Improvement. The author and the NHS Confederation would like to thank the following people for their input and involvement with this series of publications: Professor Cam Donaldson and the UK Forum for Priority Setting in Healthcare Professor Chris Newdick Claire Cheong-Leen Dr Henrietta Ewart

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Priority setting: managing new treatments

Glossary
Opportunity costs arise from alternative opportunities that are foregone in making one choice over another. Affordability the ability to do something without incurring financial risk or unacceptable opportunity costs. It is ultimately determined by the fixed budget of the PCT. Service development a catch-all phrase referring to anything that needs investment. It refers to all new developments including: new services; new treatments, including drugs; changes to treatment protocols that have cost implications; changes to treatment thresholds; and quality improvements, such as reduced waiting times. It also refers to other types of investment that existing services might need, such as pump priming to establish new models of care, training to meet anticipated manpower shortages and implementing legal reforms. Service disinvestment the mirror image of service developments. The overarching policy document on resource allocation the document that sets out a PCTs approach to resource allocation, which may be supplemented by more detailed policy documents and protocols. This document and any associated documents should comprehensively set out key principles, policies, protocols and any scheme of delegation for decision making.

References
1. Dr Daphne Austin. 2007. Priority setting: an overview. NHS Confederation. 2. National Institute for Health and Clinical Excellence. 2004. Guide to the methods of technology appraisal. www.nice.org.uk/page.aspx?o=201974 3. Scottish Medicines Consortium. 2007. Statement on medicines for orphan diseases. www.scottishmedicines.org.uk/smc/3863.21.24.html 4. All Wales Medicine Strategy Group. 2007. Policy on ultra-orphan drugs. www.wales.nhs.uk/sites3/ docmetadata.cfm?orgid=371&id=81655 5. The Office of Health Economics. 2002/03. The economics of health care: estimated HCHS per capita expenditure by age group, England 2002/03. www.oheschools.org/ohech6pg7.html

Priority setting: managing new treatments


This report is the second in a series of publications that aims to help organisations review their current priority-setting processes and, if needed, provide a reference document for PCTs who still have to develop a comprehensive priority-setting framework. Also available in this series: Priority setting: an overview. It is hoped that this series will also promote understanding and debate amongst a wider audience, particularly providers of healthcare who have always undertaken prioritisation at patient and service level, albeit less explicitly.

Further copies can be obtained from: NHS Confederation Publications Tel 0870 444 5841 Fax 0870 444 5842 Email publications@nhsconfed.org or visit www.nhsconfed.org/publications
The NHS Confederation 2008 This document may not be reproduced in whole or in part without permission

The NHS Confederation 29 Bressenden Place London SW1E 5DD Tel 020 7074 3200 Fax 0870 487 1555 Email enquiries@nhsconfed.org www.nhsconfed.org
Registered Charity no: 1090329

15
ISBN 978-1-85947-147-0 BOK 59301

Priority setting: strategic planning

Supported by:

The voice of NHS leadership


The NHS Confederation is the independent membership body for the full range of organisations that make up the modern NHS. We help our members improve patient care and public health, by: influencing policy, implementation and the public debate supporting leaders through networking, sharing information and learning promoting excellence in employment. The Primary Care Trust Network is part of the NHS Confederation. For further details of the Primary Care Trust Network, please visit www.nhsconfed.org/pctnetwork or contact David Stout on 020 7074 3322 or at david.stout@nhsconfed.org

The NHS Confederation 29 Bressenden Place London SW1E 5DD Tel 020 7074 3200 Fax 0870 487 1555 Email enquiries@nhsconfed.org www.nhsconfed.org Registered Charity no. 1090329 Published by the NHS Confederation The NHS Confederation 2008 This document may not be reproduced in whole or in part without permission. ISBN 978-1-85947-153-1 BOK 59801 This publication has been manufactured using paper produced under the FSC Chain of Custody. It is printed using vegetable-based inks and low VOC processes by a printer employing the ISO14001 environmental accreditation.

Contents
Introduction How to break down decision making Strategic planning The annual commissioning round Other tools to aid decision making Resources Conclusion and key action points The author Acknowledgments References Glossary 2 3 5 10 12 18 19 20 21 22 23

02

Priority setting: strategic planning

Introduction
For primary care trusts (PCTs) the most important priority setting is done at the strategic level. It is here that the major decisions shaping local healthcare services are taken. This is done through the development of strategic plans which are then translated incrementally through serial resource allocation decisions. Strategic planning involves priority setting because it determines which healthcare needs will be met and which will not. Developing an implementation plan involves priority setting because it determines when needs will be met. Priority setting is as old as the NHS itself. It is surprising, therefore, that priority setting at these levels is most in need of development. It could be argued that the focus on health technology assessment has been to the detriment of the development of other tools. As a result, many challenges remain. These include: how to best manage a large number of decisions how to construct all decision making to ensure that the primacy of prioritisation is maintained (see the previous report in this series, Priority setting: an overview) how to fairly and efficiently compare very different sorts of interventions how to ensure that investments reflect priorities how to fully engage the wider NHS and the public and in doing so secure the trust of the local community. To meet these challenges PCTs will need to network with fellow PCTs and other partner organisations, including academic institutions, to develop understanding, tools and skills. Particularly important is the need to verbalise, capture and therefore give full account of the decisions PCTs currently make and how these are shaped by their unique perspective and responsibilities (for example: knowledge of opportunity costs, legal duties to provide comprehensive healthcare and being a budget holder). While this report acknowledges the developmental nature of priority setting at the strategic level, it sets out some well recognised considerations for the planning cycle and presents some tools which may be useful for PCTs to adopt and adapt.

For PCTs the most important priority setting is done at the strategic level. It is here that the major decisions shaping local healthcare services are taken.

Priority setting: strategic planning

03

How to break down decision making


Many commissioners have been faced with the task of prioritising 30 out of 250 individual service developments. This is not made any easier when large numbers of these developments arise from provider trusts without reference to strategic plans. While this might represent an extreme case it raises the issue of how to cut or group decision making in order to make it more manageable and in a way which is meaningful. Priority setting has to be done in stages and the PCT, together with key partners, needs to give consideration to the building blocks that will be used. Decision making can be grouped into programmes which can relate to disease areas (for example, cancer), specific diseases (for example, breast cancer), health problems (for example, hearing loss), patient/client groups (for example, the elderly) or a combination of these. When considering these programme areas two guiding principles are helpful: 1. Priority setting should, as a minimum, consider interventions related to programme goals across an entire patient pathway (see Figure 1). 2. The first and most detailed consideration of priorities should be undertaken by a group of individuals who are familiar with the area of interest. Considering priorities within the context of the patient pathway is very important. For example, when a new cancer drug comes along, the key question which has to be answered is whether this drug is really the next most important investment. It is self-evident that many of the interventions for protecting good health and managing long-term conditions fall outside the remit of services traditionally provided by the NHS. Strategic planning cannot, therefore, be done in isolation. The Local Government and Public Involvement in Health Act of 2007 ensures that joint strategic planning occurs between health and local government authorities, which between them share the responsibility for the health and well-being of the populations they serve.2 As well as requiring closer collaboration on shared goals, this legislation also aims to realign the NHS towards preventing poor health in future generations.

Figure 1. Minimum range of objectives to be built into any programme area


Diagnosing ill health Adjusting to chronic disability

Protecting good health

Restoring health

Easing the passing

Source: Dr Peter Brambleby 1

04

Priority setting: strategic planning

Priority setting results, therefore, from a complex set of interrelated groups of decisions, all aimed at identifying: What are the areas/issues to focus on? What are the needs and priorities of each particular service, patient group, condition?

What is the next investment/disinvestment? Figure 2 gives an example of how a series of decisions might contribute to overall priority setting.

Figure 2. Possible relationships between priority setting at different levels


Top-down Major organisational goals are set

Major priority areas on which the organisation(s) will focus attention are decided

+/- budgets are set for programme areas

Decisions between competing needs from different programme areas are agreed

Strategic planning occurs at a programme level priority areas for investment and disinvestment are identified

Providers identify their own priorities that may or may not relate to strategic plans Bottom-up

Strategic plan implemented incrementally, supported by resource allocation decisions some of which may require additional investment over budget. If so, they need to compete with other programmes for additional resources to be added to the programmes budget

Another programme area does the same

Priority setting: strategic planning

05

Strategic planning
Healthcare needs
Healthcare needs and their assessment were first fully described by Stevens.3 A healthcare need is a health problem that would benefit from a known effective intervention. The term intervention should not be restricted to the type of service provided by the NHS. This is particularly so in relation to primary prevention, where the intervention is aimed at preventing a health problem. The epidemiological this gives a picture of the condition of interest and potential interventions. The comparative this gives a picture of the existing services and interventions, comparing them with established standards or what is available to other populations. It also includes a strategic analysis of service issues and trends and identification of current spends and contracts used to commission those services. The corporate this provides the views of stakeholders. One objective of this exercise is to map out the relationships between need, demand and supply (also described by Stevens). Figure 3 shows the potential relationships that might exist. Every segment of the Venn diagram is of significance. Strategic plans should be designed to better align these elements.

Healthcare needs assessment


Healthcare needs assessment (HNA)4 is the process by which the need for services and other interventions are fully assessed. It is a vital analysis which underpins any strategic plan. It is comprised of three elements:

Figure 3. Need, demand and supply of healthcare


Zone E represents unmet need that is not expressed for whatever reason (not recognised, neglected or not demanded).

E
Need

A B C

Demand

The overlap between need and demand represents healthcare needs that are expressed. Zone B represents need which is met while Zone A represents need that is not. Zone D represents services that are provided to meet a demand but do not meet a healthcare need. A classic example is prescribing antibiotics for a cold.

D
Supply

Zone C represents a service that meets a legitimate need but is one which is not wanted or valued by patients. An example is a terminally ill patient being treated in an acute hospital setting.

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Priority setting: strategic planning

The outcome of a healthcare needs assessment should include: an understanding of the nature and size of the health problem and the current and future need for intervention and services a hierarchy of interventions arranged in terms of their ability to produce health gain and the costs incurred in doing so an understanding of the service currently being provided and an assessment of its quality a view on what a model service would look like and what changes and developments are potentially achievable in the short, medium, and long terms locally an analysis of constraints (for example, manpower shortages) and analysis of potential obstacles to implementation (for example, lack of commitment by a key organisation) minimum and target quality standards that might be introduced an understanding of the current spend and preliminary costs for key service developments and potential sources for releasing cash (for example, providing services more efficiently, service redesign, disinvestment) identification of any procurement/contracting issues.

Involving stakeholders
The local authority will have been involved in the joint strategic needs assessment. Depending on how the programme areas have been developed, wider stakeholder engagement will have occurred, to a greater or lesser extent, through the healthcare needs assessment process itself. Wider involvement in developing strategies (and therefore setting priorities) is important for many reasons, not least of which is that a better strategy is likely to result from having a richer experience and wider range of perspectives on which to draw. Other reasons for widening involvement are to build relationships, consensus and legitimacy. PCTs need to carefully consider what structures they might need to help with strategy development at the programme level and how to involve the key perspectives: users, professionals, managers who run services, public health, the commissioning team, and other key agencies. Ideally, each programme area should have a supporting planning forum, chaired by a senior individual from either the PCT or the local authority. However, establishing and maintaining all the groups that are needed is an impossible task for any PCT at present and so a phased approach will need to be taken. Unfortunately, public policy over the last 20 years has not delivered structures which bring together the key stakeholders in the right balance. In particular, PCTs have inherited a number of clinical networks established over the last ten years, and there is considerable confusion over the role of many of these. Functionally, there are three types of networks, listed on page 8.

Translating the healthcare needs assessment into a strategic plan


Once the information from a healthcare needs assessment is available, it needs to be translated into a strategic plan that maps out the desired shape of future services and the changes needed to deliver them. An indication of the order in which this should be implemented should also be included.

Priority setting: strategic planning

07

Healthcare needs assessment summary


Epidemiological assessment define the condition of interest describe the epidemiology incidence, prevalence, changes in incidence and prevalence (over time, place and person), associated mortality and morbidity establish which healthcare interventions are effective (primary, secondary and tertiary preventions) and their associated costs, including identification of patient subgroups for which treatments have differential benefits; and establish whether or not interventions are effective in all healthcare settings and subpopulations which experience higher prevalence of the condition of interest or its risk factors undertake a value for money assessment which should cover both cost-minimisation and cost-effectiveness wherever possible understand healthcare trends for this area (for example, emerging technologies, specialisation and skill-mix issues). Comparative assessment identify national, professional and locally developed standards, guidelines, commissioning policies and specifications describe the services and interventions that are being provided: 5 structures/inputs: service configuration manpower, including skill-mix buildings equipment financial costs processes: activity referral patterns relationships between different services, including the patient pathway professional practice user perceptions outcomes: health outcomes assess relationships between need, supply and demand compare with other areas services and interventions (access rates, quality and outcomes) look at existing contracts. Corporate assessment check findings from the above two stages gain views from key stakeholders understand how providers and users want the service to develop and their priorities identify potential limitations and blocks to implementing healthcare strategies assess the major forces shaping the service, including technological developments, manpower trends and health policy.

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Priority setting: strategic planning

Professional networks Generally, these are informal networks of professionals who share the same interest, and often comprise of individuals coming from the same discipline. They are largely educational and support networks. Clinical networks These are more formal multi-disciplinary networks primarily, but not exclusively, comprised of healthcare professionals working across a patient pathway for a service area. They largely have an operational focus, concentrating on quality and ensuring that patients move between different parts of the service. A clinical network can be a subgroup of a strategic network. Strategic networks These are formal planning groups of the PCT or joint planning groups of the PCT and local authority. They are multi-disciplinary and multi-agency groups. Strategic networks should have responsibility for undertaking priority setting within a programme area. In the future it is both likely and desirable that they will also have some responsibility for the total budget for that programme. Problems currently exist in a number of areas where a clinical network has been given or adopted a strategic function without sufficient accountability to local PCTs. Patient and public involvement and the role of overview and scrutiny committees is a major area in itself and is not covered in this report. However, it is worth reiterating that the roles of the citizen and user should not be confused it is the citizens voice that is needed for high-level decision making. Users and carers should help shape priorities for the services they use. This also follows the principle of involving those who have detailed knowledge of an area involved in the early stages of priority setting.

Moving towards fair, open and fully informed priority setting


The capacity of the NHS to undertake fair and informed decision making requires a seismic shift in public, professional and political knowledge, understanding, attitudes and behaviours. Such change cannot be achieved by a one-off exercise or in one or two years but requires commitment to a long-term strategy at both local and national levels. PCTs are encouraged to consider approaching priority setting in the same way they would a major public health programme. At least two of the three main strategies described by the World Health Organisation6 can be adapted as follows: Enabling providing information and educating individuals and groups, and wide engagement in decision making. Advocacy combining individual and organisational actions to gain political commitment, policy support, social acceptance and systems support for fair and fully informed priority setting. This can involve activities such as lobbying, active engagement of the media and public debate.

Translating the strategic plan into a prioritised implementation plan


Having developed a strategic plan the PCT must then ensure that the annual investment decisions it takes reflect stated priorities. Because of external demands this can be a greater challenge than might be expected.

Priority setting: strategic planning

09

The annual commissioning round


In most PCTs investment decisions are made during the annual commissioning round. This often involves prioritising not only those developments that are linked to national and local strategies but frequently also lists of bids from provider organisations. The process currently rarely looks at disinvestment. As a result there is a question over whether or not the annual commissioning round, as currently constructed, is adequately meeting either the needs of the PCT or the requirements of fair priority setting. The answer may be that it does not and something different needs to take its place. There have been some initiatives which have attempted to address, at least in part, this issue. Any solution must address four key problems: the constant diversion of funds to treatments which are of low priority but which have become politically hot issues the failure of the health economy and local communities to be sufficiently aware of or take into account opportunity costs the failure to address disinvestment clinical and public engagement. It is not possible to cover the subject in detail here but a few important features are highlighted below. Programme budgeting refers to the task of breaking down what is currently spent into programme areas, with a view to tracking future expenditure in each programme area, in order to meet agreed programme objectives. Marginal analysis refers to an assessment of the added costs and added benefits when the resources in programmes are deployed in new ways. This represents not an accounting method but a new way of thinking. In particular, it requires decisions to be taken with reference to a set of clear programme objectives. It also supports the principle that potential new investments are prioritised, in the first instance, within the programme area i.e. assessed against that which is already being provided. Redeployment of resources is integral to the thinking of this methodology. The current popularist framing of funding decisions in terms of Does this work? and Is it good value for money? fails to answer the key questions in relation to resource allocation. This series of reports to date has suggested that other factors need to be taken into account when assessing interventions. But even these do not go far enough. What is needed is a complete change in thinking. Ruta et al argue that priority setting must also consider five key questions which relate to public expenditure in the NHS: 1. What are the total resources available? 2. On which services are these resources currently spent? 3. Which services are candidates for receiving more or new resources (and what are the costs and potential benefits of putting resources into such growth areas)?

Programme budgeting and marginal analysis 7, 8, 9, 10, 11


A recent development has been the adaptation and promotion of programme budgeting and marginal analysis (PBMA) by the Department of Health. This is a long-established tool for decision making which has only recently been applied to healthcare. It could be considered the most important development within priority setting. Crucially, it has the potential to address all of the four problems identified above.

10

Priority setting: strategic planning

4. Can any existing services be provided as effectively but with fewer resources, so releasing resources to fund items on the growth list? 5. If some growth areas still cannot be funded, are there any services that should receive fewer resources, or even be stopped, because greater benefits would be reached by funding the growth options as opposed to the existing service? This approach is relevant for priority setting at any level, both in provider and commissioning organisations. So this tool can, for example, be used to increase efficiency and focus resources optimally within a providers departmental budget. The major constraint in being able to answer these five questions is the lack of information on how existing budgets are spent. This should improve the more the tool is adopted within the NHS. Currently, NHS decision making is often not constructed to fully address all five of the above

questions. Strategic planning (or goal setting for a programme area) helps to answer question 3 and, in part, question 2. It does not, however, compare funding with other programme areas. Programme budgeting, however, aims to answer the first two questions and marginal analysis the remaining three. The relationship between HNA and PBMA is an interesting one. Set in the context of PBMA, there should be greater emphasis on identifying areas for disinvestment and increasing efficiency. The emerging strategic plan should also be set within any financial constraints defined by the programme budget. Practically, PBMA can also operate in the absence of a strategy. Here the focus is on identifying more limited short-term goals or dealing with specific funding issues. Priority setting using this approach re-emphasises the inappropriateness of singular decision making, as discussed in Priority setting: an overview.

Moving from reactive to proactive commissioning


Three years ago Birmingham East and North PCT planned to move to commissioning that was driven only by its own strategies and delivered by a continuous planning cycle. As a result, the PCT has moved away from the annual commissioning round as the main process for priority setting and decision making. Instead, this is the period of time when planning for priorities set at least one year earlier are crystallised and agreed. Critically, unsolicited bids from providers are no longer considered during the annual commissioning round. Instead, all investment proposals go through a gateway system to ensure they fit with the goals and commissioning strategy of the PCT, as well as a value for money assessment.
Source: Andrew Donald, Birmingham East and North PCT

Priority setting: strategic planning

11

Other tools to aid decision making


Paired comparison analysis 12, 13
Paired comparison analysis (PCA) is a wellestablished tool for decision making which requires the ranking or prioritisation of options. Its main limitation is in the number of choices that can be compared ideally, this should be no more than ten and preferably less. If used properly, it can be an efficient way of reaching consensus when decision making has stalled. An essential requirement of paired comparison analysis is that everyone taking part in the exercise is very familiar with the subject area because they need to be able to make mental trade-offs quickly. The methodology involves each individual within the group making a series of paired choices where every option is compared to another. Usually, the decision-maker has to quickly decide which of the two options they prefer. The preferences are then scored and the group score added up (see Figure 4 for how rankings are obtained). There are variants of this method which involve making the choice against pre-agreed criteria or introducing weightings. As with all tools, the outputs are meant to be an aid to decision making, not a substitute for it. Having undertaken the exercise and got a cumulative score for the group the stakeholders come together to discuss the ranking and negotiate, if necessary, any changes. These might be expected to be only minor in the example shown in Figure 4 the group might decide to reverse the rankings of options 2 and 3. It is critical when undertaking this exercise to ensure that the balance of representation from the stakeholder is correct, because each individuals score adds to the total. Although the number of choices should generally be kept small, this tool has been successfully used to help priority setting at the strategic level for palliative care services. This was to break a deadlock in agreeing the emphasis to be given to developing key elements of the service (i.e. increase consultant numbers, beds, hospice at home, training etc.) Unusually, the exercise involved 20 options an afternoons work compared to the ten or 15 minutes it would normally take. The results were, as is often the case, surprising but when the group came together there was no dissent.

Figure 4. Results of a paired comparison exercise


Stakeholder A Option 1 versus Option 2 Option 1 versus Option 3 Option 1 versus Option 4 Option 2 versus Option 3 Option 2 versus Option 4 Option 3 versus Option 4 1 3 1 3 2 3 Stakeholder B 2 1 1 2 2 3 Stakeholder C 1 1 1 3 2 3

Scores: Option 1 = 7, Option 2 = 5, Option 3 = 6, and Option 4 = 0 Priority rankings: Option 1 is the highest priority, then Option 3, then Option 2, and the lowest priority is Option 4.

12

Priority setting: strategic planning

Scoring systems
Many organisations have developed systems for comparing service developments and virtually all of them use a scoring system. A scoring system aims to assess priorities against an agreed set of factors. Those most commonly used include: the nature of the health gain confidence in the clinical evidence the number of individuals benefiting cost-effectiveness/value for money the need to redress inequalities and inequities of access accessibility

national priorities stated local priorities clinical risks service risks quality issues cost legislation and direction from the Secretary of State patient choice. Factors are often weighted. So, factors considered most important may be given the maximum score of 100 while those of less significance only five or ten. A greater level of sophistication can be

Figure 5. The original Portsmouth Scorecard


PORTSMOUTH CITY PRIMARY CARE TRUST BALANCED SCORECARD
Group One Strength o f Evid ence Magnitude of Benefit N u m b e r w h o B e n e fi t Total Cost Pat ient C hoi ce G r oup Tw o HIMP/NSF Priority Hl t h I ne q/ S e rv I n e q Wider Benefits to Publ ic Only Rx or Alternative G ro u p Th r e e Public pr of ile NONE NIL N IL N ONE S E V E RA L NO ( S t re n g t h ) G r ou p O n e MA Y B E ( S t re n g t h ) Y E S 100%Sx 1000 100,000 Medium Group Tw o TWO TWO S OME TW O G ro u p Th r e e HIGH HUG E FOUR FOUR LO TS NO N E Cur e 10,000 1 High Group One out of 40 out of 40 out of 40 out of 40 out of 40 G rou p Tw o out of 20 out of 20 out of 20 out of 20 G ro u p Th re e out of 10

10% S x 10 500,000 Low

(Date of Analysis)

(Name of Service/Therapy/Treatment)

( S C OR E )
(Maximum of 290)

Priority setting: strategic planning

13

introduced if multipliers are used as this enables greater discrimination between interventions. So, for example, the scores for health gain, rather than being added to the score for number of individuals benefiting, is multiplied by the score. As with paired decision analysis those assessing interventions need to be familiar with the topic area. They also need to understand and apply the scoring system in the same way. One of the simplest scoring systems is the Portsmouth Scorecard, first developed by Dr Paul

Edmundson-Jones at Portsmouth City PCT. His original scorecard is shown in Figure 5. The Portsmouth Scorecard has been further developed by others. One such modification, overseen by Dr Khesh Sidhu, is summarised in the box below and illustrated in Figure 6. A key issue for all scorecards is how the scoring is weighted; another is how they are assessed. A welcome development would be making the measures for determining the scores for each factor increasingly objective.

Development and local adaptation of the Portsmouth Scorecard


A modified version of the Portsmouth Scorecard was used as a starting point for two further modifications for use in Sandwell PCTs annual commissioning round. The first, used in 2007/08 deliberations, involved changing the language for use in a practice-based commissioning (PBC) strategy meeting. This enabled doctors, nurses and practice managers to prioritise 11 options for their PBC strategy. Use of the scorecard led to a remarkable acceptance of the final ranks. A consistent approach in scoring was also confirmed during this process. The second modification, for use in the 2008/09 annual commissioning round, was designed to address one of the problems of all existing scorecards the relative weights for scores between the factors. To date, the weighting of the parameters had been relatively arbitrarily allocated. A two-stage Delphi exercise was undertaken which led to the version shown in Figure 6. A similar exercise will be run next year with the public to gauge their views on how the scorecard should be developed further. Another problem encountered in the 2007/08 was that the quality of the information on each option wasnt consistent. This risked important interventions being given low rankings because they could not be assessed fully. This issue has been addressed by establishing a submission process that requires planning to start in April and discourages submissions late in the year. There is no doubt that a measured logical approach to prioritisation has given Sandwell PCT and its practice-based commissioners a better understanding of local priorities. In addition, by engaging the public on how it compares submissions for funding, the PCT will in future be in a more defensible and robust position if its commissioning priorities are challenged.
Source: Dr Khesh Sidhu, Director of Clinical Services Development, Sandwell PCT

14

Priority setting: strategic planning

Figure 6. Sandwell PCTs modified Portsmouth Scorecard


Modified Portsmouth Scorecard Sandwell PCT WWB Cluster
Factor
Very Low
From your experience what is the st rength of evidence that the service produces an effect Under 3 points if still experimenta l , case series or opinion

Scale
Low
10 points

Score

Mid scale
2 0 p o i n t s if you ha ve mo de s t ev i d e n c e t h a t the service works 20 points if there are mo derate improvement in heal th or life e x p e c ta n c y 20 points if th ere are 10 - 49

High
30 points

Top points
4 0 p o i n t s if you definitely have experience that the service works

Magnitude of benefit

Un d e r 3 po i n t s i f negligible or no improvement in he alth or li fe e x p e c ta n c y

10 points

30 points

40 points if there are large improvement in health or life expectancy

Number of will benefit in your practice

Und er 3 poi nts i f less than one person in your practic e

10 p oi nt s

30 points there are 50 - 499

40 points if there are > 50 0 people in your practice who would benefit 40 points i f t h e c o s t is less than 50,000

Total cost of the development

U nder 3 poi nts i f t h e cost is more ,1000 ,00 0

10 points if th e cost is b etween ,1 000, 000 & 500,000

20 points if the cost is between 500,000 250,000

30 points there the cost is between 250,000 50,000

Patient acceptability

U nder 3 points i f patients would find it highl y un acceptable

10 po in ts i f patients would find it somewhat unacceptab le 10 points i f i t addresses one target or national requireme nt

20 points if patients would have no vi e w on acceptabili ty 20 points if it addresses two targets or na tional requiremen ts 10 points if i t part ial ly addresss an inequality or inequity

30 points i f p a ti e n t s wo uld f ind it somew hat acceptable 3 0 p oi nt s i f i t addresses three targets or national requ irements

40 points if p a t i e n ts would find it highly acceptable

N a ti o n al r eq u i r e me n t o r NH S target

U nder 3 points i f n o t a req uirement

40 points if it addresses 4 targets or national requirements

Addressing health inequality or health inequity ie where patients have not had service in the past

U n de r 3 p o in ts i f i t doesnt address an i nequali ty or inequity

5 points

15

20 points if it co m pl e t el y addresses an inequality or inequit y

Wider benefits to Society

Under 3 points i f none

5 points if some 10 points if 15 points if large benefit to society moderate benefit benefit to society to society 5 points if other options with better outcomes 10 points if other options but equivalent outcomes 15 points if limited options with poorer outcomes

2 0 p o i n t s if maj or benefit to society

Only treatment or alternative

Under 3 poi nts i f m any o t h e r treatments options with best outcomes

20 points if there are no treatment options at all

Strength of local feeling

0 points if no local interest in favour

5 points if some local interest

5 points if moderate local interest in favour

7 p o i n t s if large local interest in fa v o u r

10 points if massive local interest in favour

TOTAL SCORE

Source: Dr Khesh Sidhu, Director of Clinical Services Development, Sandwell PCT

Priority setting: strategic planning

15

Standardised business plans


Sandwell PCTs experience illustrates the problem of gathering all the relevant information on potential service developments needed to fully assess a developments priority. Most, if not all, PCTs have tried to address this at some time or other by establishing a standardised format for business cases or bids for service developments. Some have used online submission forms. It might be possible in the future to construct a computer programme which helps generate a scorecard, or part of a scorecard, from web-based submissions.

Live investment logs


Live investment logs have a number of useful functions in that they: are a simple method of documenting and tracking an organisations priorities and investment plans ensure valued developments that have failed to gain funding are not lost to the planning process enable rapid assessment of opportunity costs provide organisational memory.

Figure 7. Part of an investment log for a palliative care programme


Service element National priority Local Development ranking of element Ranking of service development within area 1 Ranking of Current service status development for coming year 1 Completed Business case completed and signed off by the PCT Business case requested from provider Dormant Planned Various timescale columns relating to financial planning Signed off 2006 2008 Details Details

Inpatient beds Inpatient beds

Yes Yes

1 1

Level 2 facility town A Level 2 facility town B

Inpatient beds Inpatient beds

Yes

Redesign of 2 local community hospital beds C Level 2 facility town C Increased capacity focusing on Zone X Increased capacity focusing on Zone Y 3 1

Not planned

2010

Await details

Yes

1 2

Not planned 2

2012 Await details

Increased Yes access to Marie Curie and night sitting Increased Yes access to Marie Curie and night sitting Etc

Preliminary case 2009 from provider, revisions requested. Dormant 2010

Not planned

16

Priority setting: strategic planning

They are best managed at a programme level, held and constantly updated by the programme lead, and can be set up in Excel. An example is shown in Figure 7. All the tools presented above are useful when addressing different aspects or problems of decision-making. As such, they complement each other. In addition, PBMA, paired comparison analysis and scoring systems can both be used to identify priorities for investment and areas for disinvestment.

The capacity of the NHS to undertake fair and informed decision making requires a seismic shift in knowledge, understanding, attitudes and behaviours.

Priority setting: strategic planning

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Resources
In the first report in this series, Priority setting: an overview, the need to consider the resources dedicated to priority setting was raised. Hopefully, the case for ensuring that the PCT has sufficient dedicated time and funds to support and develop this task has become apparent in the course of this series. Unfortunately, all too often responsibility for overseeing this function sits with the busiest people in an organisation. Priority setting should not be seen as an add-on but should command its own strategy, implementation plan and a dedicated team.

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Priority setting: strategic planning

Conclusion
Priority setting is a complex but important task. As resources become more scarce, and both need and demand increase, PCTs will have to develop the best systems they can in order to allocate resources fairly and to optimum effect. This report the last in the current series has covered some of the important principles in relation to priority setting at the strategic level. It is not, however, meant to be a comprehensive guide and there are some notable areas that have been not been covered, such as patient and public involvement, practice-based commissioning, working with local authorities, engaging with the media, strategies to influence the wider debate, disinvestment and the role of contracting in both delivering priorities and using resources most efficiently. It is hoped, nevertheless, that this series of reports has provided a useful guide for practitioners and introduced some key concepts. If you would like to comment on any of the issues raised in this series, please contact nigel.edwards@nhsconfed.org

Key action points


Step 2: Develop and establish priority setting structures and processes Ensure there is dedicated manpower resource and funds to support priority setting. Review networks and ensure that those involved in strategic planning are sub-committees of the PCT with clear terms of reference. Agree and define programme areas. Consider instituting programme budgeting and marginal analysis at some level. Step 3: Consider how to approach a range of issues related to key relationships Develop networks with other PCTs and key organisations which can help develop PCT priority setting. View engaging the local NHS and community as a long-term plan, gradually building understanding and capacity over a number of years. The process has to be sustainable. Develop a stronger national voice for PCTs. Step 4: Produce key policy documents Describe in the overarching policy document how strategic planning (including that undertaken with the local authority) and incremental investment decisions will be carried out. Step 5: Develop tools for decision making Experiment with and further develop existing tools and share results. See Priority setting: an overview for a description of the steps.

Priority setting: strategic planning

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The author
Dr Daphne Austin BSc MBChB FFPHM Dr Daphne Austin is a consultant in public health currently working for the West Midlands Specialised Commissioning Team. Dr Austin has an extensive background in public health, spanning 17 years. Dr Austin established the UK Commissioning Public Health Network, which she currently chairs.

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Priority setting: strategic planning

Acknowledgments
This series has emerged from the ESRC-funded series on managing scarcity in healthcare, run by Professor Cam Donaldson. It has been funded by a grant from the NHS Institute for Innovation and Improvement. The author and the NHS Confederation would like to thank the following people for their input and involvement with this series of publications: Professor Cam Donaldson and the UK Forum for Priority Setting in Healthcare Professor Christopher Newdick Claire Cheong-Leen Dr Henrietta Ewart The author would also like to thank Andrew Donald and Dr Khesh Sidhu for their contributions to this report.

Priority setting: strategic planning

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References
1 Programme budgeting and marginal analysis: a framework for health improvement, commissioning and accountability. Presentation by P. Brambleby, Birmingham, June 2007 2 Joint Strategic Needs Assessment, Department of Health, 2007 www.dh.gov.uk/en/Publications andstatistics/Publications/PublicationsPolicyAnd Guidance/DH_081097 3 Stevens, A. 1991: Needs assessment, Health Trends, 23:203 4 This section draws heavily on Cook, J., Austin, D. 1999: Commissioning in Williams A (ed), Patient care in neurology, pps 399416 5 For Donabedians seminal paper on quality read: Donabedian, A. 1966: Evaluating the Quality of Medical Care, Milbank Memorial Fund Quarterly: Health and Society, 44(3; pt. 2):166203 6 www.afro.who.int/healthpromotion/ strategies/html 7 Programme budgeting and marginal analysis: a framework for health improvement, commissioning and accountability. Presentation by P. Brambleby, Birmingham, June 2007 8 Brambleby, P., Fordham, R. 2003: What is PBMA?, What is, volume 4, number 2 9 Brambleby, P., Fordham, R. 2003: Implementing PBMA, What is, volume 4, number 3 10 Ruta, D., Mitton, C., Bate, A., Donaldson, C. 2005: Programme budgeting and marginal analysis: bridging the divide between doctors and managers, BMJ, 330: 150103 11 The National Programme Budgeting Project, Department of Health www.dh.gov.uk/en/ Managingyourorganisation/Financeandplanning/ Programmebudgeting/index.htm 12 McGuire, R. 2002: Decision making, The Pharmaceutical Journal, 269: 6479 13 www.mindtools.com/pages/article/ newTED_02.htm

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Priority setting: strategic planning

Glossary
Annual commissioning round the process by which new money coming into the NHS is allocated. The process has undergone many changes over the years but key elements of the process have remained unchanged. Funding decisions follow an annual cycle. Service developments are gathered and assessed during the autumn. Once PCTs are confident of the size of additional funding (usually known in December) priority setting intensifies. Final decisions have to be before the end of the year to ensure that new contracts can be placed with providers of healthcare for the new financial year which starts on 1 April. This annual process sits within a longer term strategic planning process. For the purposes of this series of publications this process will be known as the annual commissioning round. Healthcare needs assessment (HNA) the process by which the need for services and other interventions is fully assessed. It is a vital analysis which underpins any strategic plan. It is comprised of three elements: the epidemiological, the comparative and the corporate. Paired comparison analysis (PCA) a well-established tool for decision making which requires the ranking or prioritisation of options. If used properly, it can be an efficient way of reaching consensus when decision making has stalled. Programme budgeting and marginal analysis (PBMA) a long-established tool for decision making which could now be considered the most important development within priority setting. Redeployment of resources is integral to the thinking of this methodology. Service development a catch-all phrase referring to anything that needs investment. It refers to all new developments, including: new services; new treatments, including drugs; changes to treatment thresholds; and quality improvements, such as reduced waiting times. It also refers to other types of investments that existing services might need, such as pump-priming to establish new models of care, training to meet anticipated manpower shortages and implementing legal reforms.

The priority setting series


All reports in the series are available at www.nhsconfed.org/publications Priority setting: an overview Priority setting: managing new treatments Priority setting: managing individual funding requests

Priority setting: an overview

Priority setting: managing new treatments

Priority setting: managing individual funding requests

Supported by:

Supported by:

Supported by:

Priority setting: legal considerations

Priority setting: strategic planning

Priority setting: legal considerations

Priority setting: strategic planning

Supported by:

Supported by:

Priority setting: strategic planning


This report is the fifth and last in a series of publications that aims to help organisations review their current priority setting processes and, if needed, provide a reference document for PCTs who still have to develop a comprehensive priority setting framework. Previous titles in this series: Priority setting: an overview; Priority setting: managing new treatments, Priority setting: managing individual funding requests, and Priority setting: legal considerations. It is hoped that this series will also promote understanding and debate amongst a wider audience, particularly providers of healthcare who have always undertaken prioritisation at patient and service level, albeit less explicitly.

Further copies can be obtained from: NHS Confederation Publications Tel 0870 444 5841 Fax 0870 444 5842 Email publications@nhsconfed.org or visit www.nhsconfed.org/publications
The NHS Confederation 2008 This document may not be reproduced in whole or in part without permission

The NHS Confederation 29 Bressenden Place London SW1E 5DD Tel 020 7074 3200 Fax 0870 487 1555 Email enquiries@nhsconfed.org www.nhsconfed.org
Registered Charity no: 1090329

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ISBN 978-1-85947-153-1 BOK 59801

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