The proposed Funding Formula
for Public Health in Local
Authorities
Meic Goodyear
12 September 2012
Weighted Capitation since 1977-78
Health needs
Deprivation
Age-sex structure
Disability free
life expectancy
Population
Market
Forces
This covers
Hospital and
Community
Services
Prescribing
Primary Care
Commissioning
Management, including
Public Health
Come April 2013
Public Health England
(eg emergency planning)
Public Health
In NHS PCTs
Commissioning Board
Contraception through GPs
HIV treatment & care
Public Health in Local Authorities
PH advice and support to CCGs
JSNA
Sexual Health (contraception other than GPs,
STIs, Sexual Health promotion, HIV prevention)
Drugs treatment
Funding Proposals 1 – Feb 2012
DH: Baseline spending estimates for
the new NHS and Public Health
Commissioning Architecture
Ring fenced budget ~£2.2*109
Existing spend data collection
2010-11, raised for 2012-13
“We would not expect the LA public health ring-fenced grants to fall in
real terms from the values in Annex A, other than in exceptional
circumstances such as a gross error”
Funding Proposals 2 – June 2012
Advisory Committee on Resource Allocation (ACRA) proposes a
new formula for relative shares of the ring-fenced budget, which
ignores historical patterns of spend, effectively eliminating localism
from public health
Three components
Mandatory
services
Population
Weighted
by need
Non-mandatory
services
Population
Weighted
by need
Drugs services
commissioned
through DATs
Population
Weighted
by activity (76%)
and need (24%)
With a market forces factor (Area Cost Adjustment)
Needs component
One single indicator for all need
Standardised Mortality Ratios (SMR) age < 75
At Middle Super Output Area level
To be used for determining the relative sizes of shares
SMR– fitness for purpose?
• Indirect Standardisation – National rates applied to local
population
• Only valid for comparing local with national values
• Cannot be validly used for comparing localities as the
method has no means of controlling for differences in the
local populations
Possible valid alternative: Directly Standardised Rates,
but absolute numbers of premature deaths are small
at MSOA level, so DSRs might be unstable
SMR<75 – Relevance?
What does is say about:
- needs of the over 75 year olds?
- needs for contraceptive services?
- needs for STI services?
- needs for HIV prevention?
- anything else that does not contribute to
mortality?
SMR <75: MSOA level
These are calculated (by APHO) in 5-year averages.
Even then their 95% confidence intervals are very wide.
Here’s what they look like for one
Local Authority (Lewisham)
200
180
160
140
120
SMR<75 100
80
60
Average width of 95% CI: 48.2
40
20
0
Each column represents an MSOA, with SMR<75 and 95% Confidence Interval
Reason for the wide variability
Based on small number of events:
Average deaths per 5 year period per MSOA is 115
National average width of 95% CI is 44
(per David Spiegelhalter)
What they do with SMR<75
Divide the MSOA into tenths of SMR<75
(they misuse the word decile, which does not
engender confidence!)
Weight each tenth (weights range from 1 to
3) and apply the weights to the MSOA
population
Sum the weighted populations to get a Local
Authority weighted population.
Distribution of SMR<75 at MSOA level
SMR<75 by MSOA,
2006-2010 average,
England
120
100
80
Number of
60
MSOAs
40
20
0
0
50
100
150
SMR < 75
200
250
300
When we overlay them on the deciles…
120
Near the mean a small
change in SMR<75 can
result in an MSOA crossing
a decile and attracting a
different weighting.
100
80
Number
60
of MSOAs
Near the tails even a very
large change makes no
difference to the weighting
40
20
0
0
25
50
75
100
125
150
SMR <75
175
200
225
250
275
300
Year to year roll-forward
Can be thought of as repeatedly sampling
from a distribution of
mean = current SMR, SD = current SD
for each MSOA
Simulation a possibility, but not enough time.
Data update
• The data in the ACRA paper and
spreadsheet did not match the current
data on the APHO website. The website
was updated in March 2012, after the
ACRA work had commenced.
• Run the ACRA model against the updated
data and compare the results (the model
recalculated decile thresholds)
Effect of one-year roll-forward
Average size of Local Authority change =
+/- 1.1%
Maximum loss = 3.5%
Maximum gain = 7.1%
Number of MSOAs moving to a new weighting
Lower weighting
1365
Higher weighting
1384
unchanged
4032
Grand Total
6781
All from the play of chance, and each
likely to be reversed in future years
What the one-year roll-forward means for
Public Health Funding in the South East
South East Region % change 2005-9 to 2006-10
Bracknell Forest
Brighton and Hove
Buckinghamshire
East Sussex
Hampshire
Isle of Wight
Kent
Medway
Milton Keynes
Oxfordshire
Portsmouth
Reading
Slough
Southampton
Surrey
West Berkshire
West Sussex
Windsor and Maidenhead
Wokingham
-2%
-1%
0%
1%
2%
3%
4%
Local Health Inequalities (1)
• Consider Westminster (chosen as an
extreme case)
• Range of SMR<75 2005-09: 34.6 to 138.9
• Range of SMR<75 2006-10: 32.2 to 142.7
• i.e. health inequalities by this measure
increase between the two years
Local Health Inequalities (2)
When we group the MSOAs by tenths we get
tenth
year 1
year 2
1
7
9
2
5
4
3
2
1
4
2
4
5
3
1
7
1
1
8
2
2
9
2
2
24
24
Total
Average tenth for year 1 = 3.6
Average tenth for year 2 = 3.4
Local Health Inequalities(3)
•
•
•
•
So:
Health inequalities have worsened, but
Average weighting is lower
Overall weighting is the average for the
Borough.
Conclusions
• The proposed formula statistically misuses
its chosen measure
• The proposal will build instability into the
funding formula purely arising from the
inherent uncertainty in the measure
chosen
• The proposed formula will make no
contribution to reducing health inequalities
at the local level.
meicgoodyear@nhs.net