Select Committee on Health Memoranda


MEMORANDUM

Memorandum by the Department of Health

Table 2.1.5

HCHS COST WEIGHTED ACTIVITY INDEX


HCHS Cost Weighted Activity Index
Expenditure Adjusted for changes in input unit costs
Expenditure in real terms

Index 1987-88
= 100
% increase over
previous year
Index 1987-88
= 100
% increase over
previous year
Index 1987-88
= 100
% increase over
previous year

1987-88
100.0
100.0
100.0
1988-89
100.9
0.9
100.7
0.7
104.4
4.4
1989-90
103.1
2.2
102.5
1.7
105.6
1.1
1990-91
104.4
1.3
103.4
0.9
107.2
1.6
1991-92
109.9
5.2
106.1
2.6
113.9
6.2
1992-93
113.3
3.1
109.4
3.1
120.4
5.8
1993-94
117.8
4.0
111.2
1.6
122.9
2.1
1994-95
122.7
4.2
112.7
1.4
125.6
2.2
1995-96
127.6
4.0
114.7
1.8
129.4
3.0
1996-97
129.7
1.7
116.4
1.5
131.1
1.3
1997-98
132.0
1.8
119.0
2.2
133.0
1.5







2.2  PROGRAMME BUDGETS

Could the Department update the information on expenditure on Programme Budgets provided in Tables 2.2.1 and 2.2.2?

Introduction

  1.  The response to this question is in two parts. The first part deals with the programme budget for 1997-98 presented in the format presented two years ago. The Department feels that this format more accurately reflects expenditure by the NHS in the latest year for which data is available (see paras 3 to 11 below).

  2.  The second part deals with longer-term trends in expenditure within the programme budget. Unfortunately, due to major discontinuities in the data, figures for 1996-97 are not comparable with those in earlier years and trends are reported on the period 1991-92 to 1995-96 (see paras 12 to 17) and 1996-97 to 1997-98 (see paras 18 to 21).

HCHS Programme Budget: A "New" Method

  3.  Traditionally, detailed HCHS analysis has been carried out using provider data from directly managed units. Since trusts were created in 1991-92, provider data has become an increasingly poor proxy for healthcare commissioned by Health Authorities. The fundamental problem is that there are increasing differences between activity reported by Health Authorities and NHS providers. Figure 2.2.1 shows the relationship between the two sets of data.





  4.  As can be seen from figure 2.2.1. the common ground between Health Authorities and NHS providers is activity which has been both commissioned and provided by the NHS in England. The traditional presentation of HCHS expenditure blurs the distinction between Health Authorities and NHS providers by fitting the provider profile of expenditure to the Health Authority total of expenditure. An alternative method of constructing the programme budget information has, therefore, been devised. This programme budget aims to capture the most recent year's expenditure by Health Authorities and present that data in a more easily readable format. The results are shown in table 2.2.4.

  5.  There are major differences between the new HCHS programme budget format and the traditional format:

  (i)  The new format covers Health Authority expenditure regardless of whether it was provided by NHS or non-NHS providers. Conversely, private patients at NHS providers do not affect the figures.

  (ii)  The programmes are more logically structured and the presentation is easier to follow. For example, all general and acute expenditure on the elderly is presented as one programme, whereas previously the geriatric programme (ie care led by a consultant geriatrician) was frequently, and wrongly, taken to mean all general care for the elderly.

  (iii)  A clear distinction has been drawn between programmes of care (columns) and methods of care (rows).

Key Messages

  6.  A summary of key messages is shown below:

    —  HCHS expenditure rose by 4.0 per cent in 1997-98 to £23,820 million. This is equivalent to 2.2 per cent growth in volume terms (1) and 1.5 per cent in real terms.

    —  Nearly three quarters of HCHS expenditure is in the hospital sector, with the remainder being split between community (18 per cent) and other spending (9 per cent).

    —  The largest programme in both the hospital and community sectors is on G&A elderly patients, accounting for 40 per cent and 28 per cent of spend respectively.

    —  Proportionately, spending has remained broadly similar across the three years that the Department has been providing this analysis. The main exception is in "other" expenditure which has diminished each year.

  7.  Figures 2.2.3 and 2.2.4. show further details.

Table 2.2.2

HCHS PROGRAMME BUDGET EXPENDITURE, 1997-98 PRICES

£ million

Programme
General & Acute
Total
Maternity
Mental
Illness
Learning
Disability
Children
Adults
Elderly

Total Hospital17,378997 2,2625151,788 4,8886,927
Ordinary admissions12,494 8681,789437 1,0743,2995,027
Day cases1,131- --102 692338
Outpatients2,700129 21115486 6871,173
Day care440- 26263- 3183
Accident & emergency613 --- 127180307
    
Total community4,280187 694787654 8101,148
Community nursing1,799 187368109 43394698
Health visiting340- --221 10613
Professional staff group611 0141 50279267
Immunisation, surveillance

    & Screening

383-- -3403112
Residential care1,146 -311677 --158
Ambulance journeys480 28631449 135192
Other Patient related634 35863871 167236
Non-Patient related1,048 5714363 118276391

Total HCHS23,820 1,3043,2481,418 2,6816,2768,894


Footnotes:

  1.  Figures are provisional.

  2.  Figures may not sum due to rounding.









Traditional Programme Budget Methodology

  8.  This section of the reply discusses trends in Hospital and Community Health Services (HCHS) gross current expenditure over the period 1986-87 to 1995-96, and 1996-97 to 1997-98.

  9.  In order to gain the maximum value and usefulness from the programme budget it is necessary to compare expenditure trends over the period. Major discontinuities in several years make long term comparisons difficult. The most recent changes occurred in 1991-92 and 1996-97. Therefore, although this section covers the period from 1987-88, trends are shown only for growth between 1991-92 and 1995-96. The change in expenditure between 1996-97 and 1997-98 is also shown.

  10.  Expenditure on HCHS is shown in Table 2.2.5. The corresponding annual growth rates are also given. These rates are for the period 1991-92 to 1995-96 and not 1996-97. Figures 2.2.6 to 2.2.9 illustrate the breakdown of expenditure between the main programmes and how this has changed since 1987-88. 1997-98 HCHS expenditure figures are provisional (final accounts figures will be available in the autumn).

  Abbreviations used in Tables A3.1 and A3.2: IP = inpatient; OP = outpatient, DP = day patient;CHS = community health services; JF = joint finance; HCHS = Hospital and Community Health Services; Res = residential; YPD = younger people with physical and/or sensory disabilities; LD = learning disabilities; MH = mental health (previously mental illness); PSS = Personal Social Services; MI = mental illness; LA = Local Authority.


 
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Prepared 18 October 1999