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Getting it right for Personal Health Budgets

Claudia Martínez, research manager at Reform, recently co-authored a report on personal budgets in public services. Here, she outlines the things commissioners must consider when implementing Personal Health Budgets (PHBs).

The NHS expects that by 2024 the number of patients benefiting from PHBs will increase fivefold to 200,000. However, research by Reform has shown that the implementation of personal budgets hasn’t always been smooth. To ensure these tools are effective for users and not a burden for staff, it is important that commissioners get the fundamentals right.

There is a growing consensus that people are best placed to make decisions about their care, and that their needs cannot be met through one-size-fits-all services. Efforts to deliver more coordinated, person-centred care have grown from strength to strength, with PHBs (i.e. money allocated by a commissioner to an individual to help them meet their health and wellbeing needs) being one of the main mechanisms to achieve this.

Yet, as pilots in adult social care and health have shown, making personal budgets work requires more than simply handing over a pot of money to individuals. For commissioners, it means radical transformation to their role: from direct purchasers of services to market-shapers.

As PHBs expand, commissioners need to take a long hard look at their current model for delivering services and work with the provider market to readjust provision to meet people’s changing needs. Failing to do so will likely result in people missing out on the choice and control gains advocated by personalisation – ultimately defeating the purpose of PHBs.

Yet, growing or reshaping the provider market can prove challenging, particularly in markets with single providers or in areas where it would be financially inefficient for multiple providers to operate. Reform’s research shows that partnership working between commissioners, patients, local providers and other services is not only crucial for learning what people want and need, but also for helping the provider market manage the risks inherent in delivering services through novel or unconventional approaches. Northamptonshire’s  experience of deploying PHBs for mental health users is a good example of the benefits of a collaborative model.

Reshaping the market is also about making services more accessible. Ensuring greater visibility of local provision can go a long way in making people aware of the services that are already available and help commissioners proactively identify gaps in provision. Online ‘market hubs’ such as Connect-to-Support are being deployed across the country and providing a one-stop shop for services. In areas where local peer networks and specialist brokerage services have been commissioned to support people in planning and managing their budgets, the process of deploying PHBs has enabled a greater understanding of future need and better targeting of resources. 

More often than not, deploying PHBs and integrated budgets will require redesigning contracting arrangements. For instance, for services funded through block contracts – where providers are paid a fixed amount for a service – commissioners will need to consider whether and how to best unlock the money tied into these contracts to enable more personalised ways of working.

A balance must be struck to ensure that services are responsive, high-quality and deliver value for money. A block contract might work better for certain common items which can be purchased in bulk for a lower cost than by an individual. However, running two models at the same time might result in commissioners incurring higher administrative costs or resources not being deployed effectively.

Delivering the right model requires that commissioners consider PHBs in their transformation and system redesign work and not as ‘bolt-ons’ to contracts. Ongoing work with providers and, more importantly, with the people using the services, as well as a phased approach to implementation, can help deliver on these objectives.