994 RAWP PROPOSALS
National Health Service RAWP has issued two reports. An interim report in August, an allocation formula based on the national utilisation of different services by age and sex groups and applied to the population structure, and a case-load factor for hospital services, reflecting the actual cases (both inpatient and outpatient) in each region. This formed the basis of the 1975/76 allocation to regional health authorities in England. The final report, compiled in the remarkably short period of 16 months, proposes that the future assessment of relative need for health care should be based on: (1) regional population ; (2) national utilisation-rates of various services applied to the age and sex structure of the population; (3) mortality in the form of standardised mortality ratios (s.M.R.s) as a proxy for morbidity; (4) fertility-rates in respect of acute hospital inpatient services for conditions associated with pregnancy; (5) marital status in relation to mental-illness inpatient popula-
1975, recommended
POLICY ALTERNATIVES FOR RESOURCE
ALLOCATION A. BARR
Oxford Regional Health Authority, Old Road, Headington, Oxford OX3 7LF R. F. L. LOGAN
Department of Community Medicine, London School of Hygiene and Tropical Medicine, Keppel Street, London WC1E 7HT
BUREAUCRATIC organisations are inherently ponderous. Schonl labels this phenomenon "dynamic -conservatism" because these institutions submit to change only through crisis and disruption. If this is an accurate classification of the National Health Service, and most people with experience of the Service would concur at least to some extent, then no short-term solution exists for an issue as fundamental as the equal distribution of resources proposed in the recent report by the Resources Allocation Working Party (RAwp) .2 That the only realistic approach is through long-term strategy has already been made clear by the Secretary of State3and, since response is slow and corrective measures are difficult, it is imperative to ensure that the initial policy is correct. Efficiency depends on identifying the key components of the system so that they can be organised in the most effective way to meet the needs of the patients. In this paper we examine the basis of the RAwp recommendations and draw attention to an alternative course of action which could lead to a better and more permanent solution. BASIC TENETS
Two facts are incontrovertible-that N.H.S. real and monetary costs have increased steeply, particularly since 1970,4 and that health-service resources are unevenly spread between and within regions.5-9 Cost and investment issues are complicated by the fact that the N.H.S. does not have clearly demarcated objectives. Several investigationslu-14 have shown that a sizeable proportion of patients do not need the full resources of an acute hospital and could equally well be cared for within the community. The Committee of Enquiry on Competence to Practise’S was ambivalent on the question of clinical reviews. It recognised that good recordkeeping was necessary to enable clinicians to undertake retrospective studies, but stressed that "the purpose of both peer group and self assessment for practising doctors should be educational and that any implications that sanctions may be deployed against those who do less well than their colleagues would be damaging to the spirit of such activities". Unfortunately, there are few objective measures of outcome, though various attempts16-19 have been made to construct indices which would reflect the humanitarian benefits, if any, to be derived from a given input of N.H.S. resources. In view of this uncertainty any group attempting to rationalise health resources undertakes a formidable task. RAwP is no
exception.
tion ; (6) cross-boundary flows by patients; and (7) a London weighting. By and large, the method for weighting the population is similar in principle for capital and revenue purposes, except that for capital allocation inter-regional cross-boundary flows are disregarded, and age-weights are replaced by generalpractitioner consultation-rates. An additional service increment for the teaching of medical and dental students will be payable to designated teaching hospitals. As far as the areas and districts are concerned, RAwp recommended that the same method of allocation should be used as for the regions, with slight modifications. The main differences between the final proposals and those in the interim report, which formed the basis of the target allocations for 1975/76, are the abandonment of the hospital caseload factor and the inclusion of the s.M.R. in estimating the weighted population. Whilst this change affects most regions, the consequences are more dramatic for some than for others, In two instances there are complete inversions. Oxford in the interim report is shown to have less than its fair share of the 1976/77 revenue while, by the criteria of the final report, it stands to lose revenue. In contrast, Mersey has the opposite experience. The region which, by the interim report, would enjoy the greatest benefit, is Wessex, whereas, in the final report, this position falls, by a narrow margin, to North-Western. At the other extreme, North-East Thames makes the greatest sacrifice on both recommendations. Both the interim and final proposals would have the effect of gradually moving health-service revenue and capital from the metropolis to the provinces. RAwp recognises that "the change having the greatest effect is the introduction of a morbidity factor based upon S.M.R.S", hence it is important to consider the effect of this decision. The S.M.R. is the ratio of the number of deaths actually occurring in an area to the number expected if the mortalityrates by age and sex in the standard or total population were applicable to the particular area. Note particularly that this is a ratio and not a rate. An example will show how the s.M.R. is derived and illustrate some of its weaknesses. The accompanying table indicates the observed male deaths in 1973 for the Oxford and Newcastle R.H.B.s and the expected deaths in accordance with the national death-rate for England and Wales. The expected number of deaths in the Oxford Region, had the national age-specific death-rate applied to the population of Oxford, is 11 437; the actual number occurring was 10 227. Thus the S.M.R. is 0-89 or 89%. By the same method, the S.M.R. for Newcastle is 115%. From this one might conclude that Newcastle is a lot less healthy than Oxford, but these indices mask quite marked differences within and between age-groups. The deaths in age-group 5-24 years were relatively lower in Newcastle than in Oxford; indeed the deaths in the 15-24 age group in Oxford were 2% above the national average. If deaths are an accurate reflection of morbidity, such a figure should give cause for concern, but it is not in fact apparent in the overall S.M.R. In a detailed examination of the use of mortality indices Kilpatrick20 concluded that only when
995 ANALYSIS BY AGE-GROUP OF MALE DEATHS IN
1973
FOR ENGLAND AND WALES AND OXFORD AND NEWCASTLE REGIONAL HOSPITAL BOARDS
age-specific mortality ratios are not significantly different can the S.M.R. for different groups be safely compared. In many situations age-specific death-rates are not available and the only possible calculation is the S.M.R. Where, however, they are available, as in the present instance, it would be judicious, if mortality is to be used as a surrogate for morbidity, to use them in preference to the S .M.R. 21 RAwp not only used the more questionable index, it assumed the existence of a direct one-to-one linear relationship between mortality and morbidity, that is, it believed that every proportional increase in mortality would carry the same proportional increase in morbidity. No hard evidence is produced to support this view, and the available research does not seem to endorse it. For example, studies at the U.S. National Bureau of Economic Research on inter-State differences in mortality showed that variations in the number of physicians per capita, expenditure on physicians’ services, and other medical-care inputs, have only slight effects on mortality. Surveying inequalities in the N.H.S., Townsend22 suggested that death-rates are more a reflection of social class than of the availability of health services. Anderson23 estimated that there would be a mortality reduction of only around 6% given the full application of current medical diagnosis and treatment capability, whereas changes in life style would have an appreciably greater effect. Others have drawn similar conclusions.24 25 Perhaps the final, and certainly the most depressing, commentary on the unsatisfactory nature of deaths as a yardstick for distributing healthservice resources is contained in the Court report on child health services.26 The post-neonatal mortality-rate in England and Wales has failed to show any significant improvement over the past 15 years, in contrast to that in many other countries. One reason for this may be that health care is organised on a "service" rather than a "client group" basis, with the result that underlying symptoms may be treated whilst causes are ignored. It is not the first time that mortality has been used as a stand-in for morbidity in allocating health-service resources. As long ago as 1947 the Hospital Council for New York 27 calculated bed need on the basis of mortality data; there were two reasons for this-(1) reliable death statistics are available each year for almost any locality while population counts and population characteristics are available only decennially, and pertinent morbidity data are seldom available, and (2) when morbidity data are available their translation into hospital need is by no means straightforward .18 The staff of the Hospital Council became increasingly sceptical of the bed-death formula because of its constancy despite considerable post-war de-
velopments
in medicine, including improved rehabilitation, radical surgery, and antibiotic drugs, the introduction of voluntary health insurance and home-care programmes, and shifts in the age of the population. During the 1950s the method was abandoned and replaced by population projections, but it soon became evident that it is neither feasible nor
wise to predict populations for the lifetime of a new hospital. To cope with the contingency of erroneous forecasts as well as changes in the efficacy of medical care, reliance has now been placed on a planning agency that would recognise promptly the emergence of new requirements; the policy underlines the importance of preserving flexibility in the use of resources. In view of the obscure relationship between the input of revenue and the output of patient care, a conservative attitude to change must be maintained to enable the essential investigations suggested by RAwp to be made. Practically, this means accepting, for the next few years, the allocation formula introduced in 197-1/7229 or the interim RAwp proposal which is similar to the earlier method and is basically equitable,3O or the final RAwp proposals without S.M.R.S. In view of the commendable performance of the N.H.S. to date, a decision in favour of temporary postponement is reasonable. A moratorium on using death-rates in any form should accelerate the search for realistic measures of health-care need and protect the public from the considerable dangers implicit in the application of what may be a misguided financial strategy. If basic issues are ignored in the interests of expediency, then the N.H.S. is likely to undergo another upheaval as traumatic as reorganisation.31 FUTURE GOALS
What issues need to be resolved before a formula which is objective and realistic can be developed for reallocating resources? Space is available to mention only five. First, there is the question of outcome. Until there is a clearer understanding of the limits of medicine, as argued by Illich32 and McKeown,33 alongside the evaluation of medical-care prescriptions that has been strongly advocated over many years by Cochrane,34 an intelligent and worthwhile debate on health strategy is virtually impossible.35 Sadly, the proliferation of information banks has brought no nearer an evaluation of alternative forms of care. 36 Secondly, the creation of positive incentives is imperative. Efficiency should be seen to be rewarded and not penalised. For hospitals, Feldstein37 developed an econometric model with the three performance indices of productivity, costliness, and input efficiency. Such a method is not perfect,38 but is worth consideration.39 Hospitals within the same broad homogeneous group would have benchmarks against which to judge their performance .40 The advantages are twofold. First, hospitals would be encouraged to adopt a revenue investment portfolio which would make the best use of the existing allocations, and second, only when a hospital reached a satis-
996 level of efficiency would it be given additional This would ensure that the available revenue would be spent on those facilities which led directly to treating patients in the most efficient manner. In short, it might be possible to combine the economics of the private sector with the social-welfare policy of a nationalised service. thirdly, the health-care needs of the population must be assessed more accurately than hitherto.4’The current General Household Study42 and its forerunner, the Survey of Sickness,43 an obligatory wartime investigation, have pioneered the way. More elaborate frameworks have been devised under the auspices of the World Health Organisation ’44 and have been piloted in Liverpool, among other international centres. Experience with "before" and "after" studies on the reorganisation of the health services in Finland,45 46 and its continuing application, provides sound evidence of the practical value of this kind of approach. Although such surveys may seem expensive, the cost would in practice probably be comparable to that of the Hospital Activity AnalysisY 411 A sample household survey is the vital linchpin in specifying what the public requires from the whole gamut of social-welfare planning, including health services, and particularly the extent of unmet need and inadequacy of services within the community. It is a sobering relection that the methodology to pursue such studies has existed for thirty years, yet these critical questions remain unanswered. Fourthly, allocation of resources cannot be divorced completely from the fundamental issue of how the N.H.S. should be financed and managed. During the 1960s the issue of State versus market system of financing the N.H.S. was often discussed by economists and others49 -10 More recently, ex-Minister of Health Mr Enoch Powell has written, "a National Health Service is inherently unsuitable for administration by a political minister" 51 and this, together with the increasing rigidity caused by centralised control and standardisation, give ground for concern about the future organisation of the N.H.S. The regius professor of medicine at Oxford concluded his survey of N.H.S. progress by saying: "Equality, however, is not everything. Central though it is to the concept of the service, it must not be allowed to become the sole criterion. Progress depends on innovation and it is also important to encourage local initiative to set new standards and to prove their worth".5:l The balance between equality and effectiveness is a fine
factory
revenue.
adjustment. Lastly, no modern health programme can afford to ignore the critical role of prevention because, as de Kadt53 rightly remarked: "Health has less to do with medicine than with economics, class and politics". To regard the N.H.S. simply as a breakdown service is to miss its real purpose. Resources for health must be set in the wider context of the social and economic wellbeing of the community. Some, if not all, of these issues will appear on the agenda of the Royal Commission over the next few years. Logically it would seem appropriate that any change in the present structure of the service should be postponed until the Royal Commission reports, but prevailing circumstance makes this a counsel of perfection. A more pragmatic approach is indicated. With RAwp as a starting point, a research team should be given, as a
of some urgency, the specific task of evaluating the alternative strategies for investment in health services. Having started as a social experiment, the N.H.S. has become a social necessity. The overriding obligation must now be to evolve a stable organisational system which permits and encourages the most effective use of health-care resources. matter
We thank Dr E. R. Rue and colleagues at the Oxford Regional Health Authority and Mr A. Griffiths of the Department of Community Medtcme, London School of Hygiene and Tropical Medicine, for helpful discussions. This paper is a synopsis of a more detailed report, copies of which are available from A. B.
REFERENCES 1. Schon, D. Listener, Nov. 26, 1970, p. 724. 2. Department of Health and Social Security Sharing Resources for Health in England. Report of the Resource Allocation Working Party. H.M Stationery Office, 1976. 3. Department of Health and Social Security. Outlook for N.H.S. Resource’ and the Distribution between Regions. Dec. 21, 1976. 4. Department of Health and Social Security. Health and Personal Social Services Statistics for England. H.M. Stationery Office, 1975. 5. Buxton, M. J., Klein, R. E. Br. med. J. 1975, i, 345. 6. Rickard, J. H. ibid. 1976, i, 299. 7. Noyce, J., Snaith, A. H., Trickey, A. J. Lancet, 1974, , 554. 8. Cooper, M. H., Culyer, A. J. An Economic Assessment of Some Aspects of the Operation of the National Health Service. In Health Services Financmg. Report of the British Medical Association Advisory Panel, 1970 9. Jones, D. R., Masterman, S. Br. J. prev. soc. Med. 1976, 30, 244. 10. Forsythe, G. Logan, R. F. L. The Demand for Medical Care. London, 1960, 11. Department of Health and Social Security. On the State of the Public Health. Annual Report of the Chief Medical Officer. H.M. Stationery Office, 1967. 12. Loudon, I. S. L. The Demand for Hospital Care. Oxford, 1970. 13. Meredith, J. S., Anderson, M. A., Price, A. C., Leithhead, J. "Hostels" in Hospitals: the Analysis of Beds in Hospitals by Patient Dependency. London, 1968. 14. Donaldson, S. N., Wheeler, M. Barr, A. Br. med. J. (in the press). 15. Report of the Committee of Enquiry into Competence to Practise. London, 1976. 16. Williams, A. in The Economics of Health and Medical Care (edited by M. Perlman). London, 1974. 17. Fanshel, S., Bush, J. W. Ops Res. 1970, 18, 1021. 18. Rosser, R. Watts, V. Int. J. Epidemiol. 1972, 1, 361. 19. Krischer, J. P. Hlth Servs. Res. 1976, 11, 143. 20. Kilpatrick, S. J. Appl. Statistics, 1963, 12, 65. 21. Silcock, H. Popul. Stud. 1959, 13, 183. 22. Townsend, P. Lancet, 1974, , 1179. 23. Anderson, O. W. Health Care: Can There Be Equity? The United States, Sweden and England. New York, 1972. 24. Wilkinson, R. C. New Society, 1976, 38, 567. 25. Which? August, 1975, p. 232. 26. Report of the Committee on Child Health Services. Fit for the Future. Cmnd. 6684. H.M. Stationery Office, 1976. 27. Hospital Council for Greater New York. The Master Plan for Hospitals and Related Services for New York City. New York, 1947. 28. Klarman, H. E. in Medical Care Research (edited by K. L. White) Oxford, 1965. 29. Department of Health and Social Security. Circular 3/70. 30. West, P. A. Appl. Economics, 1973, 5, 153. 31. National Health Service Reorganisation: England. Cmnd. 5055. H.M. Stationery Office, 1972. 32. Illich, I. Limits to Medicine: Medical Nemesis, the Expropriation of Health
London, 1976. 33. McKeown, T. The Role of Medicine: Dream, Mirage or Nemesis? Rock Carling Monograph. London, 1976. 34. Cochrane, A. L. Effectiveness and Efficiency: Random Reflections on Health Services. Rock Carling Monograph. London, 1971. 35. Griffiths, D. A. T. Hospital, Lond. 1971, 67, 229. 36. Ashley, J. S. A., Howlett, A., Morris, J. N. Lancet, 1971, ii, 1308. 37. Feldstem, M. S. Economic Analysis for Health Service Efficiency. Amsterdam, 1967. 38. Berki, S. E. Hospital Economics. London, 1972. 39. Barr, A. Lancet, 1968, , 353. 40. Beresford, J. C., Griffiths, D. A. T. Hospital, Lond. 1970, 66, 48. 41. Logan, R. F. L., Klein, R. E., Griffiths, D. A. T. Lancet, 1970, , 647, 42. Office of Population Censuses and Surveys. General Household Survev H.M. Stationery Office, 1973. 43. Logan, W. P. D., Brooke, E. M. Survey of Sickness, 1943 to 1952 HM Stationery Office, 1957. 44. Kohn, R., White, K. L. (editors) Health Care: Report of W H.O./International Collaborative Study of Medical Care Utilisation. London, 1976
997
MORTALITY, MORBIDITY, AND RESOURCE ALLOCATION D. P. FORSTER Medical Care Research Unit, Department of Community Medicine, University of Sheffield Medical School, Beech Hill Road, Sheffield S10 2RX
The correlation between age and sex standardised mortality-rates, and morbidity-rates from the General Household Survey (G.H.S.) similarly standardised, were examined for the 10 standard statistical regions for 1972 and 1973 combined. The correlations between mortality and acute sickness and between mortality and bed sickness were not significant. A significant correlation was found between mortality and chronic sickness, but not between mortality and work or school absence due to illness or injury in males. It is concluded that, on present evidence, there is some doubt whether mortality can be considered to be a valid indicator of morbidity in a population. Serious consideration should therefore be given to the removal of standardised mortality ratios (S.M.R.S) from the formula for the distribution of revenue as recommended by the Resource Allocation Working Party (RAWP).
Summary
INTRODUCTION
THE report of the Resource Allocation Working Party recommended fundamental changes in the formula for the distribution of revenue to the regional health authorities (R.H.A.S ).1 A basic component in the new formula is mortality, measured by standardised mortality ratios S,M.R.S. The working-party recommended that in the assessment of the relative need for health care, s.M.R.s for each R.H.A. should be introduced into the population weightings as a proxy for morbidity. The s.M.R. would be on a condition-specific basis for acute non-psychiatric hospital inpatient services, and on an overall basis for non-psychiatric day and outpatient services, for community health services, and for ambulance services. The working-party established that overall s.M.R.s when applied to inpatients gave broadly the same results as
condition-specific S.M.R.S. The critical question is how
accurate mortality is as indicator of the relative need for health care in a population. Previous work has suggested that mortality is a sensitive indicator of the health status of a population in developed countries only when infectious diseases are a major health problem.2 Similarly, a World Health
Organisation report considered that where the numbers of deaths per year in the age range 1 week to 5 5 years are small, mortality-rates are unlikely to reflect the need for medical care.3 In contrast, RAwp supported the use of mortality as a proxy for morbidity by suggesting significant positive correlations between s.M.R.s and agestandardised morbidity derived from the G.H.s. for the standard statistical regions of England and Wales. This evidence, based on the data for the single year of 1972, is open to challenge, since the G.H.S. is carried out annually on a sample of the population drawn in a complex manner (a three-stage, stratified rotating sample design).4 Some apparent differences in morbidity between standard regions, based on a single year’s data, may be attributable to sampling variation.5 METHOD
In the present study the sampling error of G.H.S. morbidity data has been reduced, and hence the accuracy increased, by combining data for two years. Morbidity information from the G.H.S. is not available for R.H.A.s, but is available for the standard statistical regions of England and Wales. Comparisons between age and sex standardised morbidity data and age and sex standardised mortality data for the combined years of 1972 and 1973 were carried out for the 10 standard regions. All data were age and sex standardised by the direct method with the 1971 census population for England and Wales as the standard. The direct method of age-standardisation was chosen in preference to the indirect method since no adequate standardising-rates for morbidity from an external population were available. Direct age-standardised mortality-rates provide essentially the same results as S.M.R.S, since the rank ordering of the standard regions and the variation between them are identical. The following morbidity indicators from the G.H.s. for 1972 and 1973 combined were used:
Acute sickness
(including
the exacerbation of chronic sickor in-
ness)-restriction of normal activities because of illness jury during a two-week reference period.
Bed sickness-acute sickness necessitating a stay in bed during a two-week reference period. Chronic sickness-a state of long-standing illness, disability, or infirmity. Work or school absence-acute sickness necessitating time off work or school, during a two-week reference period (this includes uncertificated absence).
an
45. Purola, T., Kalimo, E., Sievers, K., Nyman, K. The Utilisation of the Medical Services and its relation to Morbidity, Health Resources and Social Factors: a Survey of the Population of Finland Prior to National Sickness Insurance Scheme. Helsinki, 1968. 46. Purola, T. Kalimo, E., Nyman, K. Health Service Use and Health Status under National Sickness Insurance: an Evaluative Re-survey of Finland.
Helsinki, 1974. Rowe, R. G., Brewer, W. Hospital Activity Analysis. London, 1972. Logan, R. F. L., Ashley, J. S. A., Klein, R. E., Robson, D. M. Dynamics of Medical Care: the Liverpool Study into Use of Hospital Resources. London School of Hygiene and Tropical Medicine, memoir no. 14, 1972. 49 Culyer, A. J. in Health Economics (edited by M. H. Cooper and A. J. Culyer). London, 1971. 50 Hauser, M. M (editor) The Economics of Medical Care. London, 1972. 51 Powell, J. E. Medicine and Politics: 1975 and After. Tunbridge Wells, 1976. 52 Doll, R. To Measure N.H.S. Progress. Fabian Society Interim Occasional Paper, no. 8. London, 1974. 53 de Kadt, E. New Society, 1976, 36, 525.
47 48
RESULTS
shows the age and sex standardised rates and rankfor mortality and morbidity indicators for the standard statistical regions in the combined years of 1972 and 1973. There are considerable differences in the ranking order. For example, the North West standard region ranks highest for mortality but sixth for acute sickness and fifth for bed sickness. The Greater London Council ranks seventh for mortality but second for acute sickness and third for bed sickness. Application of Spearman’s rank order correlation coefficient’ revealed no significant overall correlation between mortality and acute sickness or between mortality and bed sickness. Fewer large differences in the ranking order were found between mortality and chronic sickness, and the rank order correlation coefficient between these two indicators is signifiTable
i
ing order
cant
(p
National Health Service RAWP has issued two reports. An interim report in August, an allocation formula based on the national utilisation of different services by age and sex groups and applied to the population structure, and a case-load factor for hospital services, reflecting the actual cases (both inpatient and outpatient) in each region. This formed the basis of the 1975/76 allocation to regional health authorities in England. The final report, compiled in the remarkably short period of 16 months, proposes that the future assessment of relative need for health care should be based on: (1) regional population ; (2) national utilisation-rates of various services applied to the age and sex structure of the population; (3) mortality in the form of standardised mortality ratios (s.M.R.s) as a proxy for morbidity; (4) fertility-rates in respect of acute hospital inpatient services for conditions associated with pregnancy; (5) marital status in relation to mental-illness inpatient popula-
1975, recommended
POLICY ALTERNATIVES FOR RESOURCE
ALLOCATION A. BARR
Oxford Regional Health Authority, Old Road, Headington, Oxford OX3 7LF R. F. L. LOGAN
Department of Community Medicine, London School of Hygiene and Tropical Medicine, Keppel Street, London WC1E 7HT
BUREAUCRATIC organisations are inherently ponderous. Schonl labels this phenomenon "dynamic -conservatism" because these institutions submit to change only through crisis and disruption. If this is an accurate classification of the National Health Service, and most people with experience of the Service would concur at least to some extent, then no short-term solution exists for an issue as fundamental as the equal distribution of resources proposed in the recent report by the Resources Allocation Working Party (RAwp) .2 That the only realistic approach is through long-term strategy has already been made clear by the Secretary of State3and, since response is slow and corrective measures are difficult, it is imperative to ensure that the initial policy is correct. Efficiency depends on identifying the key components of the system so that they can be organised in the most effective way to meet the needs of the patients. In this paper we examine the basis of the RAwp recommendations and draw attention to an alternative course of action which could lead to a better and more permanent solution. BASIC TENETS
Two facts are incontrovertible-that N.H.S. real and monetary costs have increased steeply, particularly since 1970,4 and that health-service resources are unevenly spread between and within regions.5-9 Cost and investment issues are complicated by the fact that the N.H.S. does not have clearly demarcated objectives. Several investigationslu-14 have shown that a sizeable proportion of patients do not need the full resources of an acute hospital and could equally well be cared for within the community. The Committee of Enquiry on Competence to Practise’S was ambivalent on the question of clinical reviews. It recognised that good recordkeeping was necessary to enable clinicians to undertake retrospective studies, but stressed that "the purpose of both peer group and self assessment for practising doctors should be educational and that any implications that sanctions may be deployed against those who do less well than their colleagues would be damaging to the spirit of such activities". Unfortunately, there are few objective measures of outcome, though various attempts16-19 have been made to construct indices which would reflect the humanitarian benefits, if any, to be derived from a given input of N.H.S. resources. In view of this uncertainty any group attempting to rationalise health resources undertakes a formidable task. RAwP is no
exception.
tion ; (6) cross-boundary flows by patients; and (7) a London weighting. By and large, the method for weighting the population is similar in principle for capital and revenue purposes, except that for capital allocation inter-regional cross-boundary flows are disregarded, and age-weights are replaced by generalpractitioner consultation-rates. An additional service increment for the teaching of medical and dental students will be payable to designated teaching hospitals. As far as the areas and districts are concerned, RAwp recommended that the same method of allocation should be used as for the regions, with slight modifications. The main differences between the final proposals and those in the interim report, which formed the basis of the target allocations for 1975/76, are the abandonment of the hospital caseload factor and the inclusion of the s.M.R. in estimating the weighted population. Whilst this change affects most regions, the consequences are more dramatic for some than for others, In two instances there are complete inversions. Oxford in the interim report is shown to have less than its fair share of the 1976/77 revenue while, by the criteria of the final report, it stands to lose revenue. In contrast, Mersey has the opposite experience. The region which, by the interim report, would enjoy the greatest benefit, is Wessex, whereas, in the final report, this position falls, by a narrow margin, to North-Western. At the other extreme, North-East Thames makes the greatest sacrifice on both recommendations. Both the interim and final proposals would have the effect of gradually moving health-service revenue and capital from the metropolis to the provinces. RAwp recognises that "the change having the greatest effect is the introduction of a morbidity factor based upon S.M.R.S", hence it is important to consider the effect of this decision. The S.M.R. is the ratio of the number of deaths actually occurring in an area to the number expected if the mortalityrates by age and sex in the standard or total population were applicable to the particular area. Note particularly that this is a ratio and not a rate. An example will show how the s.M.R. is derived and illustrate some of its weaknesses. The accompanying table indicates the observed male deaths in 1973 for the Oxford and Newcastle R.H.B.s and the expected deaths in accordance with the national death-rate for England and Wales. The expected number of deaths in the Oxford Region, had the national age-specific death-rate applied to the population of Oxford, is 11 437; the actual number occurring was 10 227. Thus the S.M.R. is 0-89 or 89%. By the same method, the S.M.R. for Newcastle is 115%. From this one might conclude that Newcastle is a lot less healthy than Oxford, but these indices mask quite marked differences within and between age-groups. The deaths in age-group 5-24 years were relatively lower in Newcastle than in Oxford; indeed the deaths in the 15-24 age group in Oxford were 2% above the national average. If deaths are an accurate reflection of morbidity, such a figure should give cause for concern, but it is not in fact apparent in the overall S.M.R. In a detailed examination of the use of mortality indices Kilpatrick20 concluded that only when
995 ANALYSIS BY AGE-GROUP OF MALE DEATHS IN
1973
FOR ENGLAND AND WALES AND OXFORD AND NEWCASTLE REGIONAL HOSPITAL BOARDS
age-specific mortality ratios are not significantly different can the S.M.R. for different groups be safely compared. In many situations age-specific death-rates are not available and the only possible calculation is the S.M.R. Where, however, they are available, as in the present instance, it would be judicious, if mortality is to be used as a surrogate for morbidity, to use them in preference to the S .M.R. 21 RAwp not only used the more questionable index, it assumed the existence of a direct one-to-one linear relationship between mortality and morbidity, that is, it believed that every proportional increase in mortality would carry the same proportional increase in morbidity. No hard evidence is produced to support this view, and the available research does not seem to endorse it. For example, studies at the U.S. National Bureau of Economic Research on inter-State differences in mortality showed that variations in the number of physicians per capita, expenditure on physicians’ services, and other medical-care inputs, have only slight effects on mortality. Surveying inequalities in the N.H.S., Townsend22 suggested that death-rates are more a reflection of social class than of the availability of health services. Anderson23 estimated that there would be a mortality reduction of only around 6% given the full application of current medical diagnosis and treatment capability, whereas changes in life style would have an appreciably greater effect. Others have drawn similar conclusions.24 25 Perhaps the final, and certainly the most depressing, commentary on the unsatisfactory nature of deaths as a yardstick for distributing healthservice resources is contained in the Court report on child health services.26 The post-neonatal mortality-rate in England and Wales has failed to show any significant improvement over the past 15 years, in contrast to that in many other countries. One reason for this may be that health care is organised on a "service" rather than a "client group" basis, with the result that underlying symptoms may be treated whilst causes are ignored. It is not the first time that mortality has been used as a stand-in for morbidity in allocating health-service resources. As long ago as 1947 the Hospital Council for New York 27 calculated bed need on the basis of mortality data; there were two reasons for this-(1) reliable death statistics are available each year for almost any locality while population counts and population characteristics are available only decennially, and pertinent morbidity data are seldom available, and (2) when morbidity data are available their translation into hospital need is by no means straightforward .18 The staff of the Hospital Council became increasingly sceptical of the bed-death formula because of its constancy despite considerable post-war de-
velopments
in medicine, including improved rehabilitation, radical surgery, and antibiotic drugs, the introduction of voluntary health insurance and home-care programmes, and shifts in the age of the population. During the 1950s the method was abandoned and replaced by population projections, but it soon became evident that it is neither feasible nor
wise to predict populations for the lifetime of a new hospital. To cope with the contingency of erroneous forecasts as well as changes in the efficacy of medical care, reliance has now been placed on a planning agency that would recognise promptly the emergence of new requirements; the policy underlines the importance of preserving flexibility in the use of resources. In view of the obscure relationship between the input of revenue and the output of patient care, a conservative attitude to change must be maintained to enable the essential investigations suggested by RAwp to be made. Practically, this means accepting, for the next few years, the allocation formula introduced in 197-1/7229 or the interim RAwp proposal which is similar to the earlier method and is basically equitable,3O or the final RAwp proposals without S.M.R.S. In view of the commendable performance of the N.H.S. to date, a decision in favour of temporary postponement is reasonable. A moratorium on using death-rates in any form should accelerate the search for realistic measures of health-care need and protect the public from the considerable dangers implicit in the application of what may be a misguided financial strategy. If basic issues are ignored in the interests of expediency, then the N.H.S. is likely to undergo another upheaval as traumatic as reorganisation.31 FUTURE GOALS
What issues need to be resolved before a formula which is objective and realistic can be developed for reallocating resources? Space is available to mention only five. First, there is the question of outcome. Until there is a clearer understanding of the limits of medicine, as argued by Illich32 and McKeown,33 alongside the evaluation of medical-care prescriptions that has been strongly advocated over many years by Cochrane,34 an intelligent and worthwhile debate on health strategy is virtually impossible.35 Sadly, the proliferation of information banks has brought no nearer an evaluation of alternative forms of care. 36 Secondly, the creation of positive incentives is imperative. Efficiency should be seen to be rewarded and not penalised. For hospitals, Feldstein37 developed an econometric model with the three performance indices of productivity, costliness, and input efficiency. Such a method is not perfect,38 but is worth consideration.39 Hospitals within the same broad homogeneous group would have benchmarks against which to judge their performance .40 The advantages are twofold. First, hospitals would be encouraged to adopt a revenue investment portfolio which would make the best use of the existing allocations, and second, only when a hospital reached a satis-
996 level of efficiency would it be given additional This would ensure that the available revenue would be spent on those facilities which led directly to treating patients in the most efficient manner. In short, it might be possible to combine the economics of the private sector with the social-welfare policy of a nationalised service. thirdly, the health-care needs of the population must be assessed more accurately than hitherto.4’The current General Household Study42 and its forerunner, the Survey of Sickness,43 an obligatory wartime investigation, have pioneered the way. More elaborate frameworks have been devised under the auspices of the World Health Organisation ’44 and have been piloted in Liverpool, among other international centres. Experience with "before" and "after" studies on the reorganisation of the health services in Finland,45 46 and its continuing application, provides sound evidence of the practical value of this kind of approach. Although such surveys may seem expensive, the cost would in practice probably be comparable to that of the Hospital Activity AnalysisY 411 A sample household survey is the vital linchpin in specifying what the public requires from the whole gamut of social-welfare planning, including health services, and particularly the extent of unmet need and inadequacy of services within the community. It is a sobering relection that the methodology to pursue such studies has existed for thirty years, yet these critical questions remain unanswered. Fourthly, allocation of resources cannot be divorced completely from the fundamental issue of how the N.H.S. should be financed and managed. During the 1960s the issue of State versus market system of financing the N.H.S. was often discussed by economists and others49 -10 More recently, ex-Minister of Health Mr Enoch Powell has written, "a National Health Service is inherently unsuitable for administration by a political minister" 51 and this, together with the increasing rigidity caused by centralised control and standardisation, give ground for concern about the future organisation of the N.H.S. The regius professor of medicine at Oxford concluded his survey of N.H.S. progress by saying: "Equality, however, is not everything. Central though it is to the concept of the service, it must not be allowed to become the sole criterion. Progress depends on innovation and it is also important to encourage local initiative to set new standards and to prove their worth".5:l The balance between equality and effectiveness is a fine
factory
revenue.
adjustment. Lastly, no modern health programme can afford to ignore the critical role of prevention because, as de Kadt53 rightly remarked: "Health has less to do with medicine than with economics, class and politics". To regard the N.H.S. simply as a breakdown service is to miss its real purpose. Resources for health must be set in the wider context of the social and economic wellbeing of the community. Some, if not all, of these issues will appear on the agenda of the Royal Commission over the next few years. Logically it would seem appropriate that any change in the present structure of the service should be postponed until the Royal Commission reports, but prevailing circumstance makes this a counsel of perfection. A more pragmatic approach is indicated. With RAwp as a starting point, a research team should be given, as a
of some urgency, the specific task of evaluating the alternative strategies for investment in health services. Having started as a social experiment, the N.H.S. has become a social necessity. The overriding obligation must now be to evolve a stable organisational system which permits and encourages the most effective use of health-care resources. matter
We thank Dr E. R. Rue and colleagues at the Oxford Regional Health Authority and Mr A. Griffiths of the Department of Community Medtcme, London School of Hygiene and Tropical Medicine, for helpful discussions. This paper is a synopsis of a more detailed report, copies of which are available from A. B.
REFERENCES 1. Schon, D. Listener, Nov. 26, 1970, p. 724. 2. Department of Health and Social Security Sharing Resources for Health in England. Report of the Resource Allocation Working Party. H.M Stationery Office, 1976. 3. Department of Health and Social Security. Outlook for N.H.S. Resource’ and the Distribution between Regions. Dec. 21, 1976. 4. Department of Health and Social Security. Health and Personal Social Services Statistics for England. H.M. Stationery Office, 1975. 5. Buxton, M. J., Klein, R. E. Br. med. J. 1975, i, 345. 6. Rickard, J. H. ibid. 1976, i, 299. 7. Noyce, J., Snaith, A. H., Trickey, A. J. Lancet, 1974, , 554. 8. Cooper, M. H., Culyer, A. J. An Economic Assessment of Some Aspects of the Operation of the National Health Service. In Health Services Financmg. Report of the British Medical Association Advisory Panel, 1970 9. Jones, D. R., Masterman, S. Br. J. prev. soc. Med. 1976, 30, 244. 10. Forsythe, G. Logan, R. F. L. The Demand for Medical Care. London, 1960, 11. Department of Health and Social Security. On the State of the Public Health. Annual Report of the Chief Medical Officer. H.M. Stationery Office, 1967. 12. Loudon, I. S. L. The Demand for Hospital Care. Oxford, 1970. 13. Meredith, J. S., Anderson, M. A., Price, A. C., Leithhead, J. "Hostels" in Hospitals: the Analysis of Beds in Hospitals by Patient Dependency. London, 1968. 14. Donaldson, S. N., Wheeler, M. Barr, A. Br. med. J. (in the press). 15. Report of the Committee of Enquiry into Competence to Practise. London, 1976. 16. Williams, A. in The Economics of Health and Medical Care (edited by M. Perlman). London, 1974. 17. Fanshel, S., Bush, J. W. Ops Res. 1970, 18, 1021. 18. Rosser, R. Watts, V. Int. J. Epidemiol. 1972, 1, 361. 19. Krischer, J. P. Hlth Servs. Res. 1976, 11, 143. 20. Kilpatrick, S. J. Appl. Statistics, 1963, 12, 65. 21. Silcock, H. Popul. Stud. 1959, 13, 183. 22. Townsend, P. Lancet, 1974, , 1179. 23. Anderson, O. W. Health Care: Can There Be Equity? The United States, Sweden and England. New York, 1972. 24. Wilkinson, R. C. New Society, 1976, 38, 567. 25. Which? August, 1975, p. 232. 26. Report of the Committee on Child Health Services. Fit for the Future. Cmnd. 6684. H.M. Stationery Office, 1976. 27. Hospital Council for Greater New York. The Master Plan for Hospitals and Related Services for New York City. New York, 1947. 28. Klarman, H. E. in Medical Care Research (edited by K. L. White) Oxford, 1965. 29. Department of Health and Social Security. Circular 3/70. 30. West, P. A. Appl. Economics, 1973, 5, 153. 31. National Health Service Reorganisation: England. Cmnd. 5055. H.M. Stationery Office, 1972. 32. Illich, I. Limits to Medicine: Medical Nemesis, the Expropriation of Health
London, 1976. 33. McKeown, T. The Role of Medicine: Dream, Mirage or Nemesis? Rock Carling Monograph. London, 1976. 34. Cochrane, A. L. Effectiveness and Efficiency: Random Reflections on Health Services. Rock Carling Monograph. London, 1971. 35. Griffiths, D. A. T. Hospital, Lond. 1971, 67, 229. 36. Ashley, J. S. A., Howlett, A., Morris, J. N. Lancet, 1971, ii, 1308. 37. Feldstem, M. S. Economic Analysis for Health Service Efficiency. Amsterdam, 1967. 38. Berki, S. E. Hospital Economics. London, 1972. 39. Barr, A. Lancet, 1968, , 353. 40. Beresford, J. C., Griffiths, D. A. T. Hospital, Lond. 1970, 66, 48. 41. Logan, R. F. L., Klein, R. E., Griffiths, D. A. T. Lancet, 1970, , 647, 42. Office of Population Censuses and Surveys. General Household Survev H.M. Stationery Office, 1973. 43. Logan, W. P. D., Brooke, E. M. Survey of Sickness, 1943 to 1952 HM Stationery Office, 1957. 44. Kohn, R., White, K. L. (editors) Health Care: Report of W H.O./International Collaborative Study of Medical Care Utilisation. London, 1976
997
MORTALITY, MORBIDITY, AND RESOURCE ALLOCATION D. P. FORSTER Medical Care Research Unit, Department of Community Medicine, University of Sheffield Medical School, Beech Hill Road, Sheffield S10 2RX
The correlation between age and sex standardised mortality-rates, and morbidity-rates from the General Household Survey (G.H.S.) similarly standardised, were examined for the 10 standard statistical regions for 1972 and 1973 combined. The correlations between mortality and acute sickness and between mortality and bed sickness were not significant. A significant correlation was found between mortality and chronic sickness, but not between mortality and work or school absence due to illness or injury in males. It is concluded that, on present evidence, there is some doubt whether mortality can be considered to be a valid indicator of morbidity in a population. Serious consideration should therefore be given to the removal of standardised mortality ratios (S.M.R.S) from the formula for the distribution of revenue as recommended by the Resource Allocation Working Party (RAWP).
Summary
INTRODUCTION
THE report of the Resource Allocation Working Party recommended fundamental changes in the formula for the distribution of revenue to the regional health authorities (R.H.A.S ).1 A basic component in the new formula is mortality, measured by standardised mortality ratios S,M.R.S. The working-party recommended that in the assessment of the relative need for health care, s.M.R.s for each R.H.A. should be introduced into the population weightings as a proxy for morbidity. The s.M.R. would be on a condition-specific basis for acute non-psychiatric hospital inpatient services, and on an overall basis for non-psychiatric day and outpatient services, for community health services, and for ambulance services. The working-party established that overall s.M.R.s when applied to inpatients gave broadly the same results as
condition-specific S.M.R.S. The critical question is how
accurate mortality is as indicator of the relative need for health care in a population. Previous work has suggested that mortality is a sensitive indicator of the health status of a population in developed countries only when infectious diseases are a major health problem.2 Similarly, a World Health
Organisation report considered that where the numbers of deaths per year in the age range 1 week to 5 5 years are small, mortality-rates are unlikely to reflect the need for medical care.3 In contrast, RAwp supported the use of mortality as a proxy for morbidity by suggesting significant positive correlations between s.M.R.s and agestandardised morbidity derived from the G.H.s. for the standard statistical regions of England and Wales. This evidence, based on the data for the single year of 1972, is open to challenge, since the G.H.S. is carried out annually on a sample of the population drawn in a complex manner (a three-stage, stratified rotating sample design).4 Some apparent differences in morbidity between standard regions, based on a single year’s data, may be attributable to sampling variation.5 METHOD
In the present study the sampling error of G.H.S. morbidity data has been reduced, and hence the accuracy increased, by combining data for two years. Morbidity information from the G.H.S. is not available for R.H.A.s, but is available for the standard statistical regions of England and Wales. Comparisons between age and sex standardised morbidity data and age and sex standardised mortality data for the combined years of 1972 and 1973 were carried out for the 10 standard regions. All data were age and sex standardised by the direct method with the 1971 census population for England and Wales as the standard. The direct method of age-standardisation was chosen in preference to the indirect method since no adequate standardising-rates for morbidity from an external population were available. Direct age-standardised mortality-rates provide essentially the same results as S.M.R.S, since the rank ordering of the standard regions and the variation between them are identical. The following morbidity indicators from the G.H.s. for 1972 and 1973 combined were used:
Acute sickness
(including
the exacerbation of chronic sickor in-
ness)-restriction of normal activities because of illness jury during a two-week reference period.
Bed sickness-acute sickness necessitating a stay in bed during a two-week reference period. Chronic sickness-a state of long-standing illness, disability, or infirmity. Work or school absence-acute sickness necessitating time off work or school, during a two-week reference period (this includes uncertificated absence).
an
45. Purola, T., Kalimo, E., Sievers, K., Nyman, K. The Utilisation of the Medical Services and its relation to Morbidity, Health Resources and Social Factors: a Survey of the Population of Finland Prior to National Sickness Insurance Scheme. Helsinki, 1968. 46. Purola, T. Kalimo, E., Nyman, K. Health Service Use and Health Status under National Sickness Insurance: an Evaluative Re-survey of Finland.
Helsinki, 1974. Rowe, R. G., Brewer, W. Hospital Activity Analysis. London, 1972. Logan, R. F. L., Ashley, J. S. A., Klein, R. E., Robson, D. M. Dynamics of Medical Care: the Liverpool Study into Use of Hospital Resources. London School of Hygiene and Tropical Medicine, memoir no. 14, 1972. 49 Culyer, A. J. in Health Economics (edited by M. H. Cooper and A. J. Culyer). London, 1971. 50 Hauser, M. M (editor) The Economics of Medical Care. London, 1972. 51 Powell, J. E. Medicine and Politics: 1975 and After. Tunbridge Wells, 1976. 52 Doll, R. To Measure N.H.S. Progress. Fabian Society Interim Occasional Paper, no. 8. London, 1974. 53 de Kadt, E. New Society, 1976, 36, 525.
47 48
RESULTS
shows the age and sex standardised rates and rankfor mortality and morbidity indicators for the standard statistical regions in the combined years of 1972 and 1973. There are considerable differences in the ranking order. For example, the North West standard region ranks highest for mortality but sixth for acute sickness and fifth for bed sickness. The Greater London Council ranks seventh for mortality but second for acute sickness and third for bed sickness. Application of Spearman’s rank order correlation coefficient’ revealed no significant overall correlation between mortality and acute sickness or between mortality and bed sickness. Fewer large differences in the ranking order were found between mortality and chronic sickness, and the rank order correlation coefficient between these two indicators is signifiTable
i
ing order
cant
(p
