Tory funding shift to target elderly population

NHS Funding - Economists say Conservatives 'misunderstand' funding formula, but plans win some GP support.

Experts have questioned the viability of Conservative plans to rewrite the NHS funding formula to redirect cash to areas with large elderly populations.

Shadow health minister Mark Simmonds told GP last week: 'There is a direct correlation between the age of a population and the burden of disease that is not reflected in the current formula.'

He accused Labour of 'deliberately over-emphasising socio-economic deprivation... to transfer resources to their urban heartlands'.

A Conservative government would take such decisions out of ministers' hands and transfer them to an independent NHS board, he said.

But health economists said there was 'no evidence' areas with large elderly populations were underfunded. They noted that the formula that distributes money to PCTs was designed by the independent Advisory Committee on Resource Allocation.

John Appleby, chief economist at the King's Fund, said that Tory figures which purported to show fivefold variations in spending on certain treatments largely reflected the cost of running health services in different parts of the country.

'I would not jump immediately to the conclusion that the formula is biased against areas with more elderly people,' he said. 'The weighted capitation formula is possibly the most sophisticated way of allocating public money in the world.'

Matthew Sutton, professor of health economics at the University of Manchester, agreed that the Conservatives had 'misunderstood' the formula. 'I have seen no evidence of the need to redistribute money to areas with higher elderly populations.'

The allocation formula is designed with two aims: to share cash fairly on the basis of population need, and to reduce 'avoidable health inequalities'.

The Conservatives have hinted they would cut the inequality target, added in 1999.

Many on the front line in rural areas have welcomed the pledge to rewrite the formula.

NHS Alliance GMS contract lead Dr David Jenner, who practises in Devon, said he was 'all for' such a shift. The director of public health at one northern PCT suggested it would end the situation in which neighbouring urban trusts found it easier than his own to fund new treatments.

GPC negotiator Dr Peter Holden said he believed age was under-represented in the formula, citing the shortage of funding in elderly Suffolk.

But he added: 'Changing the formula is fine if there is money that is not committed. But every pound is committed.'

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