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Funding streams

Funding streams. Wellard's Academy June 2007. Objectives, challenges and hurdles. Objectives Understand primary care funding streams Improve uptake of company products Challenges Get products on to trust formularies Achieve volume potential Hurdles Drug cost implications

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Funding streams

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  1. Funding streams Wellard's Academy June 2007

  2. Objectives, challenges and hurdles Objectives • Understand primary care funding streams • Improve uptake of company products Challenges • Get products on to trust formularies • Achieve volume potential Hurdles • Drug cost implications • Changing customer approaches

  3. Where money comes from

  4. How money flows through the system Taxation (82 per cent) Patient charges (2 per cent) National Insurance (13 per cent) Department of Health Primary care trusts Community services Acute trusts GPs PBC More later!

  5. Commissioning

  6. The provider agrees to deliver a given volume and quality of efficient, effective health services to the purchaser for three years Service level agreements An NHS trust A PCT

  7. Local delivery plans • Three-year plans • PCTs, NHS trusts, SHAs • Services needed • Milestones SHAs collect PCT LDPs to make an area plan

  8. Primary care investment plan (PCIP) • Services • Staff • Premises • IM&T

  9. PCT budgets • Full legal responsibility for finance • Single unified budget from DH • Proportion of health budget to PCTs increasing

  10. PCT budget

  11. Menu Personal medical services ~or~ General medical services GP contracts

  12. Personal medical services Four out of ten GPs prefer PMS • Offers opportunities for local modernisation • Tailored local targets • Salaried GP on short contracts • No out-of-hours

  13. GMS aims • Widen range of services • Meet local needs • Improve quality • Fairer funding • New roles for health professionals • Make primary care an attractive career for doctors • Major overhaul of GP surgeries General medical services GMS applies to 20,800 GPs Funding streams: • Global sum • Quality payments • Seniority payments • Enhanced services

  14. Global sum • Global sum decreases as practices get more income from quality-based elements • Practices must deliver service levels: essential; additional; enhanced

  15. GMS service levels Additional services Offered by most practices • Eg, contraceptive services Essential services Provided by every practice • Eg, general management of long-term conditions Enhanced services Available at some practices • Eg, flu and childhood immunisations

  16. GMS in the future • Contract negotiations continue • Successful practices to provide extended hours • Review MPIG • Money to follow patients if they switch practices

  17. Quality payments Organisational181 points Clinical 655 points Quality and out comes framework Total of 1,000 points Patient experience108 points Plus 20 pointsHolistic care 1 point = average £124.60 in 2005/06 Additional services36 points

  18. Payment by results Encourages acute trusts to manage costs efficiently Fixed price tariff for all treatments across whole NHS Encourages PCTs to treat patients in the community

  19. Payment by results • Cost and volume agreements and healthcare resource groups (HRG) used to adjust funding • Trusts can reinvest surpluses as they see fit

  20. Payment by results Will PBR extend beyond acute hospital care? Do information systems to support extension? Is a tariff based on average NHS cost appropriate? Mixed public-private provider configuration? Care packages?

  21. GP practices commission services Singly or in partnership Practice based commissioning

  22. PCTs decide how much of the savings go back to the practice Practice based commissioning PCT professional executive committees make these decisions

  23. PBC progress • Fears that PBC would lead to cherry picking of easy cases seem to be unfounded • Uptake at 96 per cent • Some confusion in practices

  24. More information • PBR and PBC are complex topics. www.wellards.co.uk offers courses and presentations with more detail, and a set of PBC case studies based on interviews with practices around the country.

  25. NHS trusts Practice-based commissioners Primary care trusts Education and training Acute trusts get their money from… NHS sanctioned R&D Income generating schemes

  26. Pricing the service • Trusts price their services according to the following criteria: • for NHS service agreements, prices must equal costs • no cross-subsidisation between services • trusts to achieve 1% efficiency savings year on year

  27. Prescribing budget Hospital medicines spend = 20% of NHS total Drug expenditure = 3-4% of hospital budget Drugs budget decentralised to clinical directorates: Budget under severe pressure because: • difficult to control • grows rapidly as new and more effective products become available

  28. Members • Prescribing advisers • Hospital consultants • GP prescribing leads • Hospital chief pharmacists Area prescribing committees • Produce primary/secondary care treatment guidelines • Common policies for continuing in the community regimes started in hospital • Decide which drugs to be monitored by hospital staff

  29. Drug and therapeutics committee Members • consultants in major specialties • chief pharmacist • formulary pharmacist • local pharmaceutical advisers Approves major changes to formulary Enforces compliance with formulary

  30. When drugs get more money • Recommended by NSF • Recommended by NICE • Save money on equipment • Eg, photodynamic therapy for age central blindness. NICE guidelines on it also DH issued instructions – PCTs should have made provision and funded separately

  31. Formulary and fund flow: directorate example Consultant makes application to DTC DTC inspects application form: • Why it's better • What it's replacing • Cost • Patient numbers per month • Clinical evidence • Where role of treatment • First line/last line, etc Turned down because evidence lacking Recommend to use if finance cleared

  32. Formulary and fund flow: directorate example Recommend to use if finance cleared Band 1: £5,000 p.a. Directorate funds Three funding bands Band 2: £5,000-£10,000 p.a. Need to secure funds Band 3: More than £10,000 p.a. Need to secure funds

  33. Implications • Important for the NHS — important for you • Understanding commissioning, contracting, purchasing, procurement and financial flows will allow you to work out how to best obtain the funding required for your new medicines • Where do existing medicines fit in? • New customers? • And finally… note that PBR, HRGs and tariffs are still a bit mysterious even to the local NHS

  34. www.wellards.co.uk

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