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The Minister for Health Stephen Donnelly TD today published, ‘Towards Population Based Funding for Health: Model Proposal’ as part of the 2022 Spending Review process.

A new population-based resource allocation (PBRA) model is a core component of Regional Health Area (RHA) implementation This Spending Review contributes to the evidence required to support decision making on the most appropriate population-based funding model to implement. PBRA is a funding model for health planning that seeks to distribute available healthcare resources according to population need in order to promote efficiency and equity in both health outcomes and distribution of resources. As envisaged in Sláintecare, this reform will help deliver greater efficiency and equity in our health service, facilitate a move towards a more population-based approach to health service planning and funding, and will enable us to better address the health inequalities that exist in our health system.

The purpose of this Spending Review is to further contribute to the evidence building required for the consideration of the most appropriate PBRA model to be implemented in 2024. This Spending Review is one of a range of inputs which will inform the final PBRA model. Informed by the findings of an earlier Spending Review, this paper proposes a preliminary PBRA model for implementation and provides indicative results.  

This paper recommends the use of a needs-adjusted capitation model to allocate funding to the new RHAs to be established as part of the Sláintecare reform. The model proposed adjusts RHA populations by an Age-Sex Index, a Deprivation Index, and a Rurality Index. The results of the PBRA model applied in this paper point to indicative ‘guide’ PBRA expenditure shares being broadly similar to the current budget allocation by RHA.  This is particularly true with regard to the large expenditure programmes of Acutes, Older Persons, Mental Health, and Primary Care. 

In line with international best practice, it is recommended that a permanent Advisory Group for the design and monitoring of the PBRA be established. It is recommended this group is chaired by the DoH, and comprises members of the HSE, RHAs, DoH, Central Government, as well as academic experts in the area of health resource allocation models. This group should be supported by an appropriate secretariat. All the work of this advisory group should be made publicly available in the form of detailed reports on the formula/methodology and data used. The establishment of such groups will allow for refinement of the model as part of the ongoing Implementation Plan.

Minister for Health, Stephen Donnelly TD, welcomed the publication saying: 

“I’m happy to announce the publication of ‘Towards Population Based Funding for Health: Model Proposal’. Population-based funding is an important component of the reform of our health system. PBRA is the mechanism through which funding will be allocated to the new Regional Health Areas. Properly designed, it can support better corporate governance and clinical responsibility, while empowering local decision making and innovation. The paper is an important step in understanding how population-based funding can play a role in improving the equity and efficiency of healthcare. I welcome this IGEES paper as part of the expanding evidence base to support decision making in health.”

ENDS 

NOTES TO EDITOR

Overview

• The Irish healthcare system is undergoing substantial reform with a commitment to implement new Regional Health Areas (RHAs) with a Population-Based Resource Allocation (PBRA) model by 2024. 
• PBRA is a funding model with the objective of fairly distributing available funding between RHAs according to the relative needs of their populations and the relative cost of providing health and social care services to meet those needs.
• PBRA has been approved by Government in the Sláintecare Action Plan 2021 - 2023 and as part of the Business Case on Regional Health Areas. Its introduction is also a recommendation of the OECD’s Economic Survey of Ireland. A forthcoming Implementation Plan will be subject to approval by Government. 

Contribution

• The purpose of this Spending Review is to further contribute to the evidence building required for the consideration of the most appropriate PBRA model to be implemented in 2024.
• Informed by the findings of Johnston et al., (2021), and McCarthy et al., (2022), this paper proposes a PBRA model for implementation and provides indicative results.   
• This paper demonstrates preliminary results showing the share of expenditure going to each RHA by programme level from 2016 – 2021, and ‘guide shares’ derived from the model.
• It also presents recommendations as to how PBRA should be governed and managed.

Key Findings

• This paper recommends the use of a needs-adjusted capitation model to allocate funding to the RHAs. The model adjusts RHA population shares by an Age-Sex Index, a Deprivation Index, and a Rurality Index.
• Data sources include Census 2022, HSE Expenditure Data, Pobal HP Deprivation Index, and Age-Cost data.
• It is recommended that only HSE Acutes and Community expenditure be subject to the PBRA over the short to medium term.
• The results of the PBRA model applied in this paper point to ‘guide’ PBRA expenditure shares being similar to the current budget allocation by RHA.

Recommendations

• Based on international best practice, several recommendations are made regarding the governance, management, and updating of the PBRA model.

• • A permanent Advisory Group for the design and monitoring of the PBRA model be established. Chaired by DoH and comprise a variety of stakeholders.
  • A functioning Secretariat should be established to conduct in-depth analysis and assist in continuous improvement of the model.
  • All work related to PBRA Advisory Group should be made publicly available and accessible in the form of detailed published reports.