priority settings

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Priority setting

A series of publications that aims to help organisationsreview their current priority-setting processes and, if needed, provide a reference document for PCTs whostill have to develop a comprehensive priority-settingframework.

Priority setting: an overview

Date: 2/10/2007

This is the first in a series of publications which aims to help organisations review theircurrent priority setting processes and, if needed, provide a reference document for PCTswho still have to develop a comprehensive priority setting framework. more

Priority setting: managing new treatments

Date: 15/2/2008

The second report in a series of publications that aims to helporganisations review their current priority-setting processes and, if needed, provide a reference document for PCTs who still have todevelop a comprehensive priority-setting framework. more

Priority setting: managing individual fundingrequests

Date: 17/3/2008

This report is the third in a series of publications aiming to helporganisations review current priority-setting processes and, if needed, provide a reference document for PCTs who still have todevelop a comprehensive priority-setting framework. more

Priority setting: legal considerations

Date: 20/3/2008

The fourth in a series of publications that aims to helporganisations review their current priority-setting processes and, if

needed, provide a reference document for PCTs who still have todevelop a comprehensive priority-setting framework. more

Priority setting: strategic planning

Date: 17/4/2008

This is the fifth in a series of publications that aims to helporganisations review their current priority setting processes and, if needed, provide a reference document for developing acomprehensive priority setting framework. Report more


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Supported by:


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The NHS Confederation is the independentmembership body for the full range of organisations that make up the modern NHS. Wehelp our members improve patient care and publichealth, by:

influencing policy, implementation and thepublic debate

supporting leaders through networking, sharinginformation and learning

promoting excellence in employment.

The Primary Care Trust Network is part of the NHSConfederation.

For further details of the Primary Care TrustNetwork, please visit

www.nhsconfed.org/pctnetwork or contact David Stout on 020 7074 3322or at [email protected]

The NHS Confederation29 Bressenden PlaceLondon SW1E 5DD Tel 020 7074 3200Fax 0870 487 1555Email [email protected]

The voice of NHS leadership

Registered Charity no. 1090329Published by the NHS Confederation

The NHS Confederation 2007 This document may not be reproduced in wholeor in part without permission.ISBN 978-1-85947-143-2BOK 58401


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Contents

Introduction 2

Why is priority setting so important? 3

How to build up a priority setting framework 5

Agreeing the key principles 8

Conclusion 12

The author 13

Acknowledgments 14

Glossary 15


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Priority setting: an overview02

Introduction

The Department of Health has begun a push tocreate world-class commissioning and isdeveloping a range of tools, approaches, outcomemeasures and competences to support this. Thisinitiative is the most serious attempt to repositioncommissioning as central to the way the NHSoperates since the introduction of the purchaserprovider split in 1990. The NHS Confederationwelcomes this initiative and the Primary Care TrustNetwork is fully engaged in influencing policy inthis area.

One of the key skills that any commissioner willneed is the ability to identify priorities. It is still thecase that a large amount of the resourcescommitted reflect historic patterns of provision, theparticular approach of local providers or evenindividual clinicians. To change this there will be a

need for high-quality, evidence-based andsystematic decision making to support thedevelopment of the commissioning plan and tofeed into the annual contracting round.

In addition, the number of high-cost treatmentsand increasingly vocal interest groups makes thetask of allocating resources one of the most

politically sensitive and complex issues facing anypart of the NHS.

The purpose of this report, and the series of Briefingsthat follows it, is to support thedevelopment of decision making in this difficultarea. Although it is aimed primarily at those directlyinvolved in resource allocation, the series shouldalso be helpful to a wider audience includingproviders and policy makers.

The series has been written by practitioners in thefield and so are based on experience in thisevolving field. The evidence base is still in an earlystage of development, so this should still beregarded as work in progress and primary caretrusts will need to develop their own approach tothis area.

Improving the quality and transparency of decisionmaking, involving the public, patients, providersand other stakeholders, and building the capacityof commissioners to take and then implementthese decisions will be an important task over thenext few years as we work towards a moreworld-class vision of commissioning.


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Priority setting: an overview 03

Need and demand for healthcare always exceedsthe funding that is available to the NHS. Thisrequires PCTs to prioritise needs into those that willbe met and those that will not. The challenge liesin arriving at fair decisions which properly balancecompeting needs. Being aware of theconsequences, or the opportunity costs, of differentfunding options is crucial to this process. What isfunded and what is not funded are different sidesof the same coin and cannot be separated.

Characteristics of robust prioritysetting

There are some characteristics which can beobserved in commissioning organisations whichhave good priority setting processes. Organisationsthat demonstrate these characteristics are, in the

experience of the author, better placed to cope withmany of the challenges and threats to fair prioritysetting. The characteristics are outlined below.

1. A sound grasp of priority settingOrganisations which have a coherentunderstanding of priority setting, includingknowledge of the law, reduce uncertainty andrisk and are more robust to challenge.

2. Organisational cohesion

Cohesion results when there is a sharedunderstanding of how priority setting will bedone in the PCT and when all individuals andgroups within the PCT act in accordance withthat understanding. This leads to a high degreeof consistency in decision making.

3. Consistent behaviourA good way to influence clinicians and trusts isfor the organisation to be predictable in itsresponses. This is particularly the case in relationto the management of individual fundingrequests. Organisations which have adoptedconsistent messaging and behaviours frequentlyreport a fall in the number of requests.

Why is priority setting

so important?

Rationale for achieving robust and fairresource allocation

it improves the overall health and wellbeing of the population

it aligns investment to pre-agreed strategies,priorities and policies

it is more ethical because it gives competingneeds a fair hearing

it is a requirement of good corporate governance

it increases public and patient confidence

it adds legitimacy to decision making

it helps achieve financial balance

it provides better value for money it reduces the risk of successful legal challenge

it is operationally more efficient.


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4. The adoption of protocol-drivendecision makingPCTs, like clinicians, come across the samescenarios time and again. Good commissioningpractice, like good clinical practice, is policy andprotocol-based. Organisations which adopt thisapproach have better documentation whichleaves a more thorough audit trial. This all addsto consistent, efficient and timely decisionmaking. Despite concerns that might exist to thecontrary, protocol-based decision making doesallow organisations to respond to unique andunusual individual need.

The importance of consistency inpriority setting

The need for consistency is one of thecornerstones of good practice.

Consistency in word PCTs need to communicate

consistent messages both internally and externally. To do this individuals and committees within thePCT should be familiar with their organisationspriority setting framework and adopt a commonlanguage in relation to priority setting.

Consistency in action PCTs need to respond tothe same situation in the same way every time.Becoming predictable to those outside the PCT isdesirable and is achieved by the PCT doing what itsays it is going to do. To deliver consistency in

action, procedures need to be put in place andstrictly adhered to. Procedures for dealing withemergencies or unusual circumstances can beagreed in advance so they need not be managedon the hoof.

Consistency in decision making PCTs need toapply the principles they have adopted and referto the factors they have decided to take intoconsideration to all priority setting undertaken bythe PCT.

Despite concerns to the contrary, protocol-based decision makingallows organisations to respond tounique individual need.


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Figure 1: Steps in developing a priority setting framework


Figure 1 illustrates how, by taking a number of clearly defined steps, a PCT can build up a prioritysetting framework by ensuring each of the keyelements is given careful consideration. Each stepis described on the following pages.

How to build up a priority

setting framework

Step 1Agree key principles to underpin priority setting, and the factors which

will be taken into consideration, and draw up a list of goodpractices required by the law

Step 2Develop and establish priority setting structures and processes

Develop adedicated strategic

plan to developpriority setting

Considermanpower

resources

Step 3Consider how to approach a range of issues related to key

relationships with stakeholders

Step 4Produce key policy documents

Step 5Develop tools to aid decision making

Decision making

Decisions


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Step 1: Agree key principles tounderpin priority setting

The first step is to consider the key principles(values, rules and assumptions for example,equity) and key factors (determinants, parametersand considerations for example, clinical

effectiveness) that the PCT will take into accountwhen making decisions. Another task is tounderstand and set out good practice. Step 1 isheavily influenced by the law.

Step 2: Develop and establish prioritysetting structures and processes

The second step is to map out how the PCT willdeliver decision making. This requires considerationof operational issues: the policies that are neededto support decision making, the structures andprocesses to be put in place and how decisions areto be documented. This is a detailed task. Thingsthat might be covered include:

which decisions individuals can make and whichdecisions groups should make

the constitution of decision-making bodies

the role of bodies such as overview and scrutiny

committees, clinical networks and patientgroups, and the status of their recommendations

the role and responsibilities of provider trusts inrelation to prioritisation and resource allocation

setting out dates for key milestones of the annualcommissioning round.

Step 3: Consider how to approach arange of issues related to keyrelationships with stakeholders

The third step is to consider a group of issueswhich can loosely be put under the umbrella of relationships. These include:

patient and public engagement communications with patients and carers

working with clinicians, providers and other PCTs,and the role of the NHS Contract

responding to queries from politicians, theDepartment of Health and the media

training and support for decision makers

internal and external audit.

Step 4: Produce key policy documents

It is crucial that each PCT sets out in a singledocument how it will approach resource allocation.For the purpose of this series this will be called theoverarching policy document on priority setting. This should include the principles that the PCT hasadopted, the factors which will be taken intoaccount when making a decision, the structureswhich will support decision making and a schemeof delegation that sets out which decisions specificgroups and individuals can make.

The overarching policy document should also setout the roles, responsibilities and status of therecommendations of networks, professional bodies,the National Institute of Health and ClinicalExcellence (NICE) and the overview and scrutinycommittee (OSC). It also needs to cover the full

range of decision making related to priority setting,


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including how the annual commissioning roundwill be handled. The author is aware of at least onePCT which had its overarching policy documentapproved by both the local OSC and all the localMembers of Parliament.

There are a number of recurring issues to beusefully addressed as part of this step, through aseries of policy statements. These statements caneither be part of the overarching policy documentor be addressed in a series of supplementarycommissioning policies. Recommended policystatements include setting out the PCTsapproach to:

treatments under consideration in NICEs healthtechnology programme

requests seeking funding for patients coming off

drug trials, and drug company sponsored funding requests from patients who have run out of

private funds for private healthcare treatmentsnot normally funded by the PCT

patients seeking treatment abroad

co-payment which refers to private practicewithin the NHS

experimental treatments

funding research and development.

Step 5: Develop tools to aiddecision making

The fifth step involves the actual decision makingitself and relates mainly to strategy developmentand the annual commissioning round. The aim is todevelop practical strategies and adopt tools to aidthose making the decision. In particular, decisionmaking in the annual commissioning roundpresents some major difficulties. These include:

how to efficiently gather and process largequantities of information

how to systematically assess and compare verydifferent types of services

how to ensure that all individuals contributing tothe decision making have sufficient knowledgeabout all the services and treatments underconsideration

how to spread the information gathering andassessment across the whole year

how to adopt wider involvement that is sustainable

how to fairly and effectively disinvest andredistribute resources.

These are some of the most challenging issuesPCTs currently face and as such are in need of urgent development.

A final consideration

Establishing and maintaining good priority settingrequires an ongoing cycle of development, reviewand quality improvement. It should not be a one-off exercise. PCTs are encouraged to developdedicated strategic and implementation plans forthe development of resource allocation and assess

the manpower and other resource requirements torun both operational and developmental aspectsof priority setting.

The rest of this report will focus on aspects of Step 1.

Establishing and maintaininggood priority setting requires anongoing cycle of development. It

should not be a one-off exercise.


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service developments. Whether the drug isfunded depends on the priority it is given andhow much money is available to the PCT eitherthrough new money or disinvestment. This typeof decision making is referred to as prioritisation .

These two approaches are profoundly different;they ask different questions and require differentfactors to be taken into account.

There are good grounds to argue that the secondapproach is the method that should be adopted bypublic authorities, because:

it allows all needs to be given a fair hearing

it discourages queue jumping and is better ableto resist pressure from special interest lobbygroups and pharmaceutical companies

it requires the decision maker to look at thewhole of healthcare and not just an isolatedhealthcare intervention

it forces the decision maker to consider theconsequences of their decisions, because itdemands that the opportunity costs are considered.

Singular decision making is commonly appliedto decision making around drugs and newtechnologies. Indeed, it is probably the case

that clinicians, patients and the public expectdecisions to be taken this way. But at the sametime, funding issues related to such things asinvestments in specialist nurses or whole newservices are generally referred to the annualcommissioning round. This is the case even whenthey represent better health gain than any of thenew drugs or technologies under consideration. This creates an ethical dilemma as it means thatthe system is allowing a subset of fundingdecisions to be taken on a completely differentbasis and one which is seen to sanction a disregardfor opportunity cost.

Taking a whole-system approach

The current focus of priority setting is in relation tonew treatments, particularly drugs, and individualfunding requests. A whole-system approach is,however, needed. So, to begin with, the prioritysetting framework has to be relevant andapplicable to all areas of activity which involve prioritisation. These are:

developing healthcare strategies and timetabledimplementation plans

deciding how the budget will be allocated,including the redistribution of resources

managing in-year service pressures andproblems, including demand management

dealing with individual funding requests.

The framework also needs to incorporate bothinvestment and disinvestment .

The primacy of prioritisation

One of the first and most fundamental issues toconsider is how important is the process of prioritisation to achieve fair resource allocation. The obvious answer is that it is essential. But

prioritisation is frequently bypassed in the NHS.

Currently, two very different approaches to decisionmaking are used in the NHS. Take, for example, anewly licensed drug. The decision maker can either:

focus only on the drug, assess it and make adecision to fund, partially fund or not fund. Thistype of decision making is referred to as singulardecision making ; or

assess the drug against certain criteria andprioritise its importance by comparing it withexisting services and other potential competing

Agreeing the key principles


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If organisations strive to distribute resourcesfairlyand if they are of the view that considerationof opportunity cost is essential to that process,then they must construct their decision makingin ways that reflect this. It is suggested, therefore,that the primacy of prioritisation be afundamental principle of public sector resourceallocation. Currently this translates into the primacyof the annual commissioning round although asother vehicles for priority setting emerge thismight change.

This principle has major implications for themanagement of individual funding requests (asopposed to dealing with unique individualcircumstance) and the management of in-yearservice pressures as we will see in a later Briefinginthis series. It also requires considerable

organisational commitment to implement becauseof the external pressures to fund treatments towhich all PCTs are subject to on a daily basis. But tofund requests for new treatments without regardto prioritisation seriously undermines both the PCT and fairness.

Understanding the legal framework within which PCTs operate

PCTs must understand the law within which theyhave to operate. The relevant acts are the NationalHealth Service Act and the Human Rights Act. Inaddition, the PCT should be familiar with therelevant case law arising from judicial review.

While the law is commonly perceived to beabsolute, it is very much a mixture of reasonablePCT discretion and judicial instincts about fairnessand justice. The law is a complex and evolving areaand PCTs should strive to understand their basicrights and duties to patients.

Openness and accountability

In considering what is required of the PCT by wayof openness and accountability, the NHS Act andnational policy in relation to patient and publicinvolvement will need to be taken into account.Within this there are absolute requirements whichPCTs are bound by law to implement. There arealso more discretionary and developmentalelements such as involving more stakeholders inthe priority setting itself.

Dos and donts

A detailed knowledge of the law can enable anorganisation to draw up a dos and donts list forpriority setting. Judicial review, in particular, isinterested in reasonableness and procedural fairnessand not necessarily the outcome of the decision.

Some aspects of good practice will be given in thisseries of publications but they cannot becomprehensive.

Agree a list of considerations which

will be taken into account whenmaking decisions

As well as key underpinning principles whichmight be set out in a PCTs mission statementand the primacy principle, the PCT will alsoneed to generate a list of considerations whichit will take into account when making a decision. There are no right or wrong answers but it hasalready been seen that this list is likely to bemade up of a combination of principles andfactors. This is adifficult task and some points of caution are needed.


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Firstly, the PCT should resist any attempt to simplyimport this list from examples of good practiceelsewhere. To become embedded in localcommissioning culture it is vital that the principlesand factors are owned by all members of the PCT and by wider stakeholders (especially patients andthe public) in the local community. It is worthspending time and effort working withstakeholders to determine the values that they feelshould underpin prioritisation and resourceallocation given that resources are finite anddifficult choices have to be made.

Secondly, the list has to apply in all settings;therefore, the PCT needs to take into account thefull range of funding issues that it regularly faces. The risks of developing frameworks only in thecontext of individual funding requests is that these

frameworks commonly omit key considerationssuch as clinical and service risks and quality issues(some of which might not represent any healthgain at all). The role of risk assessment in decisionmaking is probably more important than iscommonly recognised. An example of a service risk which many commissioners will recognise is theneed to invest in additional staff in a criticalshortage specialty where a lack of investmentwould lead to a loss of staff, the result of whichmight lead to the population having no localservice at all.

Finally, focusing only on individual fundingrequests risks developing a framework that doesnot retain a population perspective, therebycreating the ethical dilemma, once again, of havingthe organisation allocate resources using differentcriteria in different settings. For example, the casefor funding individual patients is frequentlypresented in terms of medical ethics and the

principle of the duty of care to individuals.However, it is questionable whether the principles

Figure 2. Common factors which

PCTs take into account whenallocating resources

nature of the health gain

confidence in the clinical evidence

number of individuals benefiting

cost effectiveness

need to redress inequalities and inequitiesof access

accessibility

national priorities

stated local priorities

clinical risk

service risk

absolute cost of the development

legislation and directives

patient choice.

of patient autonomy (the right of patients to makedecisions about their medical care), beneficence(provide benefit and not withhold benefit) andnon-maleficence (do no harm) are appropriate inthis situation. This is because the principles focusthe decision on the patients ability to benefit andgive precedence to the values of the individualpatient. Although these are relevant considerations,they cannot solely determine the outcomebecause the interests of other patients should alsobe considered.

A list of factors which frequently appear in PCT documents are listed in Figure 2, not necessarily inorder of importance.


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The list the PCT finally arrives at and the weightingswhich may be given to each item is a key output of Step 1. An example is shown in Figure 3.

Figure 3. An example of stated principles underpinning resource allocation

We will prioritise options for funding against the following framework:1. Health outcome we will prioritise interventions that produce the greatest benefit for our population.2. Clinical effectiveness we will prioritise interventions with sound evidence of effectiveness.3. Cost effectiveness we will prioritise interventions which yield the greatest benefit relative to cost

of provision.4. Equity we will prioritise on the basis of clinical need, not on the basis of age, gender, ethnicity

or lifestyle.5. Inequalities we will prioritise to ensure full access to existing pathways for the majority over funding

for new or experimental technologies for the minority.6. Access we will prioritise delivery of care as close to the patient as possible, where this meets

governance standards.7. Patient choice will be considered whenever possible. Patients will be given informed access toappropriate options. We will not, however, fund treatment for one patient that could not be offered toall patients with equal clinical need.

8. Disinvestment we will review existing services to ensure diversion of resources from less effective tomore effective services wherever possible.

9. Quality we will aim to commission and monitor services against agreed quality standards.10.Affordability we recognise that not all interventions with evidence of clinical and cost effectiveness

will be affordable from fixed budgets. Further prioritisation may be necessary in line with national andlocal strategies and health needs assessment.

In addition, the PCT has adopted the primacy principle, expressed as follows:

The local delivery plan (LDP) is the mechanism through which investment and disinvestment decisionsare taken.

Interventions recommended in NICE technology appraisals will be implemented only on publication of guidance unless previously prioritised through the LDP round.

We do not expect to introduce any healthcare intervention in-year outside this process sinceto do so will take resources from identified priorities.

Adapted from Warwickshire Primary Care Trust, Commissioning principles, January 2007


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Resource allocation and priority setting is a vitalfunction, the responsibility for which rests withPCTs. Much progress has been made over the yearsand more can be anticipated. There is, more thanever, a need for PCTs to ensure that they carry outthis task to the best of their ability and work in a

systematic way towards ongoing improvement. The challenges facing the NHS in relation toscarcity of resource are best met with PCTs workingcollaboratively, both between themselves and withtheir own local community.

Conclusion

Key action points

When developing a priority setting framework be systematic, work through all elements and consider allequally important.

Develop a framework which will be applied to all priority setting in the PCT.

Make priority setting a major workstream of the PCT in its own right.

Secure sufficient resources within the PCT to undertake both routine and developmental aspects of resource allocation.

Draw up a set of good practice guidelines in relation to decision making or ask your lawyers to do it foryou.

Give very careful consideration to the primary principle and its implications. If adopted then commit to it.

Agree the important principles and factors which will inform decision making.

Produce a document that describes how resource allocation will be undertaken by the PCT and, if possible, get this approved by the overview and scrutiny committee and local MPs.

Assess the PCTs knowledge and understanding of the law.

Adopt the policy that legal training should be mandatory for certain posts and arrange training days asrequired.

Contract with your lawyers to provide legal updates and make recommendations if changes to policiesand processes are needed.

Although legal advice is expensive, agree who can access legal advice, under what circumstances and thetiming of access. The aim should be to prevent serious problems arising and therefore advice shouldalways be sought sooner rather than later.


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Dr Daphne Austin BSc MBChB FFPHM

Dr Daphne Austin is a consultant in public healthmedicine, currently working for the West MidlandsSpecialised Commissioning Team. Dr Austin has anextensive background in public health, spanning17 years. Dr Austin established the UK Commissioning Public Health Network, whichshe currently chairs.

The author


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This series has emerged from an ESRC fundedseries on managing scarcity in healthcare, run byProfessor Cam Donaldson. It has been funded by agrant from the NHS Institute for Innovation andImprovement.

The author and the NHS Confederation would liketo thank the following people for their input andinvolvement with this series of publications:

Professor Cam Donaldson and the UK Forum forPriority Setting in Healthcare

Professor Chris Newdick Claire Cheong-LeenDr Henrietta Ewart

Acknowledgments


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Resource allocation the task of deciding howhealthcare resources are to be allocated. Thisusually refers to financial resources but can alsorefer to the deployment of manpower.

Priority setting / prioritisation the task of determining the priority to be assigned to a service,a service development or an individual patient at agiven point in time. Prioritisation is neededbecause claims (whether needs or demands) onhealthcare resources are greater than the resourcesavailable.

Service development a catch-all phrasereferring to anything that needs investment. Itrefers to all new developments including: newservices; new treatments, including drugs; changesto treatment protocols which have cost

implications; and changes to treatment thresholdsand quality improvements, such as reducedwaiting times. It also refers to other types of investments which existing services might need,such as pump-priming to establish new models of care, training to meet anticipated manpowershortages and implementing legal reforms.

Service disinvestment the mirror image of service development.

Priority setting processes all the things neededto support priority setting, such as structures,policies, protocols and processes.

Rationing a consequence of priority setting.A patient can experience rationing in many ways,including being denied access to a treatment orservice, experiencing a delay or poor qualityservices which impact on the clinical outcome. It isadvisable not to use the term rationing as a verb;

to do so is to imply that rationing is an optionalactivity. All positive decisions to fund areinextricably linked with a rationing consequencesomewhere in the system.

Affordability the ability to do somethingwithout incurring financial risk or unacceptableopportunity cost. It is ultimately determined by thefixed budget of the PCT.

Opportunity cost arises from alternativeopportunities that are foregone in making onechoice over another.

Annual commissioning round the process bywhich new money coming into the NHS isallocated. The process has undergone manychanges over the years but key elements of theprocess have remained unchanged. Fundingdecisions follow an annual cycle. Servicedevelopments are gathered and assessed duringthe autumn. Once PCTs are confident of the size of additional funding (usually known in December)

priority setting intensifies. Final decisions have tobe before the end of the year to ensure that newcontracts can be placed with providers of healthcare for the new financial year which startson 1 April. This annual process sits within a longerterm strategic planning process. For the purposesof this series of publications this process will beknown as the annual commissioning round.

Glossary


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This report is the first in a series of publicationswhich aims to help organisations review theircurrent priority setting processes and, if needed,provide a reference document for PCTs who stillhave to develop a comprehensive priority settingframework.

It is hoped that the series will also promoteunderstanding and debate amongst a wideraudience, particularly providers of healthcarewho have always undertaken prioritisation, atboth patient and service level, albeit lessexplicitly.


Further copies can be obtained from:

NHS Confederation Publications Tel 0870 444 5841 Fax 0870 444 5842Email [email protected] visit www.nhsconfed.org/publications

NHS Confederation 2007 This document may not be reproduced in wholeor in part without permission

15

ISBN 978-1-85947-143-2

BOK 58401

The NHS Confederation29 Bressenden Place London SW1E 5DD Tel 020 7074 3200 Fax 0870 487 1555Email [email protected]

Registered Charity no: 1090329


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For further details of the Primary Care TrustNetwork, please visitwww.nhsconfed.org/pctnetwork or contact David Stout on 020 7074 3322or at [email protected]

The NHS Confederation

29 Bressenden PlaceLondon SW1E 5DD Tel 020 7074 3200Fax 0870 487 1555Email [email protected]





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Contents

Introduction 2

What is judicial review? 3

Duties of the Secretary of State 4

Duties of PCTs 5

The National Institute for Health and Clinical Excellence 8

Prescribing rights under the GMS Regulations 9

European law 10

Human rights law 11

Judicial review proceedings 12

Conclusion and key action points 14

The author 15

Acknowledgments 15

References 16

Further reading 17


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Priority setting: legal considerations 03

1. IllegalityA claim that a decision is illegal contends that thePCT has acted outside its statutory powers. This canbe difficult to determine because words in statutesare sometimes ambiguous. In these cases, thewords may confer discretion on the public authorityas to how they should be interpreted. An exampleof an illegal action would be for a PCT to ignore adirection from the Secretary of State to fund atreatment (see the section on NICE, page 8).

The principle of illegality also now includes theHuman Rights Act 1998 (see page 10.)

2. IrrationalityA claim that a decision is irrational contends thatthe decision maker has considered irrelevantfactors, excluded relevant ones or givenunreasonable weight to particular factors.Irrationality is considered on page 5 in thediscussion of R v NW Lancashire HA.

The courts respect the discretion of decision makersto reach their own conclusions, provided they arereasonable. The court does not look for a correctsolution, or one with which the court agrees. But itmust be within a range of reasonable solutions.

Recently, the courts have become more intense intheir scrutiny of PCT decisions. Whereas until themid-1990s they tended to accept without questionthe rationality of health authority decision making,today judicial review is more rigorous. This meansthat a PCT must demonstrate that it has properlyconsidered all the relevant factors and come to areasonable conclusion. This usually means grantingaccess to PCT documents and minutes of meetings.

What is judicial review?

Judicial review is a mechanism for scrutinising thelawfulness of public authority decision making.It gives the courts power to examine whether apublic authority has exercised its powers lawfullyand reasonably within the parameters of thestatutory authority conferred on it. Judicial reviewdoes not normally involve claims for damages.

The two most likely reasons for legal action againstPCTs are:

major changes to services

refusal to fund treatments for individual patients.

A successful challenge in judicial review does notnormally secure the claimant access to thetreatment in question. Instead, the original PCT decision is nullified and referred back to the trust to

be taken again in the light of the courtsobservations. In such a case, although it is stillpossible for the PCT to reaffirm its original decision,many concede the claim. Of course, rational andresponsible priority setting will be undermined if PCTs concede every challenge and fundlow-priority treatments.

What are the grounds for judicialreview?

There are three grounds for judicial review, namelythat the decision taken was one or more of thefollowing:

illegal

irrational

procedurally improper.


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Priority setting: legal considerations04

3. Procedural improprietyA claim that a decision is procedurally defectivemay contend that the PCT has misunderstood astatutory procedural duty . Examples would be afailure under section 11 of the Health and SocialCare Act 2001 to consult patients and the publicabout service changes, or coming to a firmconclusion before consultation is complete.

But procedural impropriety may also apply todecisions relating to the PCTs individual fundingrequest panels. If a decision of the panel will affectsomeones interests, that individual is entitled toknow what factors are being considered, have theopportunity to make representations in writing andbe reassured that the panel is independent.

Procedural impropriety also concerns whether PCTshave followed their own policies and proceduresreasonably and consistently.

The organisation of the NHS is governed by theNational Health Service Act 2006. Section 1 of theAct requires that the Secretary of State for Health:

Must continue the promotion in England of acomprehensive health service designed to secureimprovement (a) in the physical and mental healthof the people of England, and (b) in the prevention,diagnosis and treatment of illness.

This is not an absolute duty to provide NHStreatment. Considering the nature of this duty, the

Court of Appeal said in R v North and East DevonHealth Authority ex p Coughlan (1999)1:

When exercising his judgment [the Secretary of State] has to bear in mind the comprehensiveservice which he is under a duty to promote...However, as long as he pays due regard to that duty,the fact that the service will not be comprehensivedoes not mean that he is necessarily contravening[the Act] a comprehensive health service may never, for human, financial and other resourcereasons, be achievable

Duties of the Secretary of State

If a decision will affect someone'sinterests, that individual is entitled to know what factors are beingconsidered.


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Healthcare resource allocation is not performed bythe Secretary of State personally. This task, and theduty that goes with it, has been delegated to PCTs. 2

This is why judicial review litigation is normallyconducted against PCTs, rather than the Secretaryof State.

In addition to PCTs duty to promote acomprehensive health service, Section 229 of theNHS Act 2006 states:

Each primary care trust must, in respect of eachfinancial year, perform its functions so as to securethat its expenditure does not exceed [its income].

Sections 6668 of the Act also give the Secretary of State power to remove from office those who failin this duty. Board members, therefore, are under

pressure to comply with ministerial instructionsand not to exceed the budget that has beenallocated to the PCT.

So, within their finite allocations, PCTs mustdecide how best to promote a comprehensivehealthcare service. The reality is that need anddemand for healthcare exceeds the resourcesavailable to the NHS. As a result, hard choiceshave to be made between the competing claimsof different patients. The law requires PCTs to

exercise reasonable discretion in deciding howthis is best done.

What is reasonable discretion? A helpful startingpoint is the case of R v North West Lancashire Health Authority ex p A, D & G(2000)3, in which a refusal tofund transsexual surgery was overturned by theCourt of Appeal. The court discussed some of thefactors relevant to reasonable discretion.

1. Differences between PCTs The court confirmed that:

The precise allocation and weighting of priorities isclearly a matter of judgment [for] each authority Authorities might reasonably differ as to precisely where [a treatment] should be placed and as to thecriteria for determining the appropriateness and

need for treatment.

Therefore, postcode variations between PCTs arenot unlawful of themselves. Equally, though, in anational health service wide variations areunattractive. PCTs should be aware of differencesbetween neighbouring trusts and be able toexplain why they are valid.

2. Need for a priorities framework In relation to the priority-setting process, thecourt observed:

It makes sense to have a policy for the purpose indeed, it might well be irrational not to have one

Each PCT should ensure it has a consistentpriorities framework to guide the allocation of itsresources. Throughout this series of priority-settingreports this is referred to as the overarching policy document on resource allocation. This policy

should explain the principles of decision makingin a way that can be easily understood by a layreadership.

Since the statutory duty belongs to the PCT, itcannot delegate this duty. It is, however, reasonableand useful for PCTs to collaborate in developing aframework intended to be consistent across alarger area.

Duties of PCTs


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Figure 1 provides an example of collaborationbetween PCTs. Of course, the discretion permittedto PCTs means that they may differ about similarcases, but the framework of analysis will beconsistent.

Some PCTs have their own priorities committees,while others take advice from clinical networks.Neither are statutory bodies and they have nostatutory functions of their own. Their role is to makerobust recommendations to the PCT board. Providedthey are authorised to take a broad overview of thelocal health economy and can assess thecompeting claims of its differing sectors, theirrecommendations should normally be respected.A PCT board is at liberty to reject the advice but if itdoes so too often without good reason, thecommittee will quickly cease to be useful.

Priorities committees must provide a fair balance of managerial and clinical interests. If the processbecomes too corporate and unable to weigh andbalance the clinical meritsof a case, it will becriticised for under-valuing, or ignoring, relevantaspects of the decision, and for being irrational. Theneed for proper balance between managers andclinicians should be dealt with in the committeesstanding orders.

3. Absence of robust evidence of effectivenessMany treatments do not have the benefit of evidence from randomised controlled trials, or aretoo new to have been fully evaluated. Also, it maybe difficult to conduct robust trials because of small patient numbers or lack of sponsorship.However, this does not justify an outright ban on atreatment. A reasonable clinical case in favour of atreatment must be met by a reasonable caseagainst if the PCT is deciding not to fund it. As theCourt of Appeal said in the case of A, D & Gabove:

Making choices between competing claims is adifficult and sensitive task because someone isgenerally dissatisfied and may be hostile to theoutcome. For example, the court said inconnection with transsexual surgery:

It makes sense that an authority would normally place treatment of transsexualism lower in its scaleof priorities than, say, cancer or heart disease or kidney failure.

However, if decisions like these are required, it iscrucial that they can be justified against aframework that is transparent and treats patientsequally, fairly and consistently.

The framework helps to manage the introductionof new treatments, the annual commissioning

round and decisions about individual fundingrequests. (See the other reports in this series, whereexamples are given.)

Figure 1. An example of PCTcollaboration in developing apriorities framework

The Thames Valley PCTs have agreed a ThamesValley Ethical Framework.4 This provides a

transparent template within which each PCT mayassess, for example, the introduction of newtreatments. The framework balances:

evidence of clinical and cost effectiveness

the cost of the treatment

the individual need for care

the needs of the community

mandatory national standards (see Further reading).


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The mere fact that a body of medical opinionsupports the procedure does not put the healthauthority under any legal obligation to provide the procedure However,where such a body of opinionexists, it is not open to a rational health authority simply to determine that the procedure has no proven clinical benefit while giving no indication of why it considers that is so.

4. Blanket bans The court was uncomfortable with blanket banson treatment. Judicial review insists that the PCT must consider all the relevant circumstances,including the possibility that the patient hasexceptional needs. In particular, it said:

The more important the interests of the citizen that the decision affects, the greater will be the degree

of consideration that is required of the decisionmaker. A decision that seriously affects thecitizens health will require substantial consideration, and be subject to careful scrutiny by the court as to its rationality.

Therefore, the policy framework must contain aprocedure by which patients may say: I know mytreatment is normally a low priority, but mycircumstances are so exceptional that they deservean exceptional response. This requires theexistence of individual funding request panelscapable of considering the clinical merits of such aclaim. These panels are dealt with in more detail inthe NHS Confederation publication in this series,Priority setting: managing individual funding requests.

For example, in R (Otley) v Barking and DagenhamPCT 5, the patient had colorectal cancer and arguedthat she had exceptional capacity to benefit fromAvastin. The PCT rejected her argument but the

court held that the decision was irrational for notconsidering all the relevant evidence. The court

said that although the PCTs general policy wasrational and sensible, its decision in this case wasflawed because it had not properly considered anumber of factors, including the fact that:

Ms Otley was young by comparison with thecohort of patients suffering from this condition. Her reactions to other treatment, in particular toIrinotecan plus 5FU,had been adverse. Her specific clinical history suggested that her reaction to acombination of chemotherapy and Avastin had been of benefit to her. By comparison with other patients, she, unlike many of the subjects of thestudies, had suffered no significant side-effects froma cocktail which included Avastin

The matter was referred back to the PCT to bereconsidered.

PCTs are not bound to support all exceptionalcases. However, if they refuse to support thetreatment, they should clearly show why. Forexample, the evidence of clinical effectiveness maybe too uncertain. There may be pressure toconduct a clinical trial, yet the costs of the trial maybe prohibitive. Or, even if a trial is conducted, itsresults may still be inconclusive. Or the treatment,even if it is effective, may be so expensive as to beunaffordable in any case (at least without reducingaccess to other patients). In these cases, it may bereasonable to refuse funding.

The law is not yet clear as to the exact nature of exceptionality. Indeed, their very nature makes itimpossible to anticipate every exceptional case. Inparticular, can personal circumstances ever beexceptional (for example, that the patient hasyoung children and extending his or her life, evenby months, is important)? Recent cases suggest

that they may be. Further litigation will help clarifythese issues.


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So far, the discussion has focused on the decision-making powers of PCTs and the range of discretionavailable to them. However, there are a number of instances in which their discretion is more limited.

The Secretary of State may impose his, or her,will on the NHS by means of Secretary of StatesDirections(Section 8, NHS Act 2006). A directionremoves the right of a PCT to exercise its owndiscretion it mandates what will happen.Directions often have the appearance of a statute but they may also come in the form of executive letters and circulars, provided the wordsdirect that a particular action is required.

Directions are important for PCT priority setting as aresult of NICEs Technology Appraisal Guidance (TAGs).Since 2000, these have had the status of Secretary

of States Directions. The NICE Direction says:

A PCT shall, unless directed otherwise by the Secretary of State apply such amounts of the sums paid toit as may be required to ensure that a healthintervention that is recommended by [NICE] in aTechnology Appraisal Guidance is, from a date not later than three months from the date of theTechnology Appraisal Guidance, normally available(a) to be prescribed for a patient on a prescriptionform for the purposes of his NHS treatment, or (b) tobe prescribed or administered to any patient for the purposes of his NHS treatment.6

Therefore, unless directed otherwise by theSecretary of State, PCTs shall commission atreatment recommended by a TAG, normallywithin three months of its publication. This

mandate remains controversial. Some say that NICEdoes not take affordability into account andimposes considerable opportunity costs on PCTs,yet offers little guidance on which treatmentsshould be reduced, or abandoned, to make way fornew TAG recommendations. Whatever the merit of this concern, NICE TAGs have mandatory status inrespect of PCT funding. It would be illegal (and givepatients the right of action in judicial review) to failcomply with them.

The word normally may cause confusion, but itshould not be read to mean that PCTs withhard-pressed budgets cannot normally afford tocommission new treatments. The word requiresPCT planning to accommodate the cost of NICE TAGs. PCTs should only decide not to fund aNICE TAG recommendation in exceptional

circumstances.

NICE also publishes clinical guidelinesand guidanceon interventional procedures. These are notmandatory. Nevertheless, they represent the viewof an authoritative NHS body. PCTs are notduty-bound to adhere to them, but they must beprepared to demonstrate that they have giventhem proper consideration and have good reasonsfor not following them.

NICEs TAGs are binding on PCTs. But they remainguidance only with respect to clinicians. Even thebest guidance has its limitations. So, as each TAGstates, clinicians must decide whether a treatmentsubject to a TAG is suitable for their individualpatients (or whether factors such as co-morbidityor incompatible drug regimens mean it is unsuitable).

The National Institute for Health

and Clinical Excellence (NICE)


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The second area where PCTs discretion isrestricted concerns primary care and the GeneralMedical Services (Contracts) Regulations 2004 (theGMS Regs).7

PCTs may exert a downward pressure on prescribingcosts in primary care. This is done using indicativeprescribing amounts assessed by PCTs asappropriate to each general practice. Thus Section18 of the NHS and Community Care Act 1990 states:

The members of a practice shall seek to secure that,except with the consent of the PCT or for good cause, the orders for drugs, medicines and listed appliances given by them in any financial year does not exceed the indicative amount notified for the practice

Note, however, that this does not make it wrong toexceed the amount for good cause, for example,an unexpected influx of new patients, or theavailability of new and effective medicines.

Also, prescribers may be penalised if they prescribeexcessively, for example, by prescribing drugs fortheir own financial advantage, or in unjustifieddoses 8 (see also GMS Regs, Schedule 6, para 46).

However, these downward pressures need to be

balanced against a separate GMS duty of prescribersto respond to patient need. The Department of Health has described this duty as follows:

Patients will continue to be guaranteed the drugs,investigations and treatments they need Therewill be no question of anyone being denied the drugsthey need because the GP or primary care grouphave run out of cash. GPs participation in a primary care group will not affect their ability to fulfil their terms-of-service obligation always to prescribe and refer in the best interest of their patients.9

The reason for this statement may originate in theGMS duty that insists that prescribers shall providenecessary and appropriate care and prescribe themedicines and appliances which are needed forthe treatment of their patients. 10 These duties wereconsidered in the Viagra case ( R v Secretary of State,ex p Pfizer [1999]11), in which the Secretary of Statewrote to GPs saying that they should not prescribethe drug except in specified circumstances. Theletter was challenged in judicial review as beingillegal.

The court held the letter to be unlawful forcontradicting the duties contained in the (similar)GMS regulations of 1992. It said that:

The doctor must give such treatment as he,exercising the professional judgment to be expected

from a GP, considers necessary and appropriate.

This is not to say that prescribers should alwaysprescribe the latest, most expensive medicines. Forexample, it is still reasonable to prescribe a genericmedicine if it has equal therapeutic benefit. On theother hand, the GMS Regs insist that the prescribershall prescribe what is needed and this does notseem to permit the PCT to make savings at the costof patient care. So, if a proportion of patients willnot respond well to a generic medicine, the PCT isduty-bound by the GMS Regs to see that analternative is available to be prescribed. (This maybe why a practice has good cause to exceed itsindicative budget.) 12

This right to prescribe is subject to the statutoryrestrictions contained in the black and grey lists,which, respectively, prohibit and restrict access tocertain drugs within the NHS. 13 Note, however, thatPCTs cannot add a drug to these lists. Followingthe Viagra case, treatments for erectile dysfunctionwere added to the grey list and may not now be

Prescribing rights under the General

Medical Services Regulations


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European law

The third area in which it is difficult for PCTs toexercise regulatory discretion over NHS costs is inconnection with EU law. The basic principle of EUlaw is to promote the freedom of movement of goods, services, labour and capital between themember states of the EU. The question is whetherpublic health services are included within theprinciple protecting the freedom of movementof services.

The matter was first raised in respect of NHS care in2006 in Watts v Bedfordshire PCT .14 At the age of 77,Mrs Watts required bilateral hip replacements. Shewas put on a hospital waiting list and assured of treatment within the usual waiting period, at thattime, of one year. She declined to wait so long andarranged to have her care at a hospital in France.Although, shortly before she left, the PCT offered

her treatment within four months, she declined theoffer, had her surgery and returned with a bill of

4,700 for the PCT. It refused to pay and the matterwas taken to the European Court of Justice (ECJ) toconsider whether the provision of NHS care was aservice subject to the rules on free movement.

The ECJ ruled that it was such a service. However, itwas not freely available in exactly the same senseas private banking, or insurance services. The rightto obtain care elsewhere in the EU at NHS expensewas available only if the treatment was normal inthe sense that it had been sufficiently tried andtested by international medical science, and couldnot be provided without undue delay.

Significantly, the existence of standard waitingtimes could not displace the right of a patient totreatment if he or she had urgent need. The ECJ said:

Where the delay arising from such waiting listsappears to exceed in the individual case concerned

freely prescribed. However, this is a decision forParliament, not PCTs. Put another way, if it issensible to limit access to medicines under theGMS Regs, then it is for Parliament to do so bymeans of the lists.

To this extent, supervising primary care prescribingis more difficult than controlling the costs of

treatments in secondary care. This suggests thatPCTs should do so by agreement and negotiation,but not by issuing their own black lists thatpenalise prescribers for doing what the regulationsrequire. Otherwise, PCTs could be at risk of judicial review in the same way as the Secretaryof State in the Viagra case for contradicting theGMS Regs.


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Human rights law

Human rights law is more sympathetic to thedifficult challenges of reasonable resourceallocation. Under the Human Rights Act 1998,claims may be brought, for example, in respect of the right to life (Article 2), the right to freedom fromdegrading and inhuman treatment (Article 3), theright to private and family life (Article 8), and theright to found a family (Article 12) enshrined in theEuropean Convention on Human Rights. These areimportant in connection with clinical relationships,especially compulsory detention under the Mental

Health Act, but they have been less significant inconnection with issues of resource allocation.

Space does not permit extensive consideration of this area. However, the European Court of HumanRights has said that sensitive matters of this natureare best left to the reasonable discretion of nationalauthorities. In contrast to EU law, therefore, theEuropean Convention on Human Rightsacknowledges the opportunity costs of requiringthe treatment of patient A without knowingwhether whether a decision of this nature willadversely affect patients B, C and D. To this extent,except in extreme cases, the European Convention

trusts local public bodies and courts to manageand control disputes in this area.

an acceptable period having regard to an objectivemedical assessment of all the circumstances of thesituation and the clinical needs of the personconcerned, the competent institution may not refusethe authorisation sought on the grounds of theexistence of those waiting lists, [or] an alleged distortion of the normal order of priorities linked tothe relative urgency of the cases to be treated.

The ECJs role is to advise domestic courts how toresolve the dispute, not to decide the merits of the case itself. So the matter was referred back tothe Court of Appeal to be reconsidered in thelight of this guidance. The PCT settled out of court before the need arose for further litigation.

Clearly, a widespread use of this freedom coulddestabilise patterns of resource allocation in the NHS. The problem is not so much in connection withundue delay because the new NHS 18-week waitinglist target will probably satisfy most cases. But whatif treatment is not provided within a PCT because itis considered low priority? If such treatment werenormally available in (say) France and Germany,would it be normal treatment in EU law? Canpatients simply obtain it in the EU and return withthe bill? With respect, the European Court has notbeen conspicuous for its clarity in this area.

This issue is now (in March 2008) before theEuropean Commission for the purpose of a newdirective on cross-border access to treatmentwithin the EU.


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Judicial review proceedings

Figure 2. Three steps leading to judicial review

1. Correspondence prior to actionFirst, there is likely to be correspondence before formal proceedings commencing. Patients who have beenadversely affected by a decision are entitled to know how and why it has been made. A candid andtransparent explanation of PCT procedures may demonstrate that the decision was fair and reasonable. Itmay also enable misunderstandings to be put aside and, if necessary, new information to be considered.

2. Pre-action protocol This is a stage at which the parties should search for a legal solution. Judicial review requires the claimantto identify the substance of the complaint and the documents that may be used, and explain why theauthority is said to be wrong. New information may come to light that suggests that the original decisionshould be reconsidered.

3. Judicial reviewIf pre-action protocol fails, the matter may proceed to judicial review. The claimant has three months fromthe date the claim first arose to issue judicial review proceedings, unless there is good reason for a delay.

If this fails

We consider the two stages of judicial reviewproceedings below.

Priority setting is a contentious area and judicialreview is becoming increasingly common. Whatis the procedure and how should PCTs respond? Itis important to contact solicitors as soon as there isa suggestion of legal action, both for their adviceand because they may facilitate a solution.

There are two stages to a judicial review.

(a) Permission stage This stage requires the claimant to obtain thepermission of the court to proceed with the case. To do so, the claimant must serve on the

defendant a Claim Form and detailed statement of the case, explaining the grounds for judicial review.

This gives the defendant notice of thecommencement of proceedings.

The timetable for decisions about judicial review isshort. If the defendant wishes to contest the claim,he must respond to the Administrative Court within21 days with an Acknowledgement of Service anda summary of the defence. The defendant can alsosubmit written argument that permission shouldbe refused. At the hearing, if the judge refusespermission to proceed, the claimant can have thematter reconsidered at an oral hearing within sevendays, which the defendant is entitled to attend and

If this fails


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present argument. If permission to proceed isgranted, the matter is taken to a full hearing.

Both parties are under a duty of candour todisclose all the information connected with thecase, including things that do not support theirposition. This is especially important for the publicauthority. (In any case, the Freedom of InformationAct may compel disclosure of relevant documents).

(b) Hearing stage The hearing stage could be within six months of permission being granted, and in an urgent case,much sooner. Judicial review is normallyconducted on the papers alone. PCT officers will berequired to give witness statements; they are notusually required to give oral evidence.Nevertheless, issues could arise during the hearing

for which further instructions are required. For thisreason, those familiar with the case should attendand assist if required.

If the defendants decision is criticised and judicialreview granted, the claimant will apply for aremedy . A frequent remedy is a quashing order , bywhich the court overturns the PCTs decision andrefers it back to the PCT to be taken again. Thecourt may also make a declaration (for example,declare that the PCT has acted unlawfully), theaffect of which is very similar that is to require thematter to be reconsidered. It is uncommon in NHScases for the court to make a mandatory orderrequiring the PCT to do something specific becausethe courts are conscious that giving resources toPeter may mean taking them from Paula.

Working with lawyers

The following points can help PCTscommunicate effectively with lawyers.

Build up a relationship with one or two lawyersto work with the PCT and assess its policies,structures and processes. Do not use them onlywhen the PCT is in trouble.

Select your legal team carefully you need afirm specialising in the NHS.

Legal advice is important build the costs into

the budget. Ensure that the legal team has an overview of

priority setting.

Ask lawyers to check key documents.

Seek regular training sessions and legal updates.

Ensure that nominated individuals have accessto legal opinion; particularly the director of commissioning and the senior public healthconsultant involved in priority setting.

When in doubt, seek legal advice rather thancontinue to operate in an area of uncertainty. The law is not always crystal clear, but it ishelpful to know where the uncertainties lie.

In exceptional cases, if the claimant can prove thata decision was in breach of a duty and causeddamage, the court may award damages undereither the Human Rights Act or common law.


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Conclusion

Key action points

Step 1: Agree key principles to underpin priority setting Ensure that the PCT board and other key members of the PCT have an understanding of the law in

this area.

Adopt a policy that legal training should be mandatory for key members of the PCT and arrange trainingas required. A one-day seminar is sufficient.

Agree the principles and factors that will inform decision making and ensure that these are consistent

with the law.

Step 2: Develop and establish priority-setting structures and processes Draw up a set of good practice guidance as shaped by the law, or ask your lawyers to do it for you.

Make a contract with your lawyers to provide legal updates and make recommendations if changes topolicies and processes are needed.

Ensure that there is good documentation of all aspects of the decision-making process.

Audit PCT decision making regularly.

Step 3: Consider how to approach key relationships Ensure that there is good access to legal advice and that designated individuals can obtain it with

relative ease.

Build up a long-term relationship with specialists in this field of law.

Step 4: Produce key policy documents Ensure that the PCT has a document that sets out the principles, policy and processes that it will adopt

when priority setting. This should apply to all levels of decision making.

See Priority setting: an overview for a description of the steps.

Patients and the public should be engaged in theprocess of priority setting. Their involvement requiresPCT policies and documents to be prepared in waysthat are reasonable, accessible and transparent. Inthis way, the community may see and understandthe need for choices in the NHS. The objective is tomanage the risks of priority setting, and these risks

are not just to the PCT; poor practice also puts atrisk the community and individuals. Judicial review,therefore, is about reasonable systems forbalancing the sometimes competing claims onfinite resources. The law has developed rapidly but,within the limits we have discussed, still leavesmuch scope for reasonable discretion.


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The author

Christopher Newdick is Professor of Health Law atthe University of Reading, Honorary Consultant toBerkshire West PCT, and a member of the BerkshirePriorities Committee and the BMA's working Groupon NHS rationing.

Acknowledgments

This series has emerged from the ESRC-fundedseries on managing scarcity in healthcare, run byProfessor Cam Donaldson. It has been funded bya grant from the NHS Institute for Innovation andImprovement.

The author and the NHS Confederation would liketo thank Dr Daphne Austin, consultant in public

health for the West Midlands SpecialisedCommissioning Team, for her assistance with thisreport. Responsibility for errors and omissions arethe authors alone.


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1 R v N and E Devon HA, ex p Coughlan [1999]Lloyds Rep Med 306

2 National Health Service (functions of strategic health authorities and primary care trusts and administrative arrangements) (England)Regulations 2002. HMSO SI 2002, no. 2375

3 R v NW Lancashire HA v A, D & G (2000) 53BMLR 148; [1999]Lloyds Rep Med 399

4 The Thames Valley ethical framework . ThamesValley Public Health Resource Unit, 2005

5 R (Otley) v Barking and Dagenham PCT [2007]EWHC Admin 1927; [2007] LS Law 593

6 Funding of technology appraisal guidance fromthe National Institute for Health and Clinical Excellence. Department of Health, 2003

7 National Health Service (General Medical Servicescontracts) regulations 2004. HMSO SI 2004, No. 291.

References

8 Revisions to the GMS Contract 2006/07. Deliveringinvestment in general practice, Schedule 8. BMAand NHS Confederation, 2006.

9 The new NHS. Modern and dependable.Developing primary care groups, HSC 1998/139,paras 52-53.Department of Health, 1998.

10 National Health Service (General Medical Servicescontracts) regulations. 2004, Schedule 6, paras 15and 39. HMSO SI 2004, No. 291.

11 R v Secretary of State for Health, ex p Pfizer[1999] Lloyd's Rep Med 289

12 Revisions to the GMS Contract 2006/07. Deliveringinvestment in general practice, Schedule 8. BMAand NHS Confederation, 2006.

13 National Health Service (General Medical Services

contracts) (prescription of drugs etc) regulations2004. HMSO SI 2004 No. 629.

14 R (Watts) v Bedfordshire PCT Case (2006)ECJ ,C-372/04


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Further reading

Newdick C. 2005:Who should we treat rights,rationing and resources in the NHS. Oxford UniversityPress. This book considers the managerial, political,clinical and legal pressures on NHS resourceallocation.

The Treasury Solicitor. 2006:The judge over your shoulder , 4th edition. This book is a layman's guideto judicial review generally.www.tsol.gov.uk/Publications/judge.pdf


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Priority setting: managingindividual funding requests

Supported by:


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For further details of the Primary Care TrustNetwork, please visitwww.nhsconfed.org/pctnetwork or contact David Stout on 020 7074 3322or at [email protected]

The NHS Confederation

29 Bressenden PlaceLondon SW1E 5DD Tel 020 7074 3200Fax 0870 487 1555Email [email protected]





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Contents

Introduction 2

What is an individual funding request? 2

What approach should PCTs take to individual funding requests? 3

The individual funding request decision-making process 7

Service developments 9

Other difficult areas 11

Individual funding requests related to treatment-specific policies 13

One-off decisions 14

Conclusion and key action points 15

The author 16

Acknowledgments 16

References 17

Glossary 17


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Priority setting: managing individual funding requests02

Introduction

In undertaking priority setting, one of the keychallenges for primary care trusts (PCTs) is how tostrike the right balance between providing servicesthat meet the needs of the majority andaccommodating the differing needs of individual patients.

Commissioning by its very nature focuses on thelarger scale. As a result, it cannot be undertaken ina way that meets all needs of all patients in anyone clinical group or address the specific needs of patients with less-common conditions. Therefore,PCTs will always need an individual fundingrequest (IFR) process to consider makingadditional NHS funds available for the atypical oruncommon patient.

Decision making is compounded by the fact thatlegitimate demands for healthcare will alwaysexceed PCT budgets. There have always beenindividuals whose need for healthcare has notbeen met by the NHS and this will inevitablycontinue in the future. Indeed, unmet need is anunfortunate feature of all healthcare systems. So,how should a PCT decide which individual patientsshould have their requests for special considerationfunded? These are some of the most difficultdecisions a PCT will have to face.

This report explores this area of decision makingand provides some good-practice points in relationto managing individual funding requests anddealing with clinicians and patients.

What is an individual funding request (IFR)?

An IFR is a request to a PCT to fund healthcare for an individual who falls outside the range of services andtreatments that the PCT has agreed to commission.

There are several reasons why a PCT may not be commissioning the healthcare intervention for whichfunding is sought. These are shown below.

It might not have been aware of the need for this service and so has not incorporated it into the servicespecification (this can be true for common and uncommon conditions).

It may have decided to fund the intervention for a limited group of patients that excludes the personmaking the request.

It may have decided not to fund the treatment because it does not provide sufficient clinical benefitand/or does not provide value for money.

It may have accepted the value of the intervention but decided it cannot be afforded in the current year.

IFRs should not be confused with:

decisions that are related to care packages for patients with complex healthcare needs

prior approvals, which are used to manage contracts with providers. 1


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Priority setting: managing individual funding requests 03

PCTs need to have clear policies. It is important tounderstand that there is a direct link between IFRdecisions and other aspects of PCT priority setting,so any approach a PCT takes should be in harmonywith its wider policy.

It may be helpful to consider that IFRs generallycome in one of three circumstances:

the patient has a rare condition and makes therequest for funding for the usual way of treatingthe condition

the patient has a more common condition butclaims that the usual care pathway does not work for him or her

the patient wants to take advantage of a medicaltreatment that is novel, developing or unproven,

and which is not part of the PCTs commissionedtreatment plans.

Commonly, the first type of application is dealtwith on its individual merits, while the latter twoare only funded in exceptional circumstances.

The law shapes this area of decision making quiteconsiderably. Please note, therefore, another NHSConfederation publication in this series, Priority setting: legal considerations.

Exceptionality

Patients' healthcare needs that are not currentlymet are still legitimate. They are judged to be of differing priority. A PCT cannot agree to supportevery claim but neither can it decide in advance torefuse to consider funding someone whose needsdo not fit the established range of commissionedservices. How does the PCT identify those casesthat it should fund? In making these decisions,

PCTs have to be mindful that they always haveopportunity costs, and a decision to fund an IFRhas the potential to result in direct displacement of another service.

In the majority of cases, PCTs will need to considerwhether or not the exceptionality rule applies(those instances where this does not apply will becovered later).

Exceptionality is essentially an equity issue that isbest expressed by the question: On what groundscan the PCT justify funding this patient when othersfrom the same patient group are not being funded?

PCTs must be able to explain coherently theirdecisions to clinicians, patients, the public and thecourts. There is a debate over whether

exceptionality can, or indeed should, be defined ina PCT policy. At the very least, there should be aframework to guide decision making but it isdifficult to give a comprehensive list of cases thatare exceptional because, by definition, it is notpossible to anticipate all instances of the unusualor the unexpected.

There are four stages to considering exceptionality,three of which are done well in advance of the IFRitself (see page 4). The first two provide thefoundation of the PCTs approach to exceptionality,while the third forms part of generating atreatment-specific commissioning policy, and thefourth is consideration of the individual case itself.

What approach should PCTs take

to individual funding requests?

PCTs must be able to explaincoherently their decisions toclinicians, patients, the public and the courts.


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Stage 1. Understanding the meaning of exceptionality within the IFR processPCTs need to clarify what their organisation meansby exceptionality by either defining or describing it. The approach that is gaining most popularity isone that Dr Henrietta Ewart developed, as shownin Figure 1. The text in italics can be considered tobe the definition.

Once the meaning of exceptionality is clearlyunderstood, decision making becomes easier.

Stage 2. Agreeing the factors that can betaken into account in deciding if a patientis exceptional The second consideration is the list of factors thatthe decision maker can take into account when judging whether or not a patient is different toother patients.

PCTs are increasingly adopting policies that onlyallow clinical considerations. Using the definition inFigure 1 as an illustration, the PCT would first

consider whether there were any clinical featuresthat made the patient unique or unusualcompared to others in the same group. If so, then itwould also consider whether there were sufficientgrounds for believing that this unusual clinicalfactor meant the patient would gain significantlymore benefit than that would be expected forthe group.

It is necessary to differentiate here betweenexceptional benefit for an individual and theidentification of a patient subgroup for whichoutcomes are better. The latter issue should havebeen dealt with by the PCT when assessing thetreatment (see Service developments, page 9).It must be recognised, however, that occasionallyan IFR alerts the PCT to the existence of such asubgroup. In these instances, the PCT might haveto go back and review its policy.

Serious mental health issues should be viewed asclinical considerations and not put under thecatch-all phrase of psychosocial factors.

Figure 1. An example of a PCTs policy on exceptionality

The PCT does not offer treatment to a named individual that would not be offered to all patients withequal clinical need.

In making a case for special consideration, it needs to be demonstrated that:

the patient is significantly different to the general population of patients with the condition in question;and

the patient is likely to gain significantly more benefit from the intervention than might be normally expected for patients with that condition.

The fact that a treatment is likely to be efficacious for a patient is not, in itself, a basis for exceptionality.

Courtesy of Dr Henrietta Ewart (adapted)


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individuals and are not rescuers in any real sense. To give in to the impulse to do something canresult in inconsistent and unfair decision makingbecause agreed principles and policies are setaside in order to meet the needs of the decision maker (i.e. to feel good, avoid feeling bad, avoidunpleasantness or reduce risk).

Stage 3. The likelihood of exceptional casesNormally, when assessing a specific treatment, it isadvisable for a PCT to consider the nature of potential exceptions, as different diseases andtreatments have differing potential to generateexceptional circumstance. It is possible to anticipatesome exceptions in advance and these can beindividually addressed in a treatment-specificcommissioning policy.

Stage 4. Considering the individual fundingrequest itself Having set the context, the PCT can take the IFRdecision itself. This involves examination of thespecifics of the case in relation to the abovethree considerations.

The factors covered on page 5 illustrate howimportant it is that those making decisions beaware of their own prejudices and also those of society in relation to deservedness, as these are notalways compatible with the principlesunderpinning healthcare provision in the NHS.

No document on IFRs can ignore the issue of rule of rescue. AR Johnsen2 coined the term in 1986 todescribe the imperative people feel to rescueidentifiable individuals facing avoidable death. Thisis a complex subject and there is no consensusabout its place in resource allocation. In commoncommissioning parlance, the term has come tomean the proclivity of people to rescue anidentifiable individual who has a life-threateningcondition, regardless of cost and the chances of success. Put more crudely, it is often viewed as the

last heroic attempt to save a life against the odds.Its main significance for the practitioner is that itdraws attention to the emotion of the decisionmaker. The need and urge to do something for thepatient is very strong. Most of us share this impulse.PCTs, however, do not owe a direct duty of care to

What does the law have to say in relation to what is considered material toIFR decisions?

The law relating to priority setting is not at all clear about the factors that PCTs should use and what theycan rule out. There are a number of cases which have gone before the courts that suggest social factorsmay be taken into account, even though there may be good rational and ethical arguments against theirconsideration. Greater certainty can only be achieved through further litigation that addresses these issues.

The courts can only consider the arguments that are put before them. Poorly argued cases may setuncomfortable precedents.

PCTs need to balance a concern not to use social and demographic considerations in a way that isdiscriminatory against the risk that a court may be inclined to set aside a decision that failed to take such

factors into account.


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If the appeals panel identifies a problem, theissue is referred back to the IFR panel forreconsideration. The patient or their cliniciansshould not normally be permitted to introduceadditional evidence at the appeal stage. If there isnew evidence to support a case, this does not meanthat the original decision made on the evidencethen available was wrong. Thus the policy shouldsay that the case should be referred back to theIFR committee to decide whether the informationis significant enough to merit reconsideration.

There is good documentation of the process of decision making as well as the outcome.

The reasoning, as well as the outcome, iscommunicated to the requesting clinician, and(and this should be the no

priority settings

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