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Monday 24th October 2016

NHS funding is unfair

26th October 2006

18042006_PoundCoins1.jpgThe funding formula currently used to carve up cash to NHS organisations should be scrapped.

Two leading academics have told the Department of Health’s chief economic advisor that the NHS funding formula is based on an untested scientific premise.

Sheena Asthana, professor of health policy at Plymouth University and Mervyn Stone, emeritus professor of statistics at University College London made the comments as they gave evidence to the Commons health select committee's inquiry on the NHS deficits.

They told Professor Barry McCormick that the funding formula was 'fundamentally flawed' and that it should be replaced.

Professor Asthana said the funding formula had a number of failures, which meant rural deprived areas were missing out on funding, and recommended using a morbidity-based formula instead.

Health planners had also failed to grasp the difference between health equity – to reduce inequalities – and healthcare equity – the availability of services, she said.

Professor Stone said the formula, which was originally conceived by academics at Glasgow University in 1994, suffered from a shortage of good quality epidemiological data at the time.

Professor McCormick told the committee that the formula was set up to capture age as well as need and denied it had caused some of the widespread financial deficits in the NHS. He added that the Department of Health was continually revising the funding system, and was now considering proposals for a more developed resource model.

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