02 September 2005
Northern Ireland's health service is set for major reorganisation, following the publication of its version of the Wanless review, conducted by Professor John Appleby, health economist at the King's Fund.
On a range of efficiency measures, Northern Ireland performs much worse than the UK average, with hospital activity per bed 26% lower than in England and unit prescribing costs nearly 30% higher. Waiting times are also much longer in Northern Ireland.
But Appleby found that while waiting lists were a severe problem, they were accounted for by a small number of trusts and specialities. Problems of weak performance, he recorded, resulted from inefficiency, not funding shortages.
Appleby made comprehensive recommendations for improvement. Performance monitoring should focus on outcomes, not just spending. More attention should be given to performance, using 'milestone' targets, with the adoption of incentives and penalties.
He suggested the introduction of a purchaser/provider split, along with activity-based reimbursement systems, which might include payment by results and tariff-setting for operations.
In addition, he proposed the modification of the existing system of integrated health and social service provision, with either the services separated or else social services given ringfenced budgets.
Sanctions should be set in place to end the generalised prescription of full-priced drugs and to encourage the use of generic substitutes.
Appleby also reported that using the Wanless projections for future health expenditure in Northern Ireland, the Barnett Formula for government grant distribution will prevent adequate funding for future health service needs. He said that 'some way round the Barnett Formula' was necessary to prevent future health spending affecting other services.
'We looked at a number of measures of efficiency and productivity and on almost all of these Northern Ireland seemed to be under-performing England,' Appleby told Public Finance. 'The weight of evidence was that Northern Ireland is not making the best use of resources.'
The review was welcomed by both Lord Rooker, finance minister in charge of the review of Northern Ireland's public services, and Shaun Woodward, the health minister. Woodward has already begun adopting stronger performance targets in line with Appleby's recommendations.
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