Does pooling health & social care budgets reduce hospital use and lower costs?

Abstract

An increasing burden of chronic disease and multimorbidity has prompted experimentation with new models of care delivery that aim to improve integration across sectors and reduce overall costs through decreased use of secondary care. One approach to stimulate this change is to pool health and social care budgets to incentivise care delivery in the most efficient location. The Better Care Fund is a large pooled funding initiative gradually taken up by local areas in England between 2014 and 2015. We exploit this variation in timing of uptake to examine the short- (1 year) and intermediate-term (up to 2 years) effects of the Better Care Fund on seven measures of hospital use and costs from a cohort of 14.4 million patients constructed using national Hospital Episode Statistics. We test for differential effects on people with multimorbidity. We find no effects of budget pooling on secondary care use for the whole population. For multimorbid patients the use of bed days increased in the short-term by 0.164 (4.9%) per patient per year. In the short-to intermediate-term, pooling health and social care budgets does not reduce hospital use nor costs. However, pooling funds does appear to stimulate additional integration activity.

Keywords: Better care fund; Health financing; Health policy; Integrated care; Multimorbidity; Organisation of care; Pooled budgets.