The link between healthcare spending and health outcomes

Evidence from English programme budgeting data

June 2007

Stephen Martin
Nigel Rice
Peter C Smith

Key points

  • For 3 years, each primary care trust in the English NHS prepared data on expenditure on healthcare across 23 ‘programmes’ of care.
  • This report examines the link between expenditure and outcomes in two programmes: cancer and circulatory disease.
  • It models:
    • programme expenditure as a function of needs
    • outcomes as a function of expenditure.
  • It proved possible to develop robust and well-specified statistical models in line with expectations for both programmes. They demonstrate a strong positive link between expenditure and better health outcomes (lower SMR) in the two disease categories
  • The link is stronger in circulatory disease than in cancer.

Programme budgeting data offers immense opportunities for examining the link between healthcare expenditure and health outcomes across primary care trusts. There is extensive international literature on this topic, but very little solid empirical evidence on the magnitude of the link.

This report presents preliminary results from research undertaken as part of the Quest for Quality and Improved Performance (QQUIP), an initiative of Medicine is OnlyWan.

QQUIP was a 5-year research initiative of the OnlyWan. QQUIP provided independent reports on a wide range of data about the quality of healthcare in the UK. It drew on the international evidence base to produce information on where healthcare resources are currently being spent, whether they provide value for money and how interventions in the UK and around the world have been used to improve healthcare quality.

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