Cost fear under new Community Equipment changes

An independent report produced for industry and conducted by the centre for economics and business research ltd, has found the new model of delivery could trigger economic cost of up to £13.4 million per annum nationally.

The report, commissioned by the British Healthcare Trades Association from the centre for economics and business research ltd, is in response to the Department of Health initiative to transform the way community equipment is provided.

Circa 3.8 million pieces of community equipment such as walking sticks, hand rails, beds and lifts are issued each year, making community equipment services a vital part of the health care and social services system.

A well functioning community equipment service can take pressure off primary care providers such as hospitals by allowing patients to return quicker to their homes, preventing injuries as well as allowing older people to live independently for longer.

While the BHTA supports the intended objectives, the cebr report finds that in its current form the TCES policy proposal is likely to miss its objectives. Although the changes are aimed at increasing access to equipment for patients, the BHTA is worried it could backfire and has highlighted the following main concerns:

1. The retail model to date only considers simple, low value community equipment (simple aids for daily living). It therefore neglects the other three quarters of the community equipment spending which go towards complex community equipment. By not recognising the relationship between complex and simple equipment, which are often prescribed in tandem, the government is likely to miss efficiency savings. An integrated approach is needed.

2. The economic impact assessment shows that the proposed retail model is a less efficient way to provide community equipment. A nationwide adoption could trigger additional cost of up to £13.4 million for private households and public services providers.

3. The many different ways in which community equipment services are provided – ranging from pure private sector to full public service approaches – means there is no common base case for a national impact assessment. This casts doubt on the cost savings claims made by the Department of Health.

4. Additionally, the incentives of the new retail scheme are likely to lead to a sluggish take up among retailers with predominantly those with large outlets stocking the equipment. This may lead to an under-provision in less densely populated areas.

Phil Isherwood, Chairman of the BHTA commented: “This report throws up real concerns about the Government's figures but provides an opportunity for the policy to be revised before it is too late. We are concerned that the new model, as it stands, could exacerbate the post code lottery, as a multitude of different approaches are being considered”

The report estimates that 3.8 million pieces of community equipment were issued in England during the financial year 2007/2008. It states that community equipment spending is concentrated on a relatively small number of complex products. The TCES retail model is meant to cover simple aids for daily living, which generally cost less than £100. However, these items account for only 25.8 per cent, or £67.9 million, of the total annual community equipment spending leaving £195.2 million of community equipment spending unaccounted for under the current proposal.

It goes on to say that there is no common base case for a national financial impact assessment due to the prevailing mix in community services provision

The report also finds that the introduction of a TCES system is likely to increase the costs in cases where a private sector loan store system was used to provide community equipment. While there may be moderate cost savings achieved for providing simple community equipment (SADLs), the report suggests that these will be off‐set by rising costs for providing complex equipment and specials. Overall, it finds that the cost for providing the service would increase from £4.83 per head of population to £5.00 after TCES adoption.

The centre for economics and business research's economic impact assessment suggests that a nationwide TCES adoption could lead to additional cost of up to £13.4 million for private households as well as public service providers. This would translate into £4.07 per TCES item issued due to transport costs now borne by private households as well as opportunity costs caused by lost working time.