The unavoidable costs of ethnicity : a review of evidence on health costs


This report was commissioned by the Advisory Committee on Resource Allocation (ACRA), and prepared by the Centre for Health Services Studies (CHESS) and the Centre for Research in Ethnic Relations (CRER) at the University of Warwick. The NHS Executive does not necessarily assent to the factual accuracy of the report, nor necessarily share the opinions and recommendations of the authors. The study reviews the evidence concerning the degree to which the presence of populations of minority ethnic origin was associated with ‘unavoidable additional costs’ in health service delivery. While local health authorities retail full autonomy in their use of funds allocated to them under the Hospital and Community Health Services formula, the size of that budget is governed by a set of weightings applied to their population, to allow for factors known to influence levels of need, and the costs of providing services. The study began by considering the definitions used in describing ‘ethnicity’ and ethnic groups in relevant medical and social policy literature. It is clear that no fixed set of terms can be adopted, and that flexibility is required to respond to social changes. The terms used in the 1991 Census, with additions to allow for local and contemporary developments, provide a suitable baseline but require additional information on religion language and migration history for clinical and health service delivery planning. There have been notable developments in health service strategy to meet the needs of black and minority ethnic groups which have been encouraged by good practice guidelines and local initiatives. Together with research into epidemiology and ethnic monitoring of services, these have enlarged understanding of the impact of diversity. A conceptual model is developed which explores the potential for such diversity to lead to variations in the cost of providing health services to a multi-ethnic population. The research team reviewed the existing published evidence relating to ethnic health and disease treatment in medical, social science, academic and practitioner literature, using conventional techniques. Additional evidence was located through trawls of ‘grey’ literature in specialist collections, and through contacting all English health districts with a request for information. A number of authorities and trusts provided written and oral evidence, and a bibliography of key materials is provided. Key issues considered include the need for and use of, interpreter and translation services, the incidence of ‘ethnically-specific’ disease, and variations in the prevalence and cost of treating ‘common’ conditions in minority ethnic populations. Sources of variation are discussed, and a ‘scoping’ approach adopted to explore the extent to which these variations could be adequately modelled. It is clear that while some additional costs can be identified, and seen to be unavoidable, there are other areas where the presence of minority populations may lead to lessened pressures on budgets, or where provision of ‘ethnic-specific’ facilities may be alternative to existing needs. The literature provides a range of estimates which can be used in a modelling exercise, but is deficient in many respects, particularly in terms of precise costs associated with procedure and conditions, or in associating precise and consistent categories of ethnic group with epidemiological and operational service provision data. Certain other activities require funding to set them up, and may not be directly related to population size. There is considerable variation in the approaches adopted by different health authorities, and many services are provided by agencies not funded by NHS budgets. The study was completed before the announcement of proposed changes in health service commissioning which may have other implications for ethnic diversity. The presence of minorities is associated with the need to provide additional services in respect of interpreting and translation, and the media of communication. In order to achieve clinical effectiveness, a range of advocacy support facilities or alternative models of provision seem to be desirable. Ethnic diversity requires adaptation and additional evidence in order to inform processes of consultation and commissioning. Minority populations do create demands for certain additional specific clinical services not required by the bulk of the majority population: it is not yet clear to what extent the reverse can be stated since research on ‘under-use’ is less well developed. Some variations in levels of need, particularly those relating to established clinical difference in susceptibility or deprivation, are already incorporated in funding formulae although it is not clear how far the indicators adequately reflect these factors. Costs are not necessarily simply related to the size of minority populations. The provision of services to meet minority needs is not always a reflection of their presence, but has frequently depended upon the provision of additional specific funds. There is a consensus that the NHS research and development strategy should accept the need for more work to establish the actual levels of need and usage of service by ethnic minority groups, and that effort should be made to use and improve the growing collection of relevant information through ethnic monitoring activities. A variety of modelling techniques are suggested, and can be shown to have the potential to provide practical guidance to future policy in the field. Current data availability at a national or regional scale is inadequate to provide estimates of the ‘additional costs of ethnicity’ but locally collected data and the existence of relevant policy initiatives suggest that a focused study in selected districts would provide sufficiently robust information to provide reliable estimates. The review has demonstrated that there are costs associated with the presence of minority ethnic groups in the population which can be shown to be unavoidable and additional, but that others are either ‘desirable’ or ‘alternative’. It would be wrong to assume that all cost pressures of this nature are in the same direction. Our study has drawn attention to deficiencies in data collection and budgeting which may hinder investigation of the effectiveness of the service in general. The process of drawing attention to ethnic minority needs itself leads to developments in services which are functional and desirable for the majority population

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