Gender and financial risk in commissioning

Abstract

A series of articles in BJHCM has been attempting to draw attention to ‘real world’ commissioning risk arising out of the intrinsic volatility associated with the components of healthcare costs. In particular, explanations are needed as to why the magnitude of financial risk appears to be highly location-specific. Up to the present it has been assumed that if the capitation formula allocates equal funding then the financial risk should be roughly the same. Volatility has been calculated as the percentage difference between one year and the next, i.e. to what degree do costs jump around from one year to the next. Volatility will also be high when the long-term trends contain hidden patterns and cycles arising from the interaction of health with the wider environment (Jones, 2004; 2012a–b). In essence volatility is the basis for risk, uncertainty in forecasts, spurious financial variances, hence, futile management meetings, the need to swap money between budgets and attempts to address ‘problems’ which appear to have no immediately apparent direct cause or to which inappropriate solutions are devised based on an incorrect understanding of the real problem. Indeed, what is the use of a contract between commissioner and provider where neither party is aware of the inherent uncertainty contained in the activity and costs? When is a particular cost line genuinely overperforming if there are no upperand lower-limits against which to compare the performance? It has been pointed out that certain diagnoses are more sensitive to the surrounding environment (weather, air quality, infectious outbreaks) than others (Jones, 2012a; c) and based on the analysis of volatility associated with gender in cancers it would make sense to assume that there are additional gender differences (Jones, 2010c; 2011; 2012d). Indeed analysis of over 1500 diagnoses shows that 60% have > 1 percentage point difference in Figure 1. Gender specific volatility for certain diagnoses