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J R Soc Med. 2001 September; 94(9): 466–467.
PMCID: PMC1282189

Workgroup 2: finance

Vicky Robinson, BSc RGN and John Palenicek, MD PhD1

Current systems for financing health and social care in the UK and the USA are complex. We began by looking at the strengths and weaknesses of existing arrangements.



In the National Health Service there are good models of general healthcare for hard-to-reach groups, funded both by statutory and by voluntary organizations. In central London and in other large UK cities there are outreach health promotion programmes for the homeless, sex workers, intravenous drug abusers and so on. Local health authorities and the emerging primary care trusts are responsible for assessing and meeting the health needs of local populations. So there is already an infrastructure in place through which palliative care services can offer support and management strategies. The palliative care needs of these populations, however, have yet to be formally assessed.


Although employer-based private health insurance covers most Americans, palliative care services are primarily financed through publicly funded health benefits programmes. This reflects the private insurance market's response to adverse risk selection and the association between private coverage and employment status. In addition, palliative services are equivalent to terminal or end-of-life care—hospice services. The lumping of the two is due to the type of services financed through the federally supported public benefits programme, Medicare, which restricts the availability of such services to persons within six months of death. These eligibility and service limitations are established to determine reimbursement categories and level to healthcare providers. The strength of this system is that all eligible individuals are ‘entitled’ to such benefits irrespective of total cost to the US Government. These entitlement benefits are, however, limited to exclude curative measures. They are received by about 10% of Medicare decedents.

Aside from the limited entitlement benefits, federal funds are appropriated annually to support ‘discretionary’ health services programmes. These commonly fill the gap between employer-based insurance and public entitlement. Although these programmes are established by Congress for a specific purpose and population, local administration and allocation of funds is flexible. One such discretionary programme is the Ryan White CARE Act, which provides States, cities and community-based organizations with emergency federal funds to support HIV-related services to low-income persons and families with HIV disease. Funding of local services is based on community needs assessments and local planning decisions. Through CARE Act programmes, tens of millions of federal dollars over the past decade have been spent to develop, implement and evaluate palliative care programmes for persons in various stages of HIV disease. The Health Services Resources Administration, federal administrator of the Ryan White CARE Act, is evaluating several innovative palliative care models for persons who are homeless, those who have mental health or substance illnesses, the uninsured, and persons residing in prisons and jails. Some of these new models are expected to be adopted in the larger HIV health delivery system.



At the time of writing the independent hospice services within the UK are under major financial pressure and are awaiting a Government strategy to offer increased statutory support. Statutory healthcare finance in the UK, whilst stable at one level, is vulnerable to ‘flavours of the month’ and long-term central funding is very difficult to secure. With the multiple services and funding streams, communication difficulties are inevitable.


Because of the fragmented system for acute, chronic and palliative services, a US patient is likely to migrate between private and public benefits programmes in the course of a long illness. This migration commonly results in disruption of clinical care, reduced access to specialty providers and resources, irregularity and limitations in the scope and duration of benefits coverage, and high or unpredictable individual out-of-pocket costs. In addition, discrete funding mechanisms for multiple private and public health insurance plans produce an uncoordinated and shifting healthcare system. Collectively, these factors diminish an individual's ability to acquire a comprehensive set of necessary and affordable health services and long-term treatment options. In this environment, the delivery of palliative health services becomes subject to numerous fiscal pressures moderating an individual's acquisition of insurance coverage, provider coverage and reimbursement levels, and the governance and administration of health benefits. These fiscal pressures may include: access to and affordability of such services for the individual, employer, and government; adequate provider reimbursement levels for diagnostic and clinical care services; the authority to coordinate a continuum of health services across the entire health system; and capital investments necessary to establish and maintain palliative care services.

What we would like to see

We would wish to see a single authority responsible and accountable for funding care through a coordinated ‘single pipe’ system. This would provide the financial security necessary for efficient investment. Major advantages would be integration of service and care planning, bringing together patient preferences and diagnostic needs, and increased reliance on public funding for all.

We favour an elastic service environment offering: a mixed economy of therapeutic and social services—properly trained care workers; patient-directed reimbursement; some flexibility with benefits coverage; and an increased role for informal caregivers, where they exist.

Service planning should involve patients; case and disease management should be integrated and cohesive; proxies should be appointed for patients who are cognitively impaired; and the quality of services should be driven by incentives not regulations.

Action points

The workgroup suggests the following action points for years 1 to 5:

  • Identify existing models of integrated service on both sides of the Atlantic
  • Initiate reviews of current financial sources and flows and feasibility studies for move to single-pipe funding; cost out existing models of integrated services
  • Identify professional resources needed to integrate palliative care at various delivery sites—education, training and support strategies rather than creation of separate palliative care services
  • Care management programmes to be drawn up jointly between frontline practitioners, patients, families and caregivers. Care managers to be supported by palliative care experts.

Articles from Journal of the Royal Society of Medicine are provided here courtesy of Royal Society of Medicine Press