Direct payments aimed at giving patients greater choice and control over their health care are to be introduced in England later this year, under a pilot scheme which would run to 2012 if Parliament approves proposals contained within the government’s new Health Bill.

Personal budgets have been available to social care clients since the mid-1990s, and both the Conservatives and the Liberal Democrats have already called for them to be extended to health care.

Announcing the proposals, Secretary of State for Health Alan Johnson said that people want more control over their own health, "which is why the Bill will give more power to patients and drive up the quality of care." Health Minister Lord Ara Darzi, who recommended the introduction of personal health budgets in his Next Stage Review of the National Health Service (NHS) last year, added: "we consulted over 60,000 clinicians, public and staff and the clear and consistent message was that people want a greater degree of control and influence over their health and healthcare. Building on the experience of social care, the Bill allows the further development of ways to give patients greater personalisation and control over the health care services they receive."

Under the proposals put forward by the Department of Health last July, three broad categories of personal budget are envisaged for patients with long-term conditions such as diabetes, multiple sclerosis and motor neurone disease, thus:

- notional personal budgets, under which patients are aware of the treatment options with a budget constrain and the financial implications of their choices, while the NHS underwrites overall costs;
- real personal budgets held by the system, which allocates a "real" budget to a patient, held on their behalf by an intermediary such as a GP or care coordinator who helps the patient choose services within the personal budget; and
- cash payments to patients instead of service entitlement - the equivalent of direct payments in social care. Patients would be expected to purchase and manage services themselves.

The proposal for the scheme, which would be voluntary and not cover NHS emergency services, has generally been welcomed, with some caveats. The NHS Confederation, which represents over 95% of NHS organizations, believes that giving patients control over healthcare funding could revolutionise the way in which care is delivered, provide enhanced outcomes and change the nature of the patient-professional relationship, but adds that the initiative is not without risks.

"There is a growing body of evidence to suggest health outcomes are improved when the patient is directly involved in making decisions about their treatment and the way in which care is delivered by NHS staff," said the Confederation’s chief executive, Steve Barnett. However, he added that significant barriers would need to be overcome before this policy was rolled out nationally. For example: Should patients be allowed to spend their personal budgets on non cost-effective treatments? Should individuals be allowed to top-up their care with privately-purchased treatments? Should patients be allowed to invest personal budgets to be spent at a later date? Any pilots should consider these issues in more detail, said Mr Barnett.

Health policy think tank the King’s Fund was also cautiously welcoming. "Direct payments offer the potential for patients to have more control over the care they receive, allowing treatment to be truly personalised. However, their use won't be straightforward," said chief executive Niall Dickson. "Getting the initial payment level right will be important, as will deciding what restrictions to place on the kind of treatment a patient is allowed to purchase with tax payers’ money, and from whom."

Mr Dickson also emphasized that the pilots must be "genuine, with no decision to extend the scheme until all the results have been thoroughly evaluated and all the implications understood."

However, the British Medical Association (BMA) said that it would await the outcome of the pilot but felt that direct payments might not be the best way of giving patients more power.

"It is currently very unclear how such a system would work in practice; for example, what would happen when a patient’s budget ran out? Moreover, this policy seems to further establish the idea of healthcare as a commodity, which the BMA does not believe is in patients’ best interests," said Dr Hamish Meldrum, Chairman of Council at the BMA.

And the public service union Unison expressed total opposition to the plan, arguing that giving patients money to buy their own healthcare would pave the way for top-up payments and undermine the founding principles of the NHS.

Unison’s health of health, Karen Jennings. warned of the "real danger of creating a situation where patients use their personal budget ineffectively and then, like Oliver Twist, go back for more. Or, patients will be persuaded to top up their budgets from their own savings, undermining the very founding principle of free healthcare for all."

She also forecast that the pilots will bring to light a whole range of problems, with "massive implications" for workforce planning, NHS budgets, a two tier-NHS, staff training and development and the possibility of greater rationing.

"Against this background, the pilots must be rigorous and long enough to gauge the longer-term implications. We are already seeing the damaging impact of personal budgets in social care as the results of rolling-out the system before time. We cannot allow the same to happen in the NHS," said Ms Jennings.

The Bill, which will proceed through the House of Lords over the next two months, also contains proposals to:
- place a duty on all NHS bodies, private sector and third sector providers of NHS services to "have regard" to the NHS Constitution;
- create new "quality accounts" aimed at improving health services:
- introduce "innovation prizes" to encourage an enterprise and innovation culture within the NHS;
- increase powers of suspension "to hold to account those who fail to meet the requirements of public office";
- establish a regime for unsustainable NHS providers to protect patients and staff from failing services; and
- reform pharmacy services to ensure that they are based on local needs.