Specialty budgeting in the new district health authorities.

A major and growing problem facing the Health Service is the conflict between a limitless and, apparently, insatiable demand for health care and a limited supply. This is so despite the NHS's increasing share of the national budget, and the future will see the Service striving to restrict demand and to meet it at an acceptable cost-acceptable within the considerations of equity and doctors' demands to treat patients as they see best. The Economist' recently highlighted the steadily growing demand and the growing cost of technology. The Government is anxious over medical costs and sees a pressing need for cost effectiveness. DHSS circular HC(80)8' provides the opportunity for cost saving by better management methods but we do not believe that the restructuring itself is likely to produce much overall cost saving. NHS reorganisation will mean the transfer of power to new local units and the granting of considerable local autonomy. The strongest influence on the shape of the service has always been the medical profession, and restructuring offers the opportunity for the medical profession to meet, to some extent, the call for cost effectiveness on its own terms rather than entirely at the behest of those holding the purse strings. Doctors must ensure that they agree what local changes they want and that they know how to set about achieving them. The process of clinicians' representation was set out in the report of the Chief Medical Officer's Working Party on Medical Advisory and Representative Machinery.3 The renewed emphasis on resource allocation raises again questions about the adequacy of financial and non-financial information to help decision making. As each new district health authority (DHA) now has to decide its own management structure there is an immediate opportunity for the development of teams at unit level. The use of specialty divisions and multidisciplinary groups, for example, could lead to the better use of doctors' time. Health circular HC(80)8 and a report prepared by the Association of Health Service Treasurers4 have drawn attention to the importance of unit budgets. Better budgeting and costing arrangements are necessary to get decisions down to the lowest level. One possible method is to develop specialty budgeting and specialty costing. The use of clinical teams with specialty budgets could provide a way of balancing clinical freedom and resource control. Incentives for the medical profession