The Health Act, which received royal assent on 12 November, will introduce direct payments into health care. 

Direct payments will be one way of delivering a personal health budget. They will involve giving money to individuals to allow them to buy their own healthcare in line with an agreed care plan.

They have been used in social care for several years and have been used to personalise services for service users. They constitute an important part of the Darzi Review and his vision for the NHS. The proposals for direct payments are currently being consulted on until 8 January.

Direct payments will be piloted in PCTs as part of the Department of Health’s wider personal health budget pilot programme. They will only be lawful in pilot schemes approved by the secretary of state - though the Bill allows for the possibility of extending health budgets more widely in future.

Regulations will govern how direct payments work, and how pilot schemes will operate. Wherever appropriate, the government has mirrored the approach already taken for direct payments in social care.

The consultation document sets out regulations and guidance required, and the following is a summary of that document:

1. Everyone in a pilot area who is capable of managing a direct payment (either on their own or with assistance), including people with learning disabilities or mental health needs, should be able to have one if they want one, and if the PCT believe their condition and circumstances are suitable, and meet the criteria  in the PCT’s pilot proposal.

2. Direct payments could be used in flexible, innovative ways to meet agreed health outcomes; they would not need to be spent on traditional NHS services. They could be spent on any services, as long as they are legal and appropriate for government to fund, and agreed in a care plan as meeting the patient’s health needs.

3. If an individual wants a direct payment but does not want to manage one, a nominated person could do this for them. In cases where an individual lacks capacity to consent to receive a direct payment, a representative could manage the budget on their behalf.

4. Before receiving a direct payment, the individual would have to agree a care plan with their care coordinator. This would set out the desired health outcomes, how they would be met (the services to be purchased) and the resources available (the budget).

5. All the information, advice, guidance and support an individual may need should be made available to enable them to make an informed decision on whether to have a direct payment (or other type of personal health budget) and to help them manage the budget. This would include advice on being an employer if they wanted to employ someone directly.

6. Any service that people purchase through a direct payment should meet all the regulatory requirements that it would need to meet if it was procured by traditional means; for example, staff should be vetted where necessary in line with existing legal requirements. PCTs would also be expected to consider the need for service providers to have indemnity cover, and discuss this with patients as part of the care planning process.

7. The individual or their nominated person would need to have a dedicated bank account or other distinct and secure means of receiving a direct payment. People receiving other forms of direct payments, for example for social care, would be allowed to use a single account for all their direct payments as long as the PCT was confident that adequate monitoring and auditing could take place.

8. It should be up to PCTs to calculate the amount of money in a direct payment (or other form of personal health budget). The amount allocated should meet the cost of all parts of the agreed care plan which are being met by the direct payment, and there would need to be regular reviews to ensure that the care plan was appropriate for meeting the individual’s needs, and that the money was being spent in line with the care plan.

9. The consultation document also discusses the setting up and evaluation of the direct payment pilots. It proposes that the health secretary should explicitly approve sites before they can offer direct payments; the pilots should run until 2012, but it would be possible to extend this if necessary; and an independent review should be commissioned to assess the effect of direct payments.

Read the full consultation document.

Doctors can offer their opinions by emailing personalhealthbudgets@dh.gsi.gov.uk

Read more on how direct payments work in social care.