From this month, adults and children eligible for continuing healthcare will have the right to ask for a personal health budget. Five years on from the start of the national personal health budget pilot, awareness among doctors of this new approach remains low, and scepticism at times, high. But rather than being seen as something to confine to the margins of the NHS, personal health budgets could make a significant contribution to important priorities. There are three areas where personal health budgets could help deliver: increasing the self management of long term conditions, reducing demands on acute care, and integrating care across the NHS and social care.

A personal health budget is an allocation of NHS resources that an individual can use to meet their health and well being needs. For example, instead of being transferred to a rehabilitation unit following a brain hemorrhage, Tom (a patient whose case study was published as part of the pilot programme) used his personal health budget to return to his family’s farm and worked with his consultant to develop an alternative programme of activities at the farm and local gym, surprising his consultant with the speed of his recovery. How an individual uses a personal health budget is based on a care plan and agreed with the NHS to ensure that it is clinical and financially sound. Personal health budgets focus on ongoing needs not unplanned care, so inpatient and emergency care are excluded, as are GP services and pharmaceuticals.

From the expert patient programme to the House of Care, there are a growing number of initiatives across the NHS that seek to engage individuals more actively in their own care. This makes sense given the overwhelming task of today’s NHS is the effective management of long term conditions where the evidence for self management and shared decision making is strong. Personal health budgets have much in common with these initiatives. By giving individuals control of the money that would otherwise have been spent on their care, they offer them the opportunity to be fully engaged in shaping their care. There are controversial elements to this control: NHS resources can be spent on things that would not be considered healthcare, such as gym memberships and computers. But the national evaluation found that individuals with a personal health budget experienced greater choice and control over their healthcare and felt their physical and mental health were better as a result.

The evaluation included over 2000 people across control and treatment groups, and encouragingly found that personal health budget holders used on average £1400 a year less inpatient, A&E, and GP care than those receiving traditional services. The approach was more cost effective for those with larger budgets, suggesting that there are more savings to be made from those with higher levels of need. Of course, it is difficult to translate the positive findings of a pilot into a national programme. Something gets lost in the scaling up. But with the NHS under significant financial pressure for some years to come, it seems foolish to overlook the potential of personal health budgets to support greater prevention and early intervention.

The third area where personal health budgets have something to offer is integration. Despite thirty years of initiatives, integration between the NHS and social care has always been a minority sport. The Better Care Fund and Pioneers programme have brought renewed focus to integration as the financial pressure of austerity creates an even stronger case for joining up. Bringing together personal budgets and personal health budgets is a less well recognised route to integration than pooled budgets, joint teams, and integrated care organisations, but one that is well place to deliver an integrated experience of care built around the individual. Personal health budgets are no silver bullet but they do have something important to offer the NHS.

Vidhya Alakeson is the author of Delivering Personal Health Budgets: A guide to policy and practice, Policy Press, 2014. She is the mental health lead for NHS England personal health budgets delivery programme and deputy chief executive at the Resolution Foundation.

Competing interests: “I declare that I have read and understood the BMJ Group policy on declaration of interests and I hereby declare the following interests: I am paid as an independent consultant to work on personal health budgets by NHS England and other public, non-profit and private sector organisations in the UK and US.”