An evaluation of pharmaceutical management and budget holding in Pegasus Medical Group

Abstract

Aims: To describe and evaluate pharmaceutical management, including budget holding, in Pegasus Medical Group (Pegasus), to determine savings being achieved, to analyse variation in prescribing behaviour and to compare the findings with national and international experience.

Methods: Trends in pharmaceutical expenditure of the 150 Pegasus' 208 members who had a continuous prescribing record for the three years ending December 1996 were compared with national trends. Expenditure per member, per consultation and per item were also analysed.

Results: Pegasus has implemented a comprehensive and classical pharmaceutical management strategy. This includes active personalised feedback, information sharing, peer review groups and information system development, all within an incentive framework of retained savings for new services. Although about 5% savings of total pharmaceutical expenditure were identified by the above method, the real level may be higher. Wide variation between members in their prescribing behaviour was explained almost entirely by the volume rather than the price of the drugs prescribed. Targeting of the volume issue is therefore likely to have a much more significant effect in reducing inappropriate variation.

Conclusion: The results indicate that the achievements of Pegasus, as for other independent practitioner associations, go far beyond the modest level of pharmaceutical savings achieved. These include the development of a substantial infrastructure, peer review processes, new internal and external relationships and accountability for the management of both quality and cost in what may be styled clinical governance. Such achievements put Pegasus and other independent practitioner associations into a strong position to take on new initiatives including integration with secondary care.