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Prescribing budget formulae
- Tony Thick (1 February 2000)
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New formula for GP prescribing allocations
- C A Ryle (1 February 2000)
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Allocate fairly - spend wisely
- Charlie McGarrity (24 February 2000)
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PRESCRIBING BUDGET ALLOCATIONS, A RECIPE FOR REDUCED HEALTH OUTCOMES
- Geoff Davies (28 March 2000)
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Tony Thick
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Editor-Equity is a central concern of PCGs, which are responsible for allocating prescribing budgets to practices. Unfortunately, the existing weighted capitation formulae can produce anomalies in practice prescribing budgets. PCGs face having to make subjective adjustments that are neither transparent nor acceptable. So the promise of a new, intuitively plausible formula , especially one that is at last based on registered practice populations will, as Majeed warns, be attractive to PCGs. However, PCGs should not use Rice et al's formula, for at least three reasons. First, it uses the fatally flawed method of trying to predict the needs of practice populations from attributed data derived geographically. It is an ecological fallacy that patients from different practices have the same characteristics because they live in the same electoral ward. Second, applying existing formulae at practice level has long been controversial . Indeed, in their BMJ article, Rice et al do not propose their formula for calculating practice prescribing budgets. Third, the inherent weaknesses of using existing census data are readily admitted by health economists . Why then continue to conjure formulae from poor data of doubtful relevance? Using registered practice populations instead of attributed census counts is a breakthrough, but not sufficient on its own. Clinical research into measures of health care need should be funded and PCGs are well placed to promote this. Indeed, information on the back of prescription forms has already been used for the low income scheme by Lloyd et al . This is immeasurably more plausible than using old census data on the percentage of dependants in no carer households. Years of health economics and statistics have produced practice budgets that are like rainbows. They have shape and colour but do not touch the ground. PCGs should stick to data and statistics with which they are familiar. What we know about best on the ground in general practice, is prescribing for individual patients. We have to set practice budgets from within a PCG allocation. I prefer a bottom up approach driven by the collaboration between all the prescribers in the PCG. As clinical prescribing data is increasingly computerised, audit can become more extensive and the quality of care assessed in greater detail, including cost. We should set prescribing budgets for our practices on the summated data of individual patient care. Meanwhile, cost growth comparisons between practices will alert the PCG to unequal use of the budget and this can then be investigated. The test of whether a calculation of practice prescribing budgets is 'intuitively plausible', should be applied by the doctors and nurses charged with promoting equity in our New NHS; at least until rainbows touch the ground. Tony Thick 1. Rice N, Dixon P, Lloyd DCEF, Roberts D. Derivation of a needs based capitation formula for allocating prescribing budgets to health authorities and primary care groups in England: regression analysis. BMJ 2000;320:284-8. 2. Majeed A. New formula for GP prescribing budgets. BMJ 2000;320:266. 3. Sheldon TA, Smith P, Borowitz M, Martin S, Carr-Hill R. Attempts at deriving a formula for setting general practitioner fundholding budgets. BMJ 1994;309:1059-1064. 4. Sheldon TA, Smith GD, Bevan G. Weighting in the dark: resource allocation in the new NHS. BMJ 1993;306:835-9. 5. Lloyd DCEF, Harris CM, Clucas DW. Low income scheme index: a new deprivation scale based on prescribing in general practice. BMJ 1995;310:165-9. |
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C A Ryle
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Editor, Rice et al (1) present what they describe as a "needs based" formula for allocating prescribing budgets. This is clearly an improvement on the ASTRO(97) -PU in that it explains a significantly greater proportion of the variation in observed prescribing costs. However, in view of the great impact the formula will have on the resources available to GPs and their patients, its limitations should be stated more clearly. The fundamental weakness is that, despite its title, the formula does not use any direct measure of the need for pharmacological treatment. Like its predecessors, it uses data taken from the National Census to generate proxy measures for health need. The statistical association between these measures and prescribing costs "explains" the observed variation in these costs only in the narrow statistical sense of the word. Bains and Parry(2), and Majeed (3), point out further methodological and conceptual limitations in the derivation of the formula. These criticisms are of more than academic importance. The new formula is "needs based" only in a vague and general sense, but there is a danger that Health Service organisations will act as if it were an adequate basis for the equitable distribution of prescribing budgets. Despite its manifold weaknesses, and the 40% of the observed variation in prescribing costs it fails to explain, this formula will be used to allocate real budgets to real practices, and will provide the basis upon which the performance of practices will be judged. Virtually all PCGs are facing substantial overspends in their prescribing budgets; the patients whose access to treatment will be determined and rationed by the application of the formula will not be proxies. It is up to PCGs to salvage something out of this potential minefield. If we wish to explain variations in prescribing in the full sense of the word, and if we are serious about the pursuit of equity and quality, we have a great deal of work to do. A number of actions spring to mind. Firstly, computerisation gives us the means to collect and analyse detailed morbidity data at practice level, at least for the major chronic diseases. This will allow us to test the formula for prescribing budget allocations against real measures of need, and if necessary make allowances in practice based budgets. Secondly, by combining prescribing and morbidity data, and auditing standards of care, we can ensure that measures of quality are built into our incentive schemes. We will also gain considerably in our understanding of the many causes of variations in prescribing costs. Thirdly, we might consider forgoing the right to keep up to £45,000.00 of savings in relation to our practice prescribing budgets. In the context of a cash starved NHS, large cash handouts for cheap prescribing should perhaps be seen as the occasion for red faces rather the opportunity for red carpets. Dr C A Ryle BM MRCGP
References: 1. Rice N, Dixon P, Lloyd DCEF and Roberts D Derivation of a needs based capitation formula for allocating prescribing budgets. BMJ 2000;320:284-8 2. Bains DL, Parry DJ. Analysis of the ability of the new needs adjustment formula to improve the setting of weighted capitation prescribing budgets in English general practice. BMJ 2000;320:288-90 3. Majeed, M. New formula for GP prescribing budgets. BMJ 200;320:266 |
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Charlie McGarrity, Primary Care Medical Adviser Leicestershire Health Authority
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Editor The formula of Rice at al improves the face validity of the allocation process. However sophisticated the formula, its ultimate use is to divide a sum of money between Health Authorities and PCGs. Fundamental to the recent changes is the concept of the unified budget. Whilst different formulae are used to calculate its elements (HCHS, prescribing, cash limited GMS), and even set target shares, PCGs should decide how much from their unified budget goes into prescribing. Prescribing is now clearly part of a prioritisation process for commitment of allocations. In turn the GP Terms of Service Statement of "prescribing what a patient needs" now more readily becomes defensible as “prescribing what is needed within available resources and taking account of other priorities.” The issue now is to ensure an appropriate prioritisation process. The main reason for practice prescribing budgets is to gain ownership of the cost implication of prescribing at the level of the prescriber. Natural variation at practice level can be such that the same pattern of prescribing would lead to savings one year and an overspend the next. This variation is absorbable at PCG/HA level. The challenge is how to keep the incentives at practice level whilst managing the budget at the PCG level. In seeking equity of allocation, moving under funded practices to their "fair share" must not simply allow the generation of greater savings. The current incentive scheme is perverse in that it rewards minimising expenditure rather than obtaining maximum value. In an NHS that is widely regarded as underfunded it can not be tenable for long to reward saving as opposed to rewarding maximal use of limited resources. A good practice incentive would be wiser. Dr C McGarrity
Competing Interest: None References: 1. Rice N, Dixon P, Lloyd DCEF and Roberts D Derivation of a needs based capitation formula for allocating prescribing budgets. BMJ 2000;320:284-8 2. Lloyd D, Harris C, Clucas D. Low income scheme index: a new deprivation scale based on prescribing in general practice. BMJ 1995; 310:165-9 3. HSC 1998/228 The new NHS Modern and Dependable Primary Care Groups delivering the agenda London Department of Health 1998 4. The National Health Service (General Medical Services) Regulations 1992. London: HMSO , 1992 Sched 2, para 43. (SI 1992, No 635.) |
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Geoff Davies
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Dear Editor - The methodology used for setting prescribing budgets for general practice has evolved over the last decade as successive governments in the UK have sought to restrict the freedom of GPs to prescribe. This is an attempt to control the costs of pharmaceuticals, which have increased at a rate greater than the annual rate of inflation. Practice budgets were originally based on historical spend but budget setting for individual practices were set using, patient units, then ASTRO-PUs followed by ASTRO- [97] PUs. Rice and colleagues {1} have described a new needs weighted index to be applied to practice allocation budgets which will have a profound affect on general practice. Until the formation of PCGs prescribing budgets were indicative for non- fundholding practices, under the latest set of reforms PCG s have a combined budget which, in addition to their management budget, has three main components. These are GMS, prescribing and by far the largest element hospital and community services. Logically any overspend in one area will lead to the reduction in spending in another area or the PCG will run up an overspend overall. This means that any prescribing overspend will lead either to reduced secondary care access, or reduced staff and premises development for primary care. This is what has happened this year with the generic drug shortfall and subsequent price rise. Health Authorities across the country have used the primary care modernisation fund to pay for prescribing overspends, which are almost universal, leaving the development of primary care with virtually nothing. The main problem is the continuing failure of the Department of Health to uplift prescribing budgets in line with the true costs of drug inflation. Put simply if the budget for 2000/01 is too low in the first instance, then the majority will overspend. The allocation will have to take account of the generic price rise ,as prices have not stabilised or reduced. The methodology for budget setting that will now be applied, in common with the previous formulae, assumes that the total prescribing budget for the UK is sufficient to meet the health needs of the population, and that any practice that overspends is prescribing wastefully. This is only looking at one side of the prescribing equation and ignores outcome data, disease morbidity, disease mortality and the general health of the population. The cheapest drug is the one that is not prescribed therefore the easiest way to underspend your drug budget is to either ignore or fail to detect pathology! I would ask the authors to address the supply side of their work, which they dismissed on the grounds that this is only a needs weighted index. Virtually all dispensing practices are in rural health authorities and the majority of single handed practices are in urban/inner city areas, although a number will be rural. There are two issues that need to be addressed, choosing their indices the authors may be inadvertently identifying different prescribing practices between rural and inner city areas which may not be needs based. In fact they have already corrected for needs weighting. This cannot be divorced from outcome data. The recent Channel 4/Kings Fund survey, "the NHS sick list", used patient weighted outcome data to identify inner city areas as poorly performing compared with predominantly rural health authorities. I would propose that the authors have possibly identified higher drug spend as a factor in better health outcomes. This may be an unpalatable truth for politicians who wish to cap drug budgets, but would fit with most doctor's intuition that evidence based modern therapeutic interventions have a positive health outcome despite being more expensive. This is not to dismiss the greater needs that inner city residents undoubtedly have but a call for more work to be done, because if this is true then the new formula will discriminate against areas that are performing well and lead to a levelling down of health care for the nation rather than a levelling up. The second point relates to non cashed prescription items in prescribing practices. If a doctor from a prescribing practice writes a hundred prescriptions how many are cashed at the pharmacy? If a dispensing doctor writes a hundred prescriptions a hundred will be issued and will appear in his PACT data. Estimates for non-cashed items vary between 2-30% [2,3,4] but I am unaware of any recent work. The Dispensing Doctor Association's own figures for 1998/1999[5] put dispensing practices at approximately 4% more expensive than prescribing practices comparing average net prescription costs per patient year. Part of this may be explained by non-cashed items, again more work needs to be done in this area, as this may explain part of the author's variance from the mean. The implications for PCGs are clear, if budgets are set unrealically low then PCGs will overspend leading to an effective cut in other services,or if they keep within budget health outcomes may be adversely affected. I feel that the formula proposed by the authors should only be used for indicative budgets as the above points question it's validity when applied to the complex factors that govern prescribing patterns in primary care. If the Prime Minister is sincere in his aim of bringing our healthcare spend up to EU levels he could start with our spending on drugs. Geoff Davies
1. Rice N, Dixon P, Lloyd D, Roberts D, Derivation of a needs based capitation formula for allocating prescribing budgets to health authorities and primary care groups in England : regression analysis . BMJ; 320:284-7[2000 , 29 January] 2. Rashid A , Do patients cash prescriptions . BMJ Clinical Research Edition; 284:24-6 [1982 , January 2] 3. Waters WH ,Gould NV , Lunn JE , Undispensed presciptions in a mining general practice BMJ; 1; 1062-3,[1976,May 1] 4. Winter JA, Do patients cash prescriptions ? [letter] BMJ Clinical Research Edition; 284:827 [1982 ,March 13 .] 5. Article. Dispensing GP's narrow the gap on costs. Dispensing Doctor;15[4]:12,[1999,October]. |
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