Programme budgeting and marginal analysis: application within programmes to assist purchasing in Greater Glasgow Health Board.

Recent NHS policy statements advocate the use of 'knowledge-based' purchasing. This paper describes an attempt to use an economic method to inform the purchasing process. The approach of programme budgeting and marginal analysis (PBMA) offers information on current service provision and provides a framework in which changes in a service can be evaluated and agreed within the context of a fixed budget. This has been applied to gynaecology services in Greater Glasgow Health Board and, following positive reaction to the results of this exercise, is now being extended into other areas. The process of carrying out the exercise is described. Additionally, limitations of the approach and the advantages of using PBMA in achieving knowledge-based purchasing are discussed.