OBJECTIVE: To develop a weighted capitation formula for setting target allocations for prescribing expenditures for health authorities and primary care groups in England. DESIGN: Regression analysis relating prescribing costs to the demographic, morbidity, and mortality composition of practice lists. SETTING: 8500 general practices in England. SUBJECTS: Data from the 1991 census were attributed to practice lists on the basis of the place of residence of the practice population. MAIN OUTCOME MEASURES: Variation in age, sex, and temporary resident originated prescribing units (ASTRO(97)-PUs) adjusted net ingredient cost of general practices in England for 1997-8 modelled for the impact of health and social needs after controlling for differences in supply. RESULTS: A needs gradient based on the four variables: permanent sickness, percentage of dependants in no carer households, percentage of students, and percentage of births on practice lists. These, together with supply characteristics, explained 41% of variation in prescribing costs per ASTRO(97)-PU adjusted capita across practices. The latter alone explained about 35% of variation in total costs per head across practices. CONCLUSIONS: The model has good statistical specification and contains intuitively plausible needs drivers of prescribing expenditure. Together with adjustments made for differences in ASTRO(97)-PUs the model is capable of explaining 62% (35%+0.65% (41%)) of variation in prescribing expenditure at practice level. The results of the study have formed the basis for setting target budgets for 1999-2000 allocations for prescribing expenditure for health authorities and primary care groups.
OBJECTIVE: To develop a weighted capitation formula for setting target allocations for prescribing expenditures for health authorities and primary care groups in England. DESIGN: Regression analysis relating prescribing costs to the demographic, morbidity, and mortality composition of practice lists. SETTING: 8500 general practices in England. SUBJECTS: Data from the 1991 census were attributed to practice lists on the basis of the place of residence of the practice population. MAIN OUTCOME MEASURES: Variation in age, sex, and temporary resident originated prescribing units (ASTRO(97)-PUs) adjusted net ingredient cost of general practices in England for 1997-8 modelled for the impact of health and social needs after controlling for differences in supply. RESULTS: A needs gradient based on the four variables: permanent sickness, percentage of dependants in no carer households, percentage of students, and percentage of births on practice lists. These, together with supply characteristics, explained 41% of variation in prescribing costs per ASTRO(97)-PU adjusted capita across practices. The latter alone explained about 35% of variation in total costs per head across practices. CONCLUSIONS: The model has good statistical specification and contains intuitively plausible needs drivers of prescribing expenditure. Together with adjustments made for differences in ASTRO(97)-PUs the model is capable of explaining 62% (35%+0.65% (41%)) of variation in prescribing expenditure at practice level. The results of the study have formed the basis for setting target budgets for 1999-2000 allocations for prescribing expenditure for health authorities and primary care groups.