SUCCESSFUL IMPLEMENTATION OF LABORATORY BUDGET HOLDING BY PEGASUS MEDICAL GROUP

Aims. To evaluate the effectiveness of budget holding by Pegasus Medic al Group for laboratory services expenditure and reasons for the succe sses observed. Methods. Two pilot groups and a nonpilot group of gener al practitioners were formed with the pilots receiving active feedback , educational programmes and test form redesign within the incentive o f savings being retained by the group for improved primary care servic es. Results. Overall savings of 22.7% were achieved within the budget over a 13 month period. There was a highly significant reduction in ex penditure per member especially in the mean and standard deviation of cost per consultation indicating a marked narrowing of the variance in cost between members in the pilot groups compared with the nonpilot g roup. Conclusion. The study illustrates the effectiveness of a compreh ensive strategy of education, active feedback and test form redesign a nd especially the importance of the incentive of retaining budgetary s avings for service improvements. It also illustrates the importance of collaborative as compared with competitive strategies in achieving co st control and value for money gains in health services. However, more work is needed to establish the appropriateness of lower laboratory e xpenditure by linking test requests to diagnosis.