Aims. To describe and evaluate pharmaceutical management, including budget
holding, in Pegasus Medical Group (Pegasus), to determine savings being ach
ieved, to analyse variation in prescribing behaviour and to compare the fin
dings with national and international experience.
Methods. Trends in pharmaceutical expenditure of the 150 Pegasus' 208 membe
rs who had a continuous prescribing record for the three years ending Decem
ber 1996 were compared with national trends. Expenditure per member, per co
nsultation and per item were also analysed.
Results. Pegasus has implemented a comprehensive and classical pharmaceutic
al management strategy. This includes active personalised feedback, informa
tion sharing, peer review groups and information system development, all wi
thin 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 iss
ue is therefore likely to have a much more significant effect in reducing i
nappropriate variation.
Conclusion. The results indicate that the achievements of Pegasus, as for o
ther independent practitioner associations, go far beyond the modest level
of pharmaceutical savings achieved. These include the development of a subs
tantial infrastructure, peer review processes, new internal and external re
lationships and accountability for the management of both quality and cost
in what may be styled clinical governance. Such achievements put Pegasus an
d other independent practitioner associations into a strong position to tak
e on new initiatives including integration with secondary care.