In financial year (FY) 2018/19, National Health Service
England (NHSE) spent almost £8 billion on drugs prescribed by general
practitioners to their patients. This level of expenditure has decreased by
nearly 2.7% from FY 2017/18.
The reduction in prescription drug expenditure is driven
by a combination of lower average costs and lower levels of activity. The per
person per month (PPPM) costs for central nervous system, endocrine and
respiratory conditions have decreased, largely driven by a reduction in the
average cost per item. Cardiovascular system drugs, however, have experienced a
PPPM increase driven by a 3.2% increase in cost per item.
In this paper, Milliman’s Joanne Buckle and Tanya Hayward investigate the drivers of the PPPM trend at a drug class and regional level using actuarial principles.
Capitation arrangements are traditionally used as an alternative to fee-for-service reimbursement to facilitate a transfer of risk from the funder to providers of healthcare services. The objective of introducing risk sharing between funders and providers is to encourage the delivery of efficient and patient-centred care by incentivising the integration of services and minimising unwarranted variation in care. This paper by Milliman’s Joanne Buckle and Tanya Hayward explores how the principles of a traditional capitation arrangement may apply in a regional National Health Service system where the stakeholder roles differ and the implementation of various key capitation principles is not possible.