Importing budget systems from other countries: what can we learn from the German drug budget and the British GP fundholding?

ABSTRACT

The rising costs of pharmaceutical expenditures are a common problem for policy makers in most European countries. In two countries, budget systems for pharmaceutical spending exist(ed). In Great Britain, between 1991 and 1999 GP fundholders were responsible for prescribing costs, and in Germany an overall expenditure cap for pharmaceutical prescribing has been used since 1993. These two examples are analysed in order to identify the conditions that are needed for successfully implementing budget systems for prescribing costs in other countries. It is argued, that a good budget system balances the provision of enough information for budget holders to monitor their expenditures on the one hand, against an explosive increase of transaction costs on the other hand. Apart from that, it makes doctors responsible only for expenditures that they themselves can actually control, and does not provide them with an incentive to use that discretionary power by shifting expenditures to other health care sectors. A good information infrastructure is needed for the implementation of budget systems in general. For the introduction of fundholding, a number of additional criteria need to be met, such as having gate-keeping GPs with personal lists and having a single-payer system.