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Fixed budgets as a cost containment measure for pharmaceuticals
David Granlund1, Niklas Rudholm, Magnus Wikström
1Department of Economics, Umeå University, Sweden. david.granlund@econ.umu.se
Summary
Fixed pharmaceutical budgets in Swedish health centers did not change physician prescribing behavior. This suggests fixed budgets may not be an effective cost-containment strategy for pharmaceuticals.
Area of Science:
- Health economics
- Pharmaceutical policy
- Healthcare management
Background:
- Västerbotten County, Sweden, implemented fixed pharmaceutical budgets at two health centers, unlike others with open-ended budgets.
- Physician prescribing behavior is a key factor in pharmaceutical expenditure.
Purpose of the Study:
- To investigate if fixed pharmaceutical budgets influence physician prescribing patterns and costs.
- To compare pharmaceutical spending between health centers with fixed and open-ended budgets.
Main Methods:
- Utilized matching methods to compare similar patients across different health center budget types.
- Analyzed prescription data regarding prices and quantities of pharmaceuticals.
Main Results:
- No significant difference was found in physician prescription behavior (prices and quantities) after the introduction of fixed pharmaceutical budgets.
- The study indicates fixed budgets may not be an efficient tool for reducing pharmaceutical costs.
Conclusions:
- Fixed pharmaceutical budgets did not alter physician prescribing habits in the studied Swedish health centers.
- Existing cost-containment measures at these centers might explain the lack of significant change, limiting further cost reductions.
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