Formulary-control procedures in a staff-model health maintenance organization

Efforts to promote cost-effective drug prescribing in a health maintenance organization (HMO) through (1) revision of the formulary, (2) education, and (3) drug-use evaluations (DUEs) are described. New programs and procedures to promote more cost-effective prescribing were implemented in 1987 at a staff-model HMO with seven health-care centers and 40,000 members. Support to the pharmacy and therapeutics committee in developing formulary recommendations was enhanced, the formulary was revised and the number of listed drugs reduced by half, the focus of pharmacists was changed from purchasing and inventory control to education of physicians about cost-effective prescribing, and the most expensive drug categories were identified and educational efforts instituted. During the next two years substantial changes in the prescribing of oral contraceptives, nonsteroidal anti-inflammatory drugs, antiulcer agents, and anti-infectives, but not antihypertensive drugs, were identified through DUEs. Evaluation of cost savings was limited by the lack of an automated, integrated patient database, and it was difficult to assess the effect of changes in patient population. Revision of the formulary coordinated with enhanced educational efforts and DUEs resulted in more cost-effective prescribing in an HMO without placing severe restrictions on physicians or patients.