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23-11-2011 | General practice | Article

New model to set practice budgets





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Researchers have developed a funding formula that can predict future health costs more accurately than current methods.

The team says the model - known as the "person based resource allocation", or PBRA - could be used to guide the allocation of commissioning budgets to general practices under the government's reformed NHS.

As reported in the BMJ, Jennifer Dixon and colleagues from The Nuffield Trust developed a series of models using data (including any in-hospital diagnoses) for individual patients registered at UK general practices, during the years 2005-2006 and 2007-2008.

The best of these models predicted 77% of the variation in actual healthcare costs in 2007-2008 at the practice level. This level of prediction is good by international standards, say the authors, who note that further development of the PBRA has since improved this to 85%.

However, the best formulas only predicted about 12% of the variation in the following year's healthcare costs per individual, suggesting that the model should be restricted to allocation of budgets to practices, and not used at the individual level, say Dixon et al.

"With current information, it is not possible to know what the 'true' level of health needs is in each practice," they write.

"However, compared with previous methods, the PBRA formula makes far greater use of information from individuals, relies less on area level information attributed to individuals, and is more predictive of future costs. As such, it is an improvement on current methods and lays the basis for further refinements using more extensive datasets, such as community based diagnoses."

GP News is an independent clinical news service provided by Springer Healthcare Limited. © Springer Healthcare Ltd; 2011

By Caroline Price