• M O Bachmann and G Bevan.
• Department of Social Medicine, University of Bristol.
• BMJ. 1996 Oct 26; 313 (7064): 1054-7.

ObjectiveTo estimate the financial risks of 15 categories of rare costly referrals for total purchasing sites of different population sizes.DesignComputer simulation of 100 fund years assuming Poisson distribution of referrals.SettingBritish general practices that have opted to become total purchasing sites. Referral rates and price estimates were supplied by South and West Devon Health Commission.Main Outcome MeasuresVariation in referral costs to purchasers in relation to size of risk pool (person years at risk).ResultsRandom variation in referral costs increased as the size of the risk pool decreased. Variation increased greatly below 30,000 person years. The mean simulated cost of the referral categories considered was 2.8% of total NHS hospital and community service costs, and the maximum simulated cost for 7000 person years was 6.8%. Simulated variation was robust to assumption about prices and referral rates for specific types of referral.ConclusionRare costly referrals seem unlikely to bankrupt total purchasing sites. The management of risk is not in itself justification for total purchasing to be based in several general practices in order to generate large populations. There are other ways of managing risk. Sites can easily explore options by simulations using local referral rates and prices.

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