At last week's Conservative party conference the government's plans for the future of fundholding were unveiled.1 To understand the significance of these it is important to remember the history of purchasing so far. Working for Patients established two models of purchasing, one centred on health authorities and the other on general practitioners. Health authorities approach purchasing from a population perspective and bring to bear a range of skills in public health and other disciplines to assess health care needs. On the basis of needs assessment, health authorities buy the full range of care for their population except for those services under the control of fundholders. Fundholders are responsible for purchasing a limited list of services and do so in a way that is responsive to patients' demands. There is therefore a contrast between needs based purchasing by health authorities and demand led purchasing by fundholders.

In practice, health authorities and general practitioners in different parts of the NHS have developed a range of approaches to purchasing, which seek to combine the leverage of health authorities with the bite of fundholders.2 These include general practitioners giving advice to health authorities, locality purchasing, practice sensitive purchasing, fundholding consortiums, general practitioner multifunds, and total fundholding. All these initiatives have emerged spontaneously as policy has been driven from the bottom up rather than the top down. One of the consequences has been competition among purchasers as those involved in different approaches seek to show that they are best placed to achieve improved services.

While competition among purchasers has …