The problems of fundholding

BMJ 1996; 312 doi: https://doi.org/10.1136/bmj.312.7042.1311 (Published 25 May 1996) Cite this as: BMJ 1996;312:1311
  1. Sarah Stewart-Brown,
  2. Stephen Gillam,
  3. Tony Jewell
  1. Director Health Services Research Unit, University of Oxford
  2. Consultant in primary care Bedfordshire Health Authority
  3. Acting director of public health North West Anglia Health Authority

    Some benefits to patients but no effect on how doctors practice

    General practitioner fundholding is not the unqualified success that the British government would have us believe. That is the verdict of Britain's Audit Commission, which has recently reported the results of a major investigation into fundholding.1 A research team from the commission surveyed all known fund and practice managers in 1994-5 and one in five fundholders in 1995-6. They also surveyed some of the larger non-fundholding practices. They analysed financial returns and audited fundholders' accounts. They searched the literature for studies related to fundholding. They made site visits to a large number of fundholding practices, family health services authorities, district health authorities, and trusts to collect qualitative data.

    The report confirms the success of fundholding in reducing waiting times and outpatient follow up visits. Many fundholding practices report better communication with hospital services, more “primary care friendly” pathology and radiology services, and the development of practice based services for physiotherapy, dietetics, chiropody, psychiatric nursing, and psychology. Many fundholding practices made savings on their drugs budgets in their first fundholding year, but the effect was not maintained. Although fundholders generally spent less on drugs than non-fundholders, these differences may have predated fundholding.

    The report does not present the material that the research team collected for non-fundholders. This information is essential if we are to be confident that the changes are attributable to fundholding rather than to other influences. Reduced waiting times were the subject of a major national initiative during this period and had to be achieved by all district health authorities. Many contracts required trusts to improve the quality of their services to general practitioners, and improved communication has been reported by non-fundholding practices as well as fundholders.2 The changes achieved by non-fundholding practices have of course been achieved without investing more NHS resources in practices.

    The report also documents many apparent failures. Fundholders have made limited use of the processes capable of improving clinical effectiveness such as the development of clinical practice guidelines. For example, few fundholders had read the Clinical Standards Advisory Group guideline on the management of back pain, and only 10% had agreed criteria on when to treat depressed patients. Fundholders also failed to maximise efficiency savings achievable through day case surgery. Although the proponents of fundholding claim that it brings purchasing decisions closer to patients, few fundholding practices had involved patients in purchasing plans. Very few have undertaken any form of health needs assessment, and only a minority have prepared purchasing plans in which they state what the practice is trying to achieve with its fund. There seems to have been little attempt by either fundholders or district health authorities to develop the coherent strategies that providers need to decide which secondary care services should grow and develop and which should be curtailed. The report does not present information about whether non-fundholders have achieved more or less in terms of patient involvement or clinical effectiveness than fundholders. Fundholding, with its emphasis on contracts and budgets, may have distracted practices from these health-related goals.

    None of the old family health services authorities or district health authorities visited by the Audit Commission had developed systems for judging how wisely fundholders were purchasing. Very few were able to offer fundholders comparative information on their performance, and the training offered to fund managers was regarded as inadequate. The authors of the report were clear that fundholders needed training in commissioning, and identified district health authorities, in particular their public health departments, as the best source of such training. Few fundholders had made use of their public health departments, and most were understandably suspicious of public health doctors' expertise in “primary care led purchasing.”

    Fundholding's apparent successes undoubtedly reflect general practitioners' day to day priorities: fewer patients waiting too long to be seen by a consultant, better discharge information, and easier access to investigations.3 However, the scheme seems to have been ineffective at changing the way doctors practice. Implementing clinical effectiveness initiatives, maximising the use of day case surgery, involving patients in purchasing decisions, and undertaking health needs assessments mean extra work and have largely been neglected. Significantly, none of the practices gave “health for their patients” as a reason for becoming fundholders. Sixty per cent of fundholders' savings have been invested in practice premises. There may be a good case for such investment but it is not clear in what way this is a priority for the NHS, nor whether it is appropriate to invest public monies into private real estate.

    The fundholding scheme has been comparatively expensive. Over the first five years, fundholding practices received £232m to cover staff, equipment, and computers. This represents 4% of the fundholding budget. In addition, the report estimates that health authorities spend an extra £6000 each year per fundholding practice, and trusts report employing two to three full time staff to cover the administration relating to fundholding. The research team looked carefully for evidence that investment in practice management brought benefits. They found that practices that had invested most in management had been able to bring about more changes. This may reflect the “readiness to change” of practices that were prepared to invest in good management.

    Although the labour party proposes to replace fundholding with locality commissioning, in reality none of the political parties seem likely at present to abolish the fundholding scheme. Indeed, while the Audit Commission was undertaking its research, the scheme was expanded to include total fundholding and community fundholding. However, the commission's report makes depressing reading for those who would like to believe that fundholding is the answer to the NHS's problems. Policies, like clinical interventions, should be fully evaluated before being implemented, if public monies are to be used to greatest effect. The current priority for the NHS and the research community must be to address the question of how to transform the fundholding scheme so that it enhances the NHS's capacity to improve the public health. This question needs answering urgently, before the NHS is subjected to yet another unevaluated change of policy.


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