General practice fundholding and health care costsBMJ 1997; 315 doi: https://doi.org/10.1136/bmj.315.7110.748 (Published 20 September 1997) Cite this as: BMJ 1997;315:748
Fundholding has curbed increases in prescribing costs
- Maggie Marum, Independent consultanta
Editor—I was surprised to see such an ill considered editorial as Duncan Keeley's on general practice fundholding and health- care costs.1 In the same issue, Thérèse Rafferty and colleagues' study of fundholders' prescribing patterns in Northern Ireland identified some interesting facts.2 Although prescribing costs and frequency of prescribing increased for both fundholders and non-fundholders, the rate of increase in costs for fundholders was significantly lower than that for non-fundholders.
In Northern Ireland, fundholders' prescribing budgets are set roughly on the previous year's actual expenditure—that is, fundholders are immediately penalised for efforts to reduce prescribing costs. This arrangement pertained for one year in England and was subsequently reversed because it was seen as demotivating. As early as 1993, Bradlow and Coulter identified that fundholding had curbed increases in prescribing costs, including those of dispensing general practitioners, for whom the incentives are different.3 Indicative prescribing budgets for non-fundholders did not have the same effect.
Interestingly, commissioning general practitioners are now expressing great reluctance to accept responsibility for cash limited prescribing budgets, unlike their fundholding colleagues. This raises doubts about their acceptance of what, ultimately, is inevitable—cash limited budgets in general practice.
Concern has been expressed that fundholding would lead to a shift away from specialist care, because the fixed budget scheme meant that, where referrals were not made, fundholders would save money. Because of this concern, Surrender et al carried out a further study.4 This indicated that although fundholders' use of specialist consultations had increased by 7.5%, the referral rates of non-fundholders had increased by 26.6%. So while the trend to refer to specialists is increasing, the increase among fundholders is considerably lower. Also, the rate of fundholders' referrals to private clinics decreased by 8.8% during the study, while non-fundholders' referrals increased by 12.2%.
Although emergency admissions are outside the fundholding scheme, Keeley and others suspect that fundholders have a vested interest in admitting patients to hospitals as emergencies, to save on their budgets. In a study for the London School of Tropical Medicine, Nigel Edwards (a health economist) has been investigating in depth the reasons for the rise in emergency admissions. Despite extensive efforts to identify differences in the rate of increase for patients of fundholders and non-fundholders, he was unable to do so.
It is necessary for intelligent professionals, as well as the public, to treat with caution the words of men with bees in their bonnets.
Fundholding seems not to be implicated in rise in emergency admissions
- Nicholas Mays, Director of health services researchb
Editor—In his critical editorial on the effects of general practice fundholding, Duncan Keeley stated that there is no evidence on whether fundholding and non-fundholding practices differ in their contribution to the steady rise in emergency admissions to hospital.1 He implies that since emergency admissions are not a charge against fundholders' budgets, fundholders may have less of an incentive than non-fundholders to seek to reduce emergency admissions. This was an early hypothetical concern raised against fundholding.2
Fortunately, at least one recent study contains pertinent evidence. Toth et al tested the hypothesis that general practice fundholding was associated with a change in the proportion of emergency admissions to hospital. They compared fundholding and non-fundholding practices over the first two years of the scheme in the South Western region, looking at causes of admission where emergency admissions might be substituted for elective admissions.3 They found no evidence that fundholding had had any impact on the proportion of emergency admissions for the causes of admission studied. Thus, at least as far as one region was concerned, it seems that fundholding cannot be implicated in the worrying rise in emergency admissions.
Fundholding gives choice of alternatives if local service is poor
- R V Millard, Fundholding general practitionerc
Editor—Duncan Keeley's editorial condemning fundholding cannot go unchallenged.1 Keeley implies that savings in prescribing costs are not sustained. Yet, in the same issue, research shows real and sustained cost savings with dramatic increases in generic prescribing achieved by fundholding practices.2 Keeley also suggests that low cost prescribers may be poor prescribers. I know of no published evidence to support this idea, and most of my anecdotal evidence suggests the opposite to be true.
Keeley suggests that fundholding may be responsible for the rise in emergency admissions and again does not supply any evidence to support this. Some fundholders have undoubtedly abused emergency access to minimise their own costs in individual cases, but this should not allow critics to dismiss the benefits of fundholding. Extension of schemes to total purchasing should remove any incentive to abuse emergency admissions and might encourage general practitioners to refer “emergencies” more selectively.
Keeley cites a lack of differential referral rates as showing lack of efficacy for fundholding. However, general practitioners did not enter fundholding to refer fewer patients to secondary care. The attraction of fundholding is that it gives general practitioners and NHS patients the chance to use alternatives if the service provided by the local district general hospital is poor. Because the choice exists, many hospitals have responded by dramatically improving efficiency.
I will counter Keeley's opinions with two realities. Walk into any fundholding practice and you will find real, concrete improvements in services offered to patients, whose general practitioners are motivated and have intimate knowledge about the quality of local services. Secondly, in my own area, fundholding practices have set up two “one stop” clinics, which have been of benefit to all local patients.
Some commissioning groups have improved local services, but many general practitioners will find such groups too large and cumbersome. What alternative incentives will the government provide to encourage general practitioners to prescribe and refer thoughtfully?
- Duncan Keeley, General practitionerd
Editor—Maggie Marum accuses me of writing an “ill considered editorial” but is highly selective in the evidence she cites. In the study in Northern Ireland the prescribing costs of first wave fundholders were increasing at the same rate as those of non-fundholders within three years of them entering the scheme.1 This is confirmed by the studies in the Oxford region, in which early containment of prescribing costs by fundholders2 was not found to be sustained in a follow up study three years after the scheme's inception.3 In the Oxford region's study of referrals there was a surprisingly high increase in the referral rate of the control non-fundholding practices.4 But most of these control practices were preparing for fundholding, and there was evidence in three practices of a significant increase in referrals in the preparatory year: this could represent a deliberate increase in referral rate before fundholding or, more probably, be an artefact of improved data collection.
Nicholas Mays cites the published study from the South Western region which failed to find evidence of a difference in rates of emergency admission between fundholding and non-fundholding practices.5 The problem is that both types of practice may have reasons to refer increasing numbers of patients as emergencies. R V Millard accepts that some fundholders may have abused emergency access to reduce costs to their funds.
I agree with Millard's anecdotal impression that practices with low prescribing costs and high rates of generic prescribing—such as the one I work in—may also be prescribing “well” in terms of patient outcomes. But anecdotal impressions may be unreliable, and good evidence on this is, as yet, hard to find. For referrals, a choice of alternative hospital provider within the NHS existed before the reforms. The wisdom, fairness, and cost effectiveness of using NHS funds to allow a subgroup of the population to access private sector surgery needs to be openly debated.
It is possible to see the fact that NHS hospitals are having to do more work for less money as evidence of “dramatically improving efficiency,” but general practitioners generally—and rightly—take a different view if asked to do this themselves. With lengthening waiting lists and a continuing financial crisis in the acute hospital sector, those who wish to defend the continuation of fundholding must find better evidence to justify the large sums of public money being spent to maintain it.