General practice fundholding and health care costs

BMJ 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

  1. Maggie Marum, Independent consultanta
  1. a Oxford Primary Care Consultancy, Malmesbury, Wiltshire SN16 9AX

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 …

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