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Prescribing costs Fundholders had a head start

BMJ 1994; 308 doi: (Published 15 January 1994) Cite this as: BMJ 1994;308:206
  1. D Keeley
  1. Thame, Oxfordshire OX9 3JZ.

    EDITOR, - Jean Bradlow and Angela Coulter's findings on the effect of fundholding on general practitioners' prescribing costs1 need to be interpreted with caution. Firstly, as the authors describe in their discussion, the indicative prescribing amounts of fundholding and non-fundholding practices were not derived in the same way. Fundholders had, and used, the opportunity to negotiate their indicative prescribing amounts upwards to take full account of the needs and circumstances of each practice. This included additional allowances made for historically low prescribing costs. This opportunity was not available to non-fundholding practices. We need to know the extent of this upward revision before we can interpret the performance of practices relative to their indicative prescribing amount. Fund holding practice 4 and non-fundholding practice 10 (in tables V and VI) both showed 11% increases after inflation in net ingredient costs. The fundholding practice made a 10% saving on its prescribing amount while the non-fundholding practice overspent its prescribing amount by 10%. It is no great achievement to make savings on a specially increased budget.

    Secondly, the existence of the fundholding system and the way in which fundholders' budgets have been allocated on a historical rather than a capitation basis might constitute a positive incentive for non-fundholding practices to increase their prescribing (and referral) rates in case they decided in future to opt for fundholding. In this study the non-fundholding practices as a group had, at the outset, the lowest net ingredient costs, the lowest number of items prescribed, and the highest proportion of generic prescribing. In the authors' earlier study of referral rates the non-fundholding practices started out with significantly lower referral rates than the fundholding practices but increased their referral rate by 18% in one year to match the referral rate of fundholders (which also increased).2

    I gather from the regional health authority that most of the non-fundholding practices included in Bradlow and Coulter's study are now either fundholding or preparing for fundholding. One hypothesis to explain the findings of the study with respect both to prescribing and referral is that the fundholding system has acted as an incentive to practices to increase their use of these resources. If the government wishes to curb the rise in prescribing costs, it must extend to non-fundholding practices the opportunity to vire all savings made on their indicative prescribing amount.


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