General Practice

Commentary: Equity in the allocation of resources to general practices will be difficult to achieve

BMJ 1998; 316 doi: (Published 03 January 1998) Cite this as: BMJ 1998;316:43
  1. Azeem Majeed, senior lecturer in general practicea (a.majeed{at}
  1. a Division of General Practice and Primary Care, St George's Hospital Medical School, London SW17 0RE

    Health authorities will increasingly have to grapple with the problem of how they allocate budgets for hospital care to general practices, whether these practices are fundholders or members of a locality commissioning group. Locality commissioning groups will, in turn, have to monitor the use made of hospital care by their constituent general practices and review differences in referral rates to determine if these are acceptable. Health authorities should find that allocating budgets for hospital care to locality commissioning groups is reasonably straightforward if the populations of these groups are sufficiently large. A revised version of the national resource allocation formula, modified to take local factors into account, could be used to do this.1 The difficult task comes at the next stage in resource allocation: how will locality commissioning groups use their budgets for hospital care to ensure that their constituent general practices receive a fair share?

    Gwyn Bevan uses a fictional example to illustrate his points. The general practitioners in Higherton have twice the referral rate of general practitioners in Lowerton despite the towns having similar levels of need. However, we do not know if Higherton would have a higher level of need if its general practitioners referred fewer patients. That is, is the higher use of hospital care by the residents of Higherton leading to an improvement in their health status—and would reducing their use of hospital care lead to a deterioration in their health status? We also do not know whether general practitioners in Higherton are making appropriate use of hospital services. Although their referral rates are higher, they may still be using hospital services appropriately. Even if no rational explanation was found for the variation in referral rates, would a capitation based formula lead to clinical equity? The most immediate effect of such a formula would be that the budgets for hospital care of the general practices in Higherton would be cut, while those of the general practices in Lowerton would increase. How would the general practitioners in Higherton cope with a reduced budget? Would they use hospital services more efficiently and appropriately or would patients suffer? How would the patients of Higherton, who traditionally have a high use of hospital care, react to these changes? Meanwhile, what would the general practitioners in Lowerton do with all the extra resources that came their way? If these extra resources were not used efficiently, then NHS funds would be wasted. Hence, any moves towards a capitation based formula would have to be gradual and combined with educational work, as well as feedback of information on the use of hospital care, to enable the general practitioners in the two towns to manage their new budgets effectively.2

    When commissioning groups look at the referral rates of their practices, they will find that the rates differ widely.3 Some commissioning groups may therefore consider using a capitation based formula to allocate funds for hospital care in the belief that this will lead to a fairer and more appropriate use of hospital services. However, capitation based formulas by themselves may not lead to the achievement of these objectives. The real challenge for health authorities, commissioning groups, and general practitioners is to understand why variations in referral rates occur and to set in place educational and service development programmes to reduce these variations where they are not clinically justified.4


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