Intended for healthcare professionals

Analysis And Comment Primary care

Does practice based commissioning avoid the problems of fundholding?

BMJ 2006; 333 doi: (Published 30 November 2006) Cite this as: BMJ 2006;333:1168
  1. Ian Greener, senior lecturer1,
  2. Russell Mannion, director2
  1. 1Centre for Public Policy and Management, Manchester Business School, Manchester, M15 6PB
  2. 2Centre for Health and Public Services Management, Department of Management Studies, University of York, York
  1. Correspondence to: I Greener ian.greener{at}
  • Accepted 29 September 2006

Current changes to primary care are meant to improve services for patients, but history suggests that they may not deliver and could even decrease satisfaction

By the end of 2006 all general practices in England are expected to be responsible for a budget to purchase secondary care and community health services for their patients.1 What is remarkable about the practice based commissioning initiative is its similarity to the general practitioner fundholding experiment of the previous decade, which Labour abolished after it came to power in 1997. There is therefore potential to take stock of the lessons from fundholding and to assess the prospects for commissioning in that light.2 3


Fundholding was a cornerstone of the NHS reforms of the 1990s. It allowed general practices to hold budgets to purchase secondary care for their patients on the grounds that it would make general practitioners more aware of the financial implications of their prescriptions and referrals. It was also assumed that it would give general practitioners greater leverage in negotiating those referrals with other health providers, as a clear resource would be attached to their commissioning decisions, and that services would become more responsive to patients as a result. Practices were also allowed to retain any budgetary surplus to invest in additional patient services or in enhancing practice premises.

There were three varieties of general practitioner commissioning in the 1990s that gradually extended the scope of the scheme: the fundholding scheme itself; total purchasing pilots, which extended the range of services general practitioners purchased with the rationale that their purchasing would be more responsive than that of health authorities; and general practice commissioning pilots, where groups of practices collaborated to exercise a greater collective influence over commissioning to make health authorities more sensitive to local needs.

Evidence on fundholding

Studies show that fundholding …

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