Do doctors respond to financial incentives? UK family doctors and the GP fundholder scheme

The 1991 reforms to the UK NHS created a group of buyers of hospital care from amongst primary care physicians. The implementation of the reforms was such that these buyers had incentives to increase their use of hospital services prior to entering the scheme in order to inflate their budgets. It has been argued that non-financial motives would limit such behaviour. The paper shows that these health care providers did respond to the financial incentives offered by the scheme, increasing hospital-based activity prior to entry, and so inflating their budgets upwards for the duration of the fundholding scheme. (C) 2001 Elsevier Science B.V. All rights reserved.