The effect of fundholding on prescribing and referral costs: A review of the evidence

In 1990 the UK Government announced the introduction of general practitioner (GP) fundholding whereby GPs were given a budget from which to purchase some health care services. The UK Government is at present piloting total fundholding which extends the partial model by allowing GPs in some practices to purchase all their health care services. If other countries intend to adopt schemes similar to the fundholding model then it is important that the success or otherwise of the UK experience informs their health care policy. The objective of this paper, therefore, is to review all the available quantitative evaluative evidence of the effect of (partial) fundholding on general practice. A total of 17 published quantitative studies evaluating fundholding were found, however, 8 of these were papers relating to 2 studies, therefore only 13 studies were reviewed. These studies examined the impact of fundholding only with regard to prescribing and referral behaviour. The results of these studies indicate that fundholders appeared to: (i) constrain their prescribing and referral costs; (ii) increase their generic prescribing rate; and (iii) not inflate their costs prior to joining the scheme. This review showed that there is a dearth of high quality research evidence evaluating fundholding referral behaviour whereas data on differences in prescribing costs is relatively abundant. The studies reviewed did not evaluate the effect of fundholding on patient health status, quality, patient choice or equity criteria. The difficulties involved in evaluating the partial fundholding model presents a considerable challenge to the evaluation of total fundholding. (C) 1997 Elsevier Science Ireland Ltd.