Effect of fundholding and indicative prescribing schemes on general practitioners' prescribing costs.

OBJECTIVE--To compare general practitioners'' prescribing costs in fundholding and non-fundholding practices before and after implementation of the NHS reforms in April 1991. DESIGN--Analysis of prescribing and cost information (PACT data; levels 2 and 3) over two six month periods in 1991 and 1992. SETTING--Oxford region. PARTICIPANTS--Three dispensing fundholding practices; five non-dispensing fundholding practices; and seven non-dispensing, non-fundholding practices. MAIN OUTCOME MEASURES--Percentage change in net cost of ingredients, number of items prescribed, average cost per item, and proportion of generic drugs prescribed after NHS reforms. RESULTS--Prescribing costs increased in all practices in the six months after the reforms. The net costs of ingredients increased among dispensing fundholders by 10.2%, among non-dispensing fundholders by 13.2%, and among non-fundholders by 18.7%. The number of items prescribed also increased in all three groups (by 5.2%, 7.5%, and 6.1% respectively). The increase in average cost per item was 4.8% for dispensing fundholders, 5.3% for non-dispensing fundholders, and 11.9% for non-fundholders. Dispensing fundholders increased the proportion of generic drugs prescribed from 26.9% to 34.5% and non-dispensing fundholders from 44.5% to 48.7%; non-fundholders showed no change (47%). Five of the eight fundholding practices made savings in their drugs budgets at the end of the first year of fundholding (range 2.9-10.7%; the three other practices overspent by up to 3.6%). All non-fundholding practices exceeded their indicative prescribing amounts (range 3.2-20.0%). CONCLUSIONS--Fundholding has helped to curb increases in prescribing costs, even among dispensing general practitioners, for whom the incentives are different. Indicative prescribing amounts for non-fundholding practices do not seem to have had the same effect.     

Influences of practice characteristics on prescribing in fundholding and non-fundholding general practices: an observational study.

OBJECTIVE: To investigate the variation in prescribing among general practices by examining the contribution to this variation of fundholding, training status, partnership status, and the level of deprivation in the practice population and to investigate the extent to which fundholding has been responsible for any changes in prescribing. DESIGN: Analysis of prescribing data (PACT) for the years 1990-1 (before fundholding) and 1993-4 (after fundholding), Use of multiple linear regressions to investigate the variation among practices in total prescribing costs (net ingredient cost per prescribing units), and mean cost per item in each of the two years and also the change in these variables between years. SETTING: Former Mersey region. SUBJECTS: 384 practices. RESULTS: The models developed explained the variation in cost per item (43% of variation explained for 1990-1, 38% for 1993-4) and prescribing volume (34% for 1990-1, 38% for 1993-4) better than the variation in total prescribing costs (3% for 1990-1, 7% for 1993-4). The models developed to explain the change in these variables between years did not explain more than 10% of the variation. Most of the explained variation in the change in total prescribing costs was accounted for by fundholding. Of the pounds 3.71 saved by first wave fundholders compared with non-fundholders pounds 3.57 was attributable to fundholding alone. CONCLUSION: In neither year did fundholding make a major contribution to the variation in prescribing behaviour among practices, which was better explained by deprivation, training status, and partnership status, but it did seem largely responsible for differences in the rise of total prescribing costs between fundholders and non fundholders.     

Effect of NHS reforms on general practitioners' referral patterns.

OBJECTIVE--To compare outpatient referral patterns in fundholding and non-fundholding practices before and after the implementation of the NHS reforms in April 1991. DESIGN--Prospective collection of data on general practitioners'' referrals to specialist outpatient clinics between June 1990 and March 1992 and detailed comparison of two time periods: October 1990 to March 1991 (phase 1) and October 1991 to March 1992 (phase 2). SETTING--10 fundholding practices and six non-fundholding practices in the Oxford region. SUBJECTS--Patients referred to consultant outpatient clinics. RESULTS--After implementation of the NHS reforms there was no change in the proportion of referrals from the two groups of practices which crossed district boundaries. Both groups of practices increased their referral rates in phase 2 of the study, the fundholders from 107.3 per 1000 patients per annum (95% confidence interval 106 to 109) to 111.4 (110 to 113) and the non-fundholders from 95.0 (93 to 97) to 112.0 (110 to 114). In phase 2 there was no difference in overall standardised referral rates between fundholders and non-fundholders. Just over 20% of referrals went to private clinics in phase 1. By phase 2 this proportion had reduced by 2.2% (1.0% to 3.4%) among the fundholders and by 2.7% (1.2% to 4.2%) among the non-fundholders. CONCLUSIONS--Referral patterns among fundholders and non-fundholders were strikingly similar after the implementation of the NHS reforms. There was no evidence that fundholding was encouraging a shift from specialist to general practice care or that budgetary pressures were affecting general practitioners'' referral behaviour.     

Distribution of NHS funds between fundholding and non-fundholding practices.

OBJECTIVES--To estimate the amount spent on specific hospital care by health agencies in 1993-4 and compare it with the resources allocated to patients registered with fundholding practices for the same type of care. To investigate whether fundholding practices and health agencies pay different amounts for inpatient care. DESIGN--Examination of hospital episode statistics, 1991 census data, and family health services authority and health agency records. SETTING--Health agencies and fundholding practices in the former North West Thames Regional Health Authority. MAIN OUTCOME MEASURES--Amount per capita allocated to inpatient and outpatient care for patients registered with fundholding and non-fundholding practices. Average specialty cost per finished consultant episode for health agencies and fundholding practices. RESULTS--The ratio of per capita funding for patients in non-fundholding practices to those in fundholding practices ranged from 59% to 87% for inpatient and day case care and from 36% to 106% for outpatient care. Average specialty costs per episode were similar for fundholding practices and health agencies. CONCLUSIONS--Fundholding practices seem to have been funded more generously than non-fundholding practices in North West Thames.     

Can there be fair funding for fundholding practices?

Most regional health authorities set budgets for fundholding practices according to the amount of care used by the practice population. This article explains why this funding method can only lead to an inequitable allocation of resources between fundholding and non-fundholding practices. Using the experience of North West Thames region, the efforts made to make funding fairer are discussed. The steps that health authorities could take to investigate and reduce the problem are also outlined. In the absence of a capitation formula for funding fundholding practices, the paper suggests that health authorities should do much more to investigate the amount of money they spend on non-fundholding practices. Regions could develop and use other methods to set budgets rather than rely on activity recorded by practices. Regions and the Department of Health should resolve urgently if and how far the budgets for fundholders should be compensated for increases in provider prices.     

Fundholding: a two tier system?

The Calverton practice is one of 30 fundholding practices in Nottinghamshire. Three years after the inception of fundholding, it has achieved a lower outpatient waiting time for its specialist clinics than non-fundholding practices in the region. Its district nursing and health visiting services have been strengthened. Prescribing costs remain below the national average, and making further cost reductions has not been easy. The business plan has allowed the practice to work within a defined budget and develop expertise in the purchasing of services. Through the provision of specialist clinics and increased patient demand the workload of general practitioners has risen by 15% in the past year. But fundholding is still a minority activity in Nottinghamshire--a non-fundholders'' group has been set up to ensure that purchasing of good quality secondary care is equitably distributed among all patients, and this group is extremely active.     

The extent of the two tier service for fundholders.

OBJECTIVE--To examine possible differential changes in outpatient referrals to orthopaedic clinics, attendances, and waiting times between fundholding and non-fundholding general practitioners. DESIGN--Observational controlled study of referrals by general practitioners to orthopaedic outpatients between April 1991 and March 1995. SETTING--District health authority in south-west England. SUBJECTS--10 fundholding practices with 108,300 registered patients; 22 control practices with 159,900 registered patients. MAIN OUTCOME MEASURES--Changes in age standardised referral and outpatient attendance ratios for the year before and the two years after achieving fundholder status; changes in outpatient waiting times. RESULTS--In the year before achieving fundholding status both groups were referring more patients than were being seen. Two years later, referral and attendance ratios had increased by 13% and 36% respectively for fundholders and 32% and 59% for controls, and both groups were referring fewer patients than were being seen. Attendances represented 112% of referrals for fundholders and 104% for controls. In 1991-2, a similar proportion of patients in the two groups was seen within three months of referral. The two hospitals that set up specific clinics exclusively for fundholders showed faster access for patients of fundholders by 1993-4, as did a third hospital without such clinics by 1994-5. CONCLUSIONS--Fundholders increased their orthopaedic referrals less than did controls and achieved a better balance between outpatient appointments and referrals. Their patients were likely to be seen more quickly, particularly if the hospital provided special clinics exclusively for fundholders. Lack of case mix information makes it impossible to judge whether these differences benefit or disadvantage patients.     

A prescribing incentive scheme for non-fundholding general practices: an observational study.

OBJECTIVE: To examine the effects of a financial incentive scheme on prescribing in non-fundholding general practices. DESIGN: Observational study. SETTING: Non-fundholding general practices in former Northern region in 1993-4. INTERVENTION: Target savings were set for each group of practices; those that achieved them were paid a portion of the savings. MAIN OUTCOME MEASURES: Financial performance; prescribing patterns in major therapeutic groups and some specific therapeutic areas; rates of generic prescribing; and performance against a measure of prescribing quality. SUBJECTS: 459 non-fundholding general practices, grouped into three bands according to the ratio of their indicative prescribing amount to the local average (band A > or = 10% above average, B between average and 10% above, C below average). RESULTS: 102 (23%) of 442 practices achieved their target savings (18%, 19%, and 27% of bands A, B, and C respectively). Band C practices that achieved their target had a lower per capita prescribing frequency for gastrointestinal drugs, inhaled steroids, antidepressants, and hormone replacement therapy. There were no other significant differences in prescribing frequency, and no reduction in the quality of prescribing in achieving practices. Total savings of pounds 1.54 m on indicative prescribing amounts were achieved. Payments from the incentive scheme and discretionary quality awards resulted in pounds 463,000 being returned to practices for investment in primary care. CONCLUSIONS: The prescribing behaviour of non-fundholding general practitioners responded to financial incentives in a similar way to that of fundholding practitioners. The incentive scheme did not seem to reduce the quality of prescribing.     

General practitioner fundholding: experience in Grampian.

Proposals for fundholding were greeted with scepticism by many general practitioners, and in Scotland the BMA persuaded the government to allow a scheme to test the arrangements as a demonstration project operating "shadow" practice funds. This allowed the six selected practices to set up administrative and computer systems without the worry of dealing with real money. The shadow fundholding scheme has since been extended to small practices and to a trial of fundholding for all services except accident and emergency. The six practices in the original pilot have all become fundholders and are beginning to effect improvements in the service to their patients. However, with more practices becoming fundholders negotiating contracts with providers is becoming increasingly complicated and more time and money needs to be put into this aspect.     

Fundholding in northern region: the first year.

OBJECTIVE--To describe the experiences of 10 fundholding practices in the Northern region during 1991-2 and to elicit subjective assessments of the impact of their change in status on practice management and patient care. DESIGN--Semistructured interviews were conducted with clinicians and practice managers; other staff in the practices were asked to fill in questionnaires. Questions were asked about the preparatory year, the impact of fundholding on clinical practice and practice management, perceptions of the costs and benefits of fundholding, and views about the future of the scheme. SETTING--10 of the 28 first wave fundholding practices in the Northern region, March-July 1992. RESULTS--Two interviews were conducted in nine practices and one interview in the tenth practice. Replies to the questionnaire were received from 35 general practitioners (73%) and 89 (58%) nonmedical staff. Practices sought independence in applying for fundholding status and found the preparatory year challenging and time consuming. General practitioners thought that the greatest change had occurred in relationships with consultants and the least change in relationships with patients. Most respondents thought that fundholding had changed the way they worked. The perceived benefits of fundholding were mentioned more often than the perceived costs. CONCLUSIONS--The results offer some encouragement to the proponents of fundholding, but more longitudinal studies are needed to evaluate the misgivings of critics of the scheme. Fundholders are uncertain about their ability to make savings year after year, particularly in an increasingly cost contained environment.     

Community care and the fundholder.

According to the government, clearly agreed local arrangements should enable individual general practitioners to make their full contribution to the new system of community care without getting involved in extra bureaucracy. From 1 April the main part of that contribution will be to refer to social services those patients who seem to need social care. Many general practitioners are worried that such referrals will be complex and time consuming and will generate too much extra work. Moreover, general practitioners may also be asked to see patients specifically to help social workers'' assessment procedures, and many fear that such consultations will overwork and underpay them. General practitioner fundholders already use contracts to spell out what they expect from hospital services. From 1 April they will be able to set up contracts for community health services such as district nursing and chiropody, and possibly this might be extended to social aspects of community care. Over the past 14 months Dr Rhidian Morris and his partners in a fundholding practice in Devon have piloted contracts for all aspects of community care. In this article Dr Morris explains how the most radical part of the pilot project--the contract for social care--was set up. He argues that the lessons on communication that came from what was essentially a fundholding project could apply also to non-fundholding practices.     

Non-fundholding in Nottingham: a vision of the future.

The 1991 health service reforms introduced the internal market and grave individual fundholding practices budgets with which they could attempt to secure preferential access to secondary health care for their patients. In the view of many doctors this undermined the principle of equity on which the NHS was founded. In Nottingham 200 non-fundholding general practitioners have joined together to act in liaison with their purchasing health authority. A committed representative group of general practitioners can collectively offer more time and knowledge to the contracting process while minimising the impact on clinical workload. As a large purchaser with low management costs the group has secured access to quality secondary care which is equitably available to all patients, preventing the development of a local two tier service. Nottingham''s non-fundholding model of commissioning is equitable and efficient.