The effects of fundholding in general practice on prescribing habits three years after introduction of the scheme.

OBJECTIVES--To observe changes in prescribing practice that occurred after the introduction of fundholding in first wave practices and to contrast these with changes occurring in similar non-fundholding practices. DESIGN--Prospective observational study. SETTING--Oxford region fundholding study. SUBJECTS--Eight first wave fundholding practices and five practices that were not interested in fundholding in 1990-1, which were similar in terms of practice size, training status, locality, and urban rural mix. Three of the fundholding and none of the non-fundholding practices were dispensing practices. MAIN OUTCOME MEASURES--Changes in prescribing practice as measured by net cost per prescribing unit, cost per item, number of items prescribed, and substitution rates for generic drugs three years after the introduction of fundholding. Data for fundholding practices were analysed separately according to whether they were dispensing or non-dispensing practices. RESULTS--Prescribing costs rose by a third or more in all types of practice. The patterns of change observed in this cohort after one year of fundholding were reversed. No evidence existed that fundholding had controlled prescribing costs among non-dispensing fundholders; costs among dispensing fundholders rose least, but the differences were small compared with the overall increase in costs. CONCLUSIONS--Early reports of the effectiveness of fundholding in curbing prescribing costs have not been confirmed in this longer term study.     

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.     

The effect of deprivation on variations in general practitioners' referral rates: a cross sectional study of computerised data on new medical and surgical outpatient referrals in Nottinghamshire.

OBJECTIVE: To determine the effect of deprivation on variations in general practitioners'' referral rates using the Jarman underprivileged area (UPA(8)) score as a proxy measure. DESIGN: Cross sectional survey of new medical and surgical referrals from general practices to hospitals (determined from hospital activity data). SETTING: All of the 183 general practices in Nottinghamshire and all of the 19 hospitals in Trent region. MAIN OUTCOME MEASURES: The relation between the referral rates per 1000 registered patients and the practice population''s UPA(8) score (calculated on the basis of electoral ward), with adjustment for the number of partners, percentage of patients aged over 65 years, and fundholding status of each practice. RESULTS: There was a significant independent association between deprivation, as measured by the UPA(8) score, and high total referral rates and high medical referral rates (P < 0.0001). The UPA(8) score alone explained 23% of the total variation in total referral rates and 32% of the variation in medical referral rates. On multivariate analysis, where partnership size, fundholding status, and percentage of men and women aged over 65 years were included, the UPA(8) score explained 29% and 35% of the variation in total and medical referral rates respectively. CONCLUSION: Of the variables studied, the UPA(8) score was the strongest predictor of variations in referral rates. This association is most likely to be through a link with morbidity, although it could reflect differences in patients'' perceptions, doctors'' behaviour, or the use and provision of services.     

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.     

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.     

Fundholding in general practice and financial risk.

OBJECTIVE--To estimate the financial effect of random yearly variations in need for services on fundholding practices with various list sizes. DESIGN--A simulation model was derived using historical data on general practitioner referrals for the 113 surgical procedures covered by the general practitioner fund, combined with data on the hospital prices for those procedures. PATIENTS--Resident population of Central Birmingham Health Authority. MAIN OUTCOME MEASURES--Expected expenditure on the relevant surgical procedures for the whole district and for practices with list sizes of 9000, 12,000, 15,000, 18,000, 21,000, or 24,000 for each of 100 simulated years. RESULTS--By using average hospital prices for the West Midlands region the mean (SD) annual expenditure for the 179,400 residents was 4,832,471 pounds (87,149 pounds); the random variation between the 5th and 95th most expensive years was 5.7% of the mean cost. For a practice with a list size of 9000 the values were 244,891 pounds (18,349 pounds), with a variation of 27.5%. With a list size of 24,000 the values were 652,762 pounds (32,512 pounds), with a variation of 15.3%. CONCLUSIONS--Random variations in need for inpatient services will have a significant financial impact on the practice fund. The problem will be particularly great for smaller practices. Additional measures are required to ensure that the scheme is not undermined and that the potential benefits are secured.     

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.     

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.     

An economic evaluation of thrombolysis in a remote rural community.

OBJECTIVES: To assess the cost effectiveness of community thrombolysis relative to hospital thrombolysis by investigating the extra costs and benefits of a policy of community thrombolysis, then establishing the extra cost per life saved by community thrombolysis. DESIGN: Economic evaluation based on the results of the Grampian region early anistreplase trial. SETTING: 29 rural general practices and one secondary care provider in Grampian, Scotland. SUBJECTS: 311 patients recruited to the Grampian region early anistreplase trial. INTERVENTIONS: Intravenous anistreplase given either by general practitioners or secondary care clinicians. MAIN OUTCOME MEASURES: Survival at 4 years and costs of administration of thrombolysis. RESULTS: Relative to hospital thrombolysis, community thrombolysis gives an additional probability of survival at 4 years of 11% (95% confidence interval 1% to 22%) at an additional cost of 425 pounds per patient. This gives a marginal cost of life saved at 4 years of 3,890 pounds (1,990 pounds to 42,820 pounds). CONCLUSIONS: The cost per life saved by community thrombolysis is modest compared with, for example, the cost of changing the thrombolytic drug used in hospital from streptokinase to alteplase.     

Costs and cost effectiveness of cardiovascular screening and intervention: the British family heart study.

OBJECTIVE--To measure costs and cost effectiveness of the British family heart study cardiovascular screening and intervention programme. DESIGN--Cost effectiveness analysis of randomised controlled trial. Clinical and resource use data taken from trial and unit cost data from external estimates. SETTING--13 general practices across Britain. SUBJECTS--4185 men aged 40-59 and their 2827 partners. INTERVENTION--Nurse led programme using a family centered approach, with follow up according to degree of risk. MAIN OUTCOME MEASURES--Cost of the programme it self; overall short term cost to NHS; cost per 1% reduction in coronary risk at one year. RESULTS--Estimated cost of putting the programme into practice for one year was 63 pounds per person (95% confidence interval 60 pounds to 65 pounds). The overall short term cost to the health service was 77 pounds per man (29 pounds to 124 pounds) but only 13 pounds per woman (-48 pounds to 74 pounds), owing to differences in utilisation of other health service resources. The cost per 1% reduction in risk was 5.08 pounds per man (5.92 pounds including broader health service costs) and 5.78 pounds per woman (1.28 pounds taking into account wider health service savings). CONCLUSIONS--The direct cost of the programme to a four partner practice of 7500 patients would be approximately 58,000 pounds. Annually, 8300 pounds would currently be paid to a practice of this size working to the maximum target on the health promotion bands, plus any additional reimbursement of practice staff salaries for which the practice qualified. The broader short term costs to the NHS may augment these costs for men but offset them considerably for women.     

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.