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.     

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.     

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 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.     

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.     

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.     

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.     

Coronary artery surgery: are women discriminated against?

OBJECTIVE--To determine whether the sex differences in access to cardiac surgery observed in the United States exist in the United Kingdom. DESIGN--Retrospective analysis of routinely collected data. SETTING--South West Thames and North West Thames regional health authorities. SUBJECTS--8564 patients discharged from hospital with a principal diagnosis of coronary heart disease in 1987-8 in South West Thames region and 15243 discharges in North West Thames region in 1990-1. MAIN OUTCOME MEASURES--Performance of angiography or coronary artery bypass surgery. RESULTS--In all age groups and among patients with a principal diagnosis of either angina or chronic ischaemia men were significantly more likely than women to undergo revascularisation in both regions. Using multiple logistic regression to control for potential clinical and demographic confounders, the male to female odds ratio for revascularisation among all cases was 1.59 (95% confidence interval 1.25 to 2.03) in South West Thames region and 1.47 (1.32 to 1.63) in North West Thames region. CONCLUSION--There appears to be a systematic difference in the treatment received by men and women in the United Kingdom. The reasons for this are uncertain.     

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.     

Survival with bladder cancer,evaluation of delay in treatment,type of surgeon,and modality of treatment.

OBJECTIVE--To determine whether length of delay before treatment; specialty and grade of the surgeon; and use made of surgery, radiotherapy, and chemotherapy influenced the survival of patients with cancer of the bladder, after adjusting for case severity. DESIGN--Retrospective cohort study. SETTING--South East and South West Thames health regions. PATIENTS--609 men aged under 75 resident in the South Thames regions who had been registered as new cases of bladder cancer in 1982, 35 of whom were excluded, leaving 574 eligible patients. Analysis was based on 75% retrieval rate for case notes. MAIN OUTCOME MEASURES--Duration of survival from date of diagnosis of the bladder tumour. RESULTS--10 prognostic variables were used to adjust for case severity. The median delay from referral to first treatment was 48 (interquartile range 27-84) days. Treatment after a short delay was associated with shorter survival because of the early treatment of more severe cases. Consultants treated 68% of patients, trainee surgeons treated less severe cases. Initial treatment was by a urologist in 67% of cases, but the specialty of the surgeon was not associated with prognosis. The associations of radiotherapy, cystectomy, and systemic chemotherapy with survival were interpreted in terms of selection bias as well as therapeutic effect. CONCLUSION--Case severity was the most important influence on survival and influenced length of delay before treatment, grade and specialty of the surgeon, and main treatment allocation. After adjusting for case severity variations in these processes of care were not strongly associated with variations in survival.     

General practitioners' views about the statutory annual practice report.

OBJECTIVE--To ascertain the views of primary care professionals about the current purpose, uses, potential, and workload implications of the statutory general practice annual report. DESIGN--Postal questionnaire survey. SETTING--General practices in the Northern region. SUBJECTS--All practices in the region that were singlehanded, fundholding, non-fundholding and with more than five partners, and a one in three random sample of all non-fundholding practices (n = 318). RESULTS--263 practices responded (83%). The report took a median of 12 hours to produce (95% confidence interval 11 to 15 hours; interquartile range 7-35). The main perceived purpose of the report was to monitor practice activity (165 respondents; 63% (95% confidence interval 57% to 69%)), but 44 respondents (17%; 13% to 22%) produced it only because it was contractually required. Practices included statutory and non-statutory data in these reports and would have liked comparative practice activity information (155 respondents; 59%) and "good ideas" (165 respondents; 63%) fed back to them. Respondents would have liked the annual report used to improve practice development planning (122 respondents; 46% (40% to 52%)), to facilitate audit (115 respondents; 44% (38% to 50%)), and to influence resource allocation (104 respondents; 40% (34% to 46%)). One hundred and eighteen practices (45%; 39% to 51%) would produce an annual report even if not contractually required. Data collected were perceived to be already available elsewhere. CONCLUSIONS--Primary care professionals have concerns about the current annual report. They would prefer to collect relevant, standardised data which could lead to better audit, planning, and resource allocation.     

Factors affecting uptake of measles,mumps, and rubella immunisation.

OBJECTIVE--To study factors affecting uptake of measles, mumps, and rubella immunisation. DESIGN--Cohort study using data from computerised child health systems. SETTING--10 health districts in North East Thames and North West Thames regions. SUBJECTS--7841 children born in January to March 1990 and resident in the districts up till the end of October 1991. MAIN OUTCOME MEASURES--Overall uptake of measles, mumps, and rubella immunisation, variation of uptake among groups of children, and odds ratio of being vaccinated against measles, mumps, and rubella. RESULTS--The overall uptake rate of measles, mumps, and rubella immunisation for the study cohort in the 10 districts was 82%. Wide variation was identified among children with different demographic characteristics. Lower uptake was associated with absent or incomplete primary immunisation, including omission of pertussis vaccine. Other factors affecting uptake included the type of resident district, birth order, where registered for immunisation (general practitioner or clinic), and one parent family status. CONCLUSIONS--Many districts have difficulties in meeting the 90% target for measles, mumps, and rubella immunisation, mainly because of the characteristics of their local population. To increase overall coverage, the health service should target families with adverse factors, especially those whose children have missed previous immunisations.     

Health status of the temporarily homeless population and residents of North West Thames region.

OBJECTIVES--To survey the health status of the temporarily homeless population of North West Thames region and make comparisons with regional residents. DESIGN--Direct interview with standardised questionnaires. SETTING--Temporarily homeless people resident in hotels in the London boroughs in the North West Thames region and a random sample of regional residents. SUBJECTS--137 hotels thought to be providing accommodation to homeless people selected at random from a list of 295. 113 (82%) participated in the study, and 319 (61%) of 522 homeless people approached participated. The study was restricted to adults aged 16 and over selected at random. RESULTS--The homeless population was predominantly female (195/319; 61%), young (229 (72%) aged 16-34), and poor, 54% (172/319) receiving income support. 207 subjects (65%) had dependent children aged 16 and under. Rates of acute illness among homeless people (32 cases; 10%) were similar to those reported by regional residents. The prevalence of longstanding limiting illness (108 cases; 34%) was similar to that for regional residents, but the prevalence of mental morbidity was twice that for the region as a whole (145 cases (45%) v 1485 (18%)). Utilisation of general practitioner services, accident and emergency departments, and inpatient admission was much higher by the homeless population than by regional residents. General practitioner registration rates were above 90% for the homeless sample. CONCLUSIONS--Survey data provide empirical evidence about the nature and characteristics of the temporarily homeless population. The high service utilisation recorded may, in part, have resulted from the higher morbidity in this sample of homeless people. The concentration of homeless people into specific locations may suggest that additional funding should be provided to the district which provides care to this group. However, such funding should not necessarily be used for additional acute care but should be used to purchase appropriate services which meet the health needs of this very young, poor and vulnerable group.     

Are readmissions avoidable?

OBJECTIVE--To examine the possible use of readmission rates as an outcome indicator of hospital inpatient care by investigating avoidability of unplanned readmissions within 28 days of discharge. DESIGN--Retrospective analysis of a stratified random sample of case notes of patients with an unplanned readmission between July 1987 and June 1988 by nine clinical assessors (263 assessments) and categorisation of the readmission as avoidable, unavoidable, or unclassifiable. SETTING--District in North East Thames region. 481 General medical, geriatric, and general surgical inpatients with a readmission at 0-6 days or 21-27 days after the first (index) discharge between July 1987 and June 1988 from whom 100 case notes were selected randomly and of which 74 were available for study. MAIN OUTCOME MEASURES--Assessment of readmissions as avoidable, unavoidable, unclassifiable, variability of assessment within cases and variability among assessors according to specialty and duration to readmission. RESULTS--General medical and geriatric readmissions and surgical readmissions at 0-6 days after discharge were more likely to be assessed as avoidable than those at 21-27 days (medical readmissions 32 v 6%, surgical admissions 49 v 19%). General surgical readmissions were significantly more frequently assessed as avoidable than general medical and geriatric readmissions. The extent of agreement between doctors varied, with general medical and geriatric readmissions at 21-27 days after first discharge causing the greatest variability of judgment. CONCLUSIONS--Differences were apparent in the extent of avoidability of readmissions in different groups of admissions. However, assessors rated only 49.3% of the group with the highest proportion of avoidable admissions (surgical readmissions at 0-6 days) as avoidable. The remainder were thought to be unavoidable except for 2%, which could not be classified. The use of readmission rates as an outcome indicator of hospital inpatient care should be avoided.     

Regional variations in the use of home care services in Ontario, 1993/95

BACKGROUND: Although regional variations in the use of many health care services have been reported, little attention has been devoted to home care practices. Given the dramatic shift in care settings from hospitals to private homes, it is important to determine the extent to which home care practices vary by geographic region. METHODS: Data from the Canadian Institute for Health Information and the Ontario Home Care Administration System database were used to assess regional variations in rates of home care use following inpatient care and same-day surgery for the fiscal years 1993, 1994 and 1995. Various measures of regional variation were employed. RESULTS: Of the 2,870,695 inpatient separations and 1,803,307 same-day surgery separations during the study period, 359,972 and 64,541, respectively, were followed by home care. The rate of home care use per 100 separations was 12.5 for inpatients and 3.6 for same-day surgery patients. There was a a 3.5-fold regional variation in the rates of home care use following inpatient care and a 7-fold variation in rates of use following same-day surgery. Additional home care funding to attain calculated target rates was estimated to be $48.9 million (30% of expenditures for patients recently discharged from hospital over the study period). For a 20% increase in service provision it was estimated that an additional injection of $42.2 million is required. INTERPRETATION: The wide regional variations in rates of home care use highlight the importance of modifying home care funding to ensure that all residents of Ontario have equal access to services. To achieve this our estimates suggest that a substantial increase in home care funding is warranted.     

Attempt at deriving a formula for setting general practitioner fundholding budgets.

OBJECTIVE--To explore the possibility of using routine Hospital Episode Statistics, census data, and vital statistics to derive weights for an equitable capitation formula for setting general practitioner fundholding budgets for buying acute hospital services. DESIGN--Analysis of a routine dataset of 9 million hospital episodes in 1991-2, extracting elective general practitioner fundholding procedures, combined with 1991 census variables, vital statistics, and data on supply of health care at ward level. Costs were attached to each procedure according to the average cost of the relevant "Mersey" band category. MAIN OUTCOME MEASURES--Variation in age and sex adjusted expenditure per head on fundholding procedures across wards modelled for the impact of health and social needs variables after adjusting for variations in supply. RESULTS--No sensible simple model including determinants of use other than age and sex could be derived. The most parsimonious but statistically acceptable model showed that though standardised mortality ratio and self reported illness and several social class variables were associated with utilisation, the signs and the size of the coefficients were contradictory. The most important explanation of variation was provided by age and sex differences between wards. CONCLUSIONS--An equitable system of setting general practitioner fundholders'' budgets is needed. In the short term age and sex weighted capitation should form the principal basis of fundholder budgets. Utilisation data at ward level are inadequate for developing a formula which adequately adjusts for the differences in the health care needs of populations. A capitation formula based on information derived from individual cohort data may be the only means of promoting equity and efficiency and of avoiding discriminating against patients with known high cost health problems.     

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.