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.