EFFECT OF FUNDHOLDING AND INDICATIVE PRESCRIBING SCHEMES ON GENERAL-PRACTITIONERS PRESCRIBING COSTS

Objective-To compare general practitioners' prescribing costs in fundh olding and non-fundholding practices before and after implementation o f the NHS reforms in April 1991. Design-Analysis of prescribing and co st 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 measure s-Percentage change in net cost of ingredients, number of items prescr ibed, average cost per item, and proportion of generic drugs prescribe d after NHS reforms. Results-Prescribing costs increased in all practi ces 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 o f 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 propor tion of generic drugs prescribed from 26.9% to 34.5% and non-dispensin g fundholders from 44.5% to 48.7%; non-fundholders showed no change (4 7%). Five of the eight fundholding practices made savings in their dru gs 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-fundhol ding practices exceeded their indicative prescribing amounts (range 3. 2-20.0%). Conclusions-Fundholding has helped to curb increases in pres cribing costs, even among dispensing general practitioners, for whom t he incentives are different. Indicative prescribing amounts for non-fu ndholding practices do not seem to have had the same effect.