THE THREAT OF CREAM SKIMMING IN THE POSTREFORM NHS

The allocation of budgets to general practitioners to enable them to p urchase selected hospital services has been one of the most imaginativ e elements of the recent National Health Service reforms in Britain. H owever, reliance on 'historic costs budgeting' has weakened the effici ency incentives of fund-holding, while perpetuating the large variatio ns in resource use endemic in general practice. On the other hand, pol icy changes aimed to introduce elements of capitation funding, althoug h welcome, raise the spectre of 'cream skimming'. The paper explores t he potential for protection against 'cream skimming' offered by incorp orating chronic health factors into the formula.