Effect of fundholding and indicative prescribing schemes on general practitioners' prescribing costs.

Abstract

To compare general practitioners' prescribing costs in fundholding and non-fundholding practices before and after implementation of the NHS reforms in April 1991. Analysis of prescribing and cost information (PACT data; levels 2 and 3) over two six month periods in 1991 and 1992. Oxford region. Three dispensing fundholding practices; five non-dispensing fundholding practices; and seven non-dispensing, non-fundholding practices. Percentage change in net cost of ingredients, number of items prescribed, average cost per item, and proportion of generic drugs prescribed after NHS reforms. 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%). 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.