PubMed · 589252
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D P Begley. 1977-11-26. Functional budgeting.. https://doi.org/10.1136/bmj.2.6099.1419-c
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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.
The instrument through which a commissioner purchases health services from a provider is, as in other walks of life, a contract, so considerable importance has been attached by the NHS Executive to the contracting mechanism. A contract should in theory influence the quality of the service provided, but they are in many cases an inappropriate vehicle for driving clinical care. Much clinical activity is related to the management of chronic diseases and the effects of aging. The implicit contract here is based not on process and outcome measures but on mutual trust between doctors and patients that the doctors will provide the best care they can within budgetary constraints.