GP Budget Holding: Scoring a Bullseye or Missing the Target?

Health care expenditure has been increasing steadily for most developed countries over the last few decades, causing governments to increasingly look to organisational and financial reform of health systems. Although the structure and problems of the health care sector in each country may differ, with countries correspondingly adopting different reform agendas, there has been some element of commonality in reforms: that of (managed) competition. There has been some convergence towards the `public contract model', where public financing of health care is combined with a system of contracts between providers and purchasers of care. Of particular importance in such reforms has been the strengthening of primary care. General practitioners (GPs), and primary care physicians, as `gatekeepers' to the health system, are increasingly being called upon to be accountable; not only for their patients' health but also for the wider resource implications of any treatments prescribed. In some countries this role has been formalised through GPs and primary care physicians being allocated set budgets to cover patient care. This approach, although differing slightly across countries, is generally referred to as "budget holding". This is manifest, for instance, through GP Fund holding in the United Kingdom (UK), Health Maintenance Organisations in the United States of America (USA) and Independent Practice Associations in New Zealand (NZ). This paper examines: (i) what such budget holding seeks to achieve; (ii) the effectiveness of the budget holding experience to date in achieving these objectives; and (iii) factors which may facilitate and impede the success of budget holding. It is concluded that the efficiency `target' of budget holding is well in sight for the UK and USA. However, for NZ evidence suggests that the target may be missed altogether