Back to the future?
Authors: Richard Q Lewis
Journal: BMJ (2004)

The NHS Improvement Plan and new Department of Health guidance sets out proposals to revive commissioning by individual general practices of health services in the NHS in England, as part of a commitment to explore and evaluate new models of devolved commissioning.1 2 From April next year, any general practice that so desires can obtain an indicative commissioning budget from their primary care trust.

We have been here before. For many people, practice based commissioning will seem to be simply general practice fundholding rebadged. The new proposals bear striking similarities to fundholding, sharing such characteristics as budget holding by general practices, commissioning freedoms for individual practices, and direct financial incentives for general practitioners. Fundholding was, perhaps, the most contested element of the NHS internal market setup by the last Conservative government and was opposed bitterly by the opposing Labour Party. The creation in 1999 of collective primary care commissioning through primary care groups (which evolved into primary care trusts) was proposed as an antidote to the perceived drawbacks of fundholding, in particular, inequities in access to elective care and high transaction costs. So why should a Labour government court controversy by rekindling interest in such a similar policy now?

Three compelling reasons may be behind this apparent shift in policy.3 Firstly, a widespread belief prevails that primary care trusts are failing to have sufficient impact as commissioners of hospital care.4 Such failure is gaining in importance as NHS trusts convert to foundation hospitals and gain greater freedom, and as new incentives for cost-per-case contracting are introduced to the NHS through the new policy Payment by Results.5 Second, frontline primary care clinicians may not be sufficiently engaged with the work of their primary care trusts, or may perceive that they wield little influence over the actions of those trusts.6

The third and perhaps most important reason lies in the UK government's anxieties over demand management. The current push to shorten waiting times for treatment while increasing the capacity of the NHS may result in rapid growth in patients' demands for services. Practice based commissioning is intended to re-engage clinicians (particularly, but not exclusively, general practitioners) in the process, and the related financial incentives are intended to encourage general practitioners to scrutinise their referrals to hospital and to seek ways of enhancing primary care to prevent avoidable admissions to hospital. The new public service agreement target to reduce days spent in hospital for emergencies by 5% by 2008 is also concentrating minds.7

So what can we learn from our experiences in the past? A systematic review of research on fundholding during the mid 1990s was equivocal about the benefits of the scheme.8 However, research published after the demise of fundholding has allowed a more fulsome appraisal of the initiative. For example, one important study concluded that patients referred through fundholding experienced waiting times for treatments that were 8% shorter than those for corresponding patients of non-fundholding general practitioners.9 Another study, based on admission data for four years, showed that fundholders reduced admission rates for elective procedures by 3.3% compared with non-fundholders.10 The Achilles heel of small-scale, commissioning by practices has often been seen to be the management of financial risk. However, research into “total purchasing” pilots (extended fundholding schemes incorporating a broader range of services and often involving more than one practice) showed that single practices and small multipractice groups managed these risks better than large multipractice ventures.11

Despite such evidence, many will be anxious about the return of anything resembling fundholding. Yet the new incarnation of commissioning by practices may be able to avoid at least some of the main pitfalls of unfair access to services and high administrative costs. The NHS has changed considerably since the heyday of fundholding. The Payment by Results policy introduces a standard price tariff and a new mechanism for contracting, and opportunities for individual general practice commissioners to negotiate advantageous prices (to the disadvantage of other general practitioners and patients) are therefore disappearing. The national tariff should also reduce transaction costs. Primary care trusts will act as the contracting agent for commissioners in practices, streamlining the process and reducing costs still further and the additional costs of practice based commissioning will be funded from savings against the budget. Unlike fundholding doctors, the new practice based commissioners will not be legally autonomous and will remain under the aegis of primary care trusts. This will provide an opportunity to marry the dynamism of devolution with the strategic planning and public accountability of primary care trusts. Practices that commission services in the new scheme are less likely to be seen as wild cards as they were in the 1990s.12

Nor will the patients of these new commissioners enjoy access to a far wider range of services. There are now guarantees of greater choice for all patients and, from 2008, patients will have unrestricted choices to see any provider meeting minimum quality standards and the NHS price tariff.1 Furthermore, since the demise of fundholding, the NHS has worked to decrease variation in services across the country. National service frameworks, guidelines from the National Institute for Clinical Effectiveness, inspections by the Healthcare Commission, and new national core and developmental quality standards are all aiming to regulate the services available to NHS patients. This new environment might allay the fears of all save the most hardened critics of fundholding.