General practice fundholders' prescribing savings in one region of the United Kingdom, 1991-1994

Since 1991, fundholding general practitioners in the UK have had a financial incentive to contain prescribing costs. Research has confirmed that fundholding practices have contained their prescribing costs more effectively than non-fundholding practices, but how much fundholders have actually saved by changing their prescribing is difficult to quantify. Fundholders are allocated a prescribing budget, and the underspend on this budget has been taken to represent savings produced by changing prescribing behaviour. However, this assumes accuracy of budget setting, which has been questioned. The objective of this study was to estimate the true savings in prescribing made by fundholders during the first 3 years of fundholding, without making assumptions about the accuracy of budget setting. We compare this to underspends on prescribing budgets. The results suggest that budget setting did not give fundholders over-generous budgets and that budget underspends are justified by the true savings in prescribing.