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Croxson B, Propper C and Perkins A, (2001)
‘Do doctors respond to financial incentives? UK family doctors and
the GP fundholder scheme’
Journal of Public Economics, 79 (2): 375-398
- Examines the impact of the GP Fundholding scheme on the behaviour of
fundholding GPs.
- Argues that the way the GP fundholding scheme as structured
gave fundholders a financial incentive to increase non-emergency referrals
to hospital in
the year before they became fundholders, and to lower them thereafter.
- This was because fundholder budgets, in the early years of the scheme,
were set according to activity levels in the year before being awarded
fundholder status. Thus by increasing activity in the year prior to
fundholding, GP’s
could inflate their budgets.
- Uses a data set containing all admissions
by 59 GPs over a four year period in North West Anglia.
Key results:
- The results show a clear response by fundholding GPs to financial
incentives.
- They have a rise in elective admissions prior to becoming
a fundholder, and a fall in admissions in the year in which they
assume fundholder
status.
- The rise in admissions in the preparatory year is in the
order of 10%, and the fall in the following year is of a similar
order of magnitude.
- Since the (inflated) budgets of fundholders are
taken from a fixed NHS budget, this result implies a transfer of
resources from non-fundholding
GPs to fundholders.
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