Price of reforms outweighs results

NHS market: Many GP fundholders are unable to buy more effective health care as Dorell moves to extend contracts

Fierce criticism of the effectiveness of GP fundholding, one of the flagships of the Government's National Health Service reforms, came yesterday from the Audit Commission, the independent public sectorwatchdog.

The costs of the scheme have more than outweighed the efficiency savings, the commission said. Few fundholders have succeeded in purchasing more effective health care for their patients and there are serious question marks over how the savings that have been made are spent. The scheme needs to be more accountable, the entry criteria should be tightened and an accreditation system may be needed which would see some GPs lose their fundholding status, the commission said.

The biggest survey yet of the five-year-old scheme, which covers a third of GPs and half the population, shows that the best fundholding practices have achieved real gains for their patients - dramatically re-shaping services for their benefit.

But such practices are "rare", the report, What the Doctor Ordered, says. They account for perhaps 1 in 10 of the 2,200 fundholders. Most have made some improvements. But the majority have made only "changes at the margins", continuing to purchase "the same services, in the same quantity, from the same providers as the health authority purchased on their behalf before they became fundholders".

Many fundholders "have yet to develop much beyond the basics", the report says, and the question that must be asked is "whether they are providing sufficient improvements to justify the costs". Up to last year pounds 232m had been spent in management costs on fundholding but only pounds 206m in efficiency savings were realised. Millions more are spent by health authorities and trusts on administration costs which need to be minimised.

GPs might be expected to buy more effectivehealth care, the report says. But few fundholders hit the NHS Executive's target for day surgery and fewer than one in five examine re-admission or infection rates to measure outcomes.

Budget management is patchy and health authorities lack powers to deal with "windfall" savings. There is debate about whether savings are being well spent, with 60 per cent going on improving surgeries.

The report argues that fundholders need to work closely with health authorities to ensure they achieve benefits for all patients, not just for their own.

Health authorities should identify their "leading edge" practitioners and use them to help underachievers. For some GPs successful purchasing "will be more likely in a health authority-led 'locality' arrangement" - an approach close to that advocated by Labour.

Harriet Harman, Labour's health spokeswoman, said the report made the case for Labour's approach. "The flaws that have been highlighted could not be addressed without yet more administrative expense."

But Stephen Dorrell, the Secretary of State for Health, said the Government remained "committed to its development" and it was "nonsense" to say there was no framework of accountability. The report showed that "if every fundholder delivered the services of the best there would be huge benefits for patients".

The British Medical Association welcomed the report, saying it was important to learn from the scheme's early experience, while the National Association of Fundholding Practices said it confirmed fundholding success.

'What the Doctor Ordered'. Audit Commission. HMSO pounds 17.