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Savings will be greater if GPs profit from real budgets, says academic

A leading academic has warned that savings to be made through GP budgets may be compromised if GPs are not faced with making real gains or losses.

Professor Chris Ham, chief executive of the King's Fund and professor of health policy and management at the University of Birmingham, made the assertion in the policy paper GP Budget-Holding: Lessons from across the Pond and from the NHS.

He wrote: ‘The fear of knavish behaviour on the part of GPs may blunt the willingness to offer GPs hard budgets with the prospect of personal gains and losses. If this is the case, then the potential of budget-holding to release resources and improve care may not be realised.'

His paper also suggests the need for caution in promoting budget-holding as a universal solution without regard to the capabilities of practices to manage a budget. His analysis of capitated budgets being devolved to physician groups in the US found:

• Tackling the ‘low-hanging fruit' to reduce annual bed days per population of 1,000 under-65s from 500 to 150 was relatively easy. To then reduce it from 150 to 130 was much harder.

• Very successful physician groups reduced hospital days by two-thirds, generating large profits for themselves and for health plans, albeit at the expense of hospitals.

• Non-successful groups went bankrupt, leaving health plans to pay millions of dollars to physicians and providers.

Professor Ham also warned GPs might not find real budgets appealing in lean times.

‘If PBC has been attractive to only a minority of GPs when the NHS budget has been growing, there must be doubts as to whether GP budget-holding will fare any better when GPs may perceive they are being asked to make cuts in services and take the lead in rationing decisions.'