Working paper 98/001 - Abstract

Do doctors respond to financial incentives? UK family doctors and the GP fundholder scheme

Bronwyn Croxson*, Carol Propper and Andy Perkins*

* School of Health, University of East Anglia

The 1991 reforms to the UK NHS created a group of buyers of hospital care from amongst primary care physicians. The implementation of the reforms was such that these buyers had incentives to increase their use of hospital services prior to entering the scheme rather than providing better care once in the scheme. It has been argued that non-financial motives would limit such behaviour. The papers show that these health care providers did respond to the financial incentives offered by the scheme, increasing hospital-based activity prior to entry and decreasing it thereafter.

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