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Modelling the behaviour of general practitioners: a theoretical foundation for studies of fundholding


  • Carlos Lerner
  • Karl Claxton

    () (Centre for Health Economics, The University of York)


Despite its potentially profound repercussions, the general practitioner fundholding scheme has received relatively little attention from researchers. We provide here a theoretical foundation for empirical studies of fundholding. We begin by reviewing the incentives of the fundholding scheme. The responses of GPs to these incentives depend on the objectives of GPs, raising the questions: what are GPs trying to maximise? What GP objectives are useful in explaining their behaviour? After addressing these questions, we formulate several models of behaviour, focusing in turn on referrals, prescribing, workload and the agency relationship between the GP and the patient. These models illustrate how we can provide a conceptual basis for researching various aspects of fundholding. Modelling GP behaviour yields several benefits: it induces us to explicitly identify our assumptions; it illuminates the interactions between incentives and GP objectives; and it can suggest interesting empirical questions. Studies based on such explicit analytical frameworks can elucidate how GPs respond to the incentives of the fundholding scheme.

Suggested Citation

  • Carlos Lerner & Karl Claxton, 1994. "Modelling the behaviour of general practitioners: a theoretical foundation for studies of fundholding," Working Papers 116chedp, Centre for Health Economics, University of York.
  • Handle: RePEc:chy:respap:116chedp

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    References listed on IDEAS

    1. Reinhardt, Uwe E., 1985. "The theory of physician-induced demand reflections after a decade," Journal of Health Economics, Elsevier, vol. 4(2), pages 187-193, June.
    2. Manning, Willard G, et al, 1987. "Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment," American Economic Review, American Economic Association, vol. 77(3), pages 251-277, June.
    3. Calnan, Michael & Butler, J. R., 1988. "The economy of time in general practice: An assessment of the influence of list size," Social Science & Medicine, Elsevier, vol. 26(4), pages 435-441, January.
    4. Woodward, Robert S. & Warren-Boulton, Frederick, 1984. "Considering the effects of financial incentives and professional ethics on `appropriate' medical care," Journal of Health Economics, Elsevier, vol. 3(3), pages 223-237, December.
    5. Groenewegen, Peter P. & Hutten, Jank B. F., 1991. "Workload and job satisfaction among general practitioners: A review of the literature," Social Science & Medicine, Elsevier, vol. 32(10), pages 1111-1119, January.
    6. Phelps, Charles E., 1986. "Induced demand -- can we ever know its extent?," Journal of Health Economics, Elsevier, vol. 5(4), pages 355-365, December.
    7. Dranove, David, 1988. "Demand Inducement and the Physician/Patient Relationship," Economic Inquiry, Western Economic Association International, vol. 26(2), pages 281-298, April.
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    Cited by:

    1. Glazer, Jacob & Shmueli, Amir, 1995. "The physician's behavior and equity under a fundholding contract," European Economic Review, Elsevier, vol. 39(3-4), pages 781-785, April.
    2. Antonia Morga & Ana Xavier, "undated". "Hospital specialists' private practice and its impact on the number of NHS patients treated and on the delay for elective surgery," Discussion Papers 01/01, Department of Economics, University of York.
    3. Wilton, Paula & Smith, Richard D., 1998. "Primary care reform: a three country comparison of `budget holding'," Health Policy, Elsevier, vol. 44(2), pages 149-166, May.

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    budgets; fundholding;


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