GP budget holding in the United Kingdom: Learning from American HMOs

A key component of the 1989 British National Health Service White Paper, 'Working for Patients', is the so-called budget holding plan for general practitioners. This controversial proposal calls on GPs to manage their patients' budgets for consultant (specialist) services and hospital care. Most aspects of the scheme, now only contemplated in the U.K., have functioned for years in American health maintenance organisations (HMOs). The thesis of this article is that an analysis of the GP budget holding proposal, in light of the many years of experience with HMOs, will provide valuable insight into how the British innovation might (or might not) function. Moreover, we believe the U.S. HMO experience has a high degree of relevance for the design, implementation and management of budget holding practices in the NHS of the 1990s, as well as other similar proposals being considered across the European continent.