Incentives and health policy: primary and secondary care in the British National Health Service.

This paper argues that issues concerning incentives and motivation are crucial to recent reforms to the British National Health Service. It examines how the incentive structure of General Practitioners with respect to the interface between primary and secondary care changed with the introduction of GP fundholding, and how it might change further with the new Primary Care Groups. It concludes that the effectiveness of the internal incentive structure of the new groups will depend on the location of power within the PCGs, and that the external incentives involving the possibility of heavy central monitoring may affect the behaviour and motivation of GPs in potentially harmful ways.