Budget-holding: the answer to Australian primary care reform?

In common with other Organisation for Economic Cooperation and Development (OECD) countries, Australia is experiencing growth in expenditure on health care. However, while many other nations continue to pursue some variation of managed competition to address these problems, Australia has chosen a more incremental reform path, with initiatives such as the General Practice Strategy, restrictions in doctor supply and coordinated care trials. This article reviews the likely effectiveness of such initiatives in the light of experience and evidence of budget-holding in achieving similar objectives overseas. It concludes that budget-holding offers a more effective strategy than current 'piecemeal' reforms to contain costs and increase efficiency within Australian health care.