BACKGROUND The cornerstone of the National Health Service (NHS) reforms was the establishment of an internal market, which separated purchasing and providing roles. As purchasers of care, general practice fundholders were seen as a pivotal part of the 'new patient-led NHS', which was intended to lead to improved cost-containment and cost-effectiveness, quality of care, and patient choice and empowerment. AIM To review published evidence of the extent to which these objectives may have been achieved over the past six years. METHOD Keyword search of on-line databases (MEDLINE and Econ-lit) from 1990 to 1996, plus manual search of references within those articles identified. RESULTS In the absence of any formal evaluation of fundholding, it is difficult to assess the overall success of this reform. However, in terms of cost-containment and cost-effectiveness, there is mixed evidence. In some areas, such as prescribing, the evidence suggests cost-savings, although the evidence is less clear on reductions or changes in referrals. There is also evidence that suggests that improvements in prescribing may have been achieved at substantial additional administration and transaction costs. With respect to quality of care, the evidence suggests that, although quality in the procedural aspects of health provision has improved, there is little evidence about how health outcomes may have been affected. In terms of patient choice and empowerment, the evidence suggests that, whilst general practitioner choice of secondary providers has improved, little progress has been made with regard to increased consumer choice. CONCLUSION Evidence concerning the success or otherwise of general practice fundholding over the past six years is incomplete and mixed. The major deficiency concerns any effect on health outcomes that may be the result of fundholding. Until such research is conducted, the jury will have to remain out on whether fundholding has secured improved efficiency in the delivery of health care.