The thesis of this paper is that an analysis of the GP budget holding proposal (in 'Working for Patients'), in the light of the US HMO movement and the managed care industry it has spawned, will provide valuable insight into how the British innovation might function, or not. The paper examines budget holding in three main sections : financial structures and organisational arrangements : management and control : quality of care and equity. A final section draws together a summary and presents eight recommendations, which the authors say should be considered before implementing the budget holding plan.