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A budget‐holding program was implemented in nine primary care clinics in the Negev district of Kupat Holim Clinic, Israel’s largest sick fund. This study, carried out from 1991 to 1994, evaluates the impact of this program on patient satisfaction and other selected indicators of quality of care, using a controlled case study methodology. Structured questionnaires were used in face‐to‐face interviews with a representative stratified sample of 523 patients registered in the clinics. Patient reports were used to measure patient satisfaction, accessibility of services, comprehensiveness of care, responsiveness to patients’ needs and performance of preventive medicine activities. Other research tools included staff surveys, in‐depth interviews and administrative data on transfer among sick funds. The findings counter fears that budgetary control and cost‐containment negatively affect quality of care and patient satisfaction. However, the program did not fulfill expectations regarding improvement in clinic services and patient satisfaction.

Describes and contrasts the perceptions of formal and informal authority of hospital directors of two different kinds of organizations: hospitals that are part of public multi‐hospital organizations (PMOs) and independent hospitals. Indicates that all the directors perceive their informal authority to be greater than their formal authority. However, there is a gap in the perception of formal and informal authority by directors of the two types of hospital. Directors of independent hospitals perceive themselves to have more formal and informal authority than do their colleagues at hospitals that are part of PMOs. Both structural and personal explanations for these findings are given. In addition, discusses the implications for policy making of the source of authority, informal, and formal authority in the transition to autonomous semi‐independent hospitals in a changing environment.