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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.

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