Objectives: To determine whether fundholding patients have shorter waiting times for surgery than non-fundholding patients and to establish if any such differences resulted from practices attaining fundholding status. Design: Comparison of waiting times of fundholding and non-fundholding patients for elective surgery covered by the fundholding scheme at four providers over four years. Comparison of the waiting times for patients of practices in their last year outside and first year inside the fundholding scheme with those for patients of practices remaining non-fundholding. Setting: West Sussex. Subjects: Over 57 000 patients on the elective waiting list who had operations purchased by a health authority or fundholding practice during 1992-6. Patients with booked or planned elective admissions were excluded. Main outcome measures: Waiting times for patients of fundholding and non-fundholding patients. Results: Patients of fundholding practices had significantly shorter waiting times than those of non-fundholders for all four providers and over all four years. Waiting times for patients did not fall until the year that the practices joined the fundholding scheme. Conclusions: Fundholding shortens waiting times. This may be because purchasing of elective surgery is best done at a practice level or because fundholding practices are funded overgenerously. Debate on the creation of a two tier system as a result of general practice fundholding is based largely on anecdotal evidence Patients of fundholding practices on the elective waiting list at four NHS providers in West Sussex over four years had significantly shorter waiting times for the elective surgery covered by the fundholding scheme than did non-fundholding patients Waiting times for patients of practices in the year before fundholding did not differ from those of patients of other non-fundholders The shorter waiting times of fundholding patients can be attributed to the participation of their practice in the fundholding scheme