The GP fundholding scheme was introduced as part of the Conservative government's 1991 NHS reforms and abolished by the Labour government in 1998. There was no systematic evaluation of the effects of the GP fundholding scheme. Despite this, many politicians, policy commentators and health care professionals maintained campaigns to discredit and to abolish GP fundholding. This paper argues that a form of folk psychology rather than any evidence drove views about the scheme and subsequent policy changes. The result of this trend in health care policy-making is that there are no means of identifying the strengths and weaknesses of the policy initiatives that are introduced, or determining what elements of existing policies should be incorporated into future schemes.