In this paper we address these questions using detailed clinical data from 86,100 patients in 174 English general practices. We construct eight morbidity measures which we use in linear ordinary least squares (OLS) models and in exponential (log link, Poisson) generalised linear models (GLM). We compare the goodness of fit of these models with a basic model containing only patient age,gender, and deprivation. We calculate capitation payments based on different morbidity schemes and compare capitation payments with costs for selected types of patient. We also compare the results of a simple test of horizontal inequity using the different morbidity schemes.