With the increasing emphasis on providing efficient and equitable services from primary care and against a background of increasing demands on limited resources, economic theory seeks to facilitate both the direction of primary care and the decisions that are made within it. This paper argues that the impact of health economics, particularly at the microeconomic level, has been limited. This is because health economists have failed to recognise the importance of context, and also reflects their attempts to force reality into a disciplinary matrix which is not always accessible and acceptable to end users. Argument is made for a closer relationship between health economists and those who commission and deliver primary care. It is also desirable to develop pragmatic decision-making frameworks which draw upon economic concepts and principles but reflect the realities of the environment in which they are applied.