Is health care a commodity: how will purchasing improve the National Health Service?

Abstract

Through the reforms to the National Health Service in 1990 an internal market for public health care provision in the United Kingdom was introduced. As part of this new system of care, responsibility for purchasing of health care was separated from that for its provision. The new purchasing function, undertaken by district health authorities and fundholding general practices, has created the opportunity for improvements in health and higher standards of care to be achieved through new and explicit mechanisms. However, the purchasing function has not yet realized its full potential to achieve beneficial change, partly because traditional behaviours have not yet adapted to the new system of care and partly because specific aspects of the internal market are creating barriers and perverse incentives. This paper discusses these issues and identifies the important barriers which have still to be overcome if purchasing is to be the driving force for change in the new National Health Service.