934:
93:, in five annual waves, as separate bodies, splitting purchasers from providers. Until they became trusts the providing organisations were called directly managed units. The trusts had boards with non-executives, analogous to company boards, and business people were encouraged to serve on the boards. The Act also established
156:
to be lower than in other systems as there were no systems for billing patients, and indeed until the advent of the internal market there was little discussion of the costs of treatments. The number and cost of managers, administrative and clerical staff certainly increased significantly between 1988 and 1992, but
155:
pointed out "There are no agreed definitions of 'administration' and 'management' in health care between (and sometimes even within) countries' health care systems." Nor is it clear which administrative functions are attributable to the market. Administrative costs in the NHS were generally thought
118:
The fundamental concept was that patients would choose between different providers, money would follow the patients and so the best hospitals (there was never any choice of community health services) would prosper. It was never explained what would happen to the less successful institutions. As
123:
explained in his famous 1963 paper, Uncertainty and the
Welfare Economics of Medical Care "A competitive healthcare market is grounded in the expectation that some hospitals or surgeries will go bust". No hospitals did go bust, and only a minority of patients, mainly those needing
128:, were in a position to exercise choice between providers. Furthermore, as Arrow explained, "In practice, the theoretical advantages of choice are outweighed by the fact that people don't do a good job of making these choices in a competitive environment—it's almost impossible."
97:, a scheme whereby individual GP practices could take over the management of hospital services for their patients. Fundholding was abolished by the Labour Government in 1997/8. The Labour Party had campaigned against the internal market, but did not abolish it, though
209:, said in July 2020 that the NHS should aim to permanently scrap activity-based payment tariffs for acute care because block contracts – in which trusts are paid a set level of income – had encouraged "the right behaviours" in Greater Manchester during the
86:. The Tariff includes a weighting system, the market forces factor, which pays providers in high-cost areas – principally in London – enhanced fees. In 2019 it was decided to reduce the London weighting.
216:
In the financial allocations to local systems covering the second half of 2020–21, incentives and penalties depend solely on system-level performance, not performance of individual organisations.
151:
Opponents of the internal market have regularly claimed that the introduction of the internal market increased NHS administration costs from 5% to 14% of total expenditure. As a report from
75:
vigorously across the welfare state. The plan was to decentralize decision making and introduce competition, with the state becoming a purchaser, rather than a provider, of welfare services.
322:
101:
told the Labour Party conference in 1999 that the dreaded Tory internal market was finally banished for good. It introduced primary care groups, which were soon converted into
672:
649:
206:
697:
202:, which started in 2019, further undermines the principles of the internal market, as it is intended to reduce incentives for increases in hospital activity.
176:
effectively ending the purchaser-provider split, although there has not yet been any legislative acknowledgment of the change in policy. In
February 2019,
605:
24:
583:
627:
294:
317:
908:
737:
862:
538:
220:
223:
launched a consultation on a proposed new 'provider selection regime' in 2022. This took effect with the passing of the
917:
244:
132:
83:
958:
181:
40:
278:
172:
are regarded as the official abandonment of the policy of competition in the
English NHS, the establishment of
32:
366:
344:
782:
210:
787:
169:
494:
730:
131:
In lieu of commercial failure, health and social care service regulators were established, first the
112:
830:
224:
60:
516:
140:
68:
28:
835:
792:
173:
160:
concluded that "No-one knows the exact cost or benefit of the NHS internal market in
England".
48:
82:
and the formulation of a national NHS Tariff to complement the funding formula devised by the
802:
227:. NHS commissioners are longer automatically obliged to put clinical services out to tender.
136:
72:
938:
840:
723:
8:
845:
797:
820:
758:
472:
414:
389:
199:
102:
79:
44:
902:
National
Medical Director (and interim Chief Executive of NHS Improvement): Professor
438:
419:
274:
912:
868:
409:
401:
125:
36:
35:
which were given a budget to run hospitals and community health services (but not
673:"Historic shift from market principles as NHSE sets out new system-level funding"
188:
152:
108:
825:
94:
517:"No-one knows the exact cost or benefit of the NHS internal market in England"
405:
43:
was intended to open up the internal market to external competition. The 2019
952:
903:
763:
561:
195:, there was no longer any real purchaser/provider split at a national level.
120:
882:
National
Director, Transformation and Corporate Development: Timothy Ferris
874:
423:
746:
606:"Dalton steps down and Swindells under threat as Stevens takes over NHSI"
192:
177:
812:
98:
78:
The setting up of the market required the establishment of a system of
180:
called for the repeal of the regulations made under section 75 of the
157:
105:—"thereby universalising fundholding while repudiating the concept."
90:
584:"Scrap laws driving privatisation of health service, say NHS bosses"
921:
698:"Government reveals details of plans to scale back NHS competition"
473:"An economist explains why healthcare can't be treated as a market"
111:
was one of the chief proponents of quasi-markets influencing the
650:"NHS should 'never return' to tariff system, says top trust CEO"
51:
across
England by 2021, effectively ending the internal market.
27:, to separate the roles of purchasers and providers within the
715:
31:
in the United
Kingdom. Previously, healthcare was provided by
888:
National
Director, Specialised Commissioning: John Stewart
207:
Tameside and
Glossop Integrated Care NHS Foundation Trust
64:
885:
National Director, Chief Financial Officer: Julian Kelly
318:"Blair's NHS will adopt the best of the old and the new"
439:"Uncertainty and the welfare economics of medical care"
879:
National Director, Strategy and Innovation: Ian Dodge
25:
National Health Service and Community Care Act 1990
316:
295:"London trusts to lose £300m after tariff change"
950:
562:"Are Andrew Lansley's NHS reforms being binned?"
497:. Socialist Health Association. 23 February 2015
268:
539:"Is this the end of the NHS's internal market?"
345:"Hospital trusts bring internal health market"
187:From March 2019, with the effective merger of
731:
738:
724:
700:. Health Service Journal. 22 February 2022
630:. Health Service Journal. 18 November 2019
89:The internal market initially established
470:
413:
297:. Health Service Journal. 23 January 2019
269:Le Grand, Julian; Bartlett, Will (1993).
16:Policy of competition in the English NHS
559:
67:, following the 1983 Griffiths report,
951:
670:
652:. Health Service Journal. 22 July 2020
608:. Health Service Journal. 1 March 2019
719:
436:
387:
184:which require competitive tendering.
471:McCartney, Margaret (10 July 2017).
221:Department of Health and Social Care
71:it began to apply the principles of
390:"Markets, politicians, and the NHS"
13:
388:Klein, Rudolf (27 November 1999).
168:The reforms introduced in 2017 by
14:
970:
671:Norton, Tom (16 September 2020).
560:Triggle, Nick (11 January 2019).
325:from the original on 18 June 2022
133:Commission for Health Improvement
84:Resource Allocation Working Party
933:
932:
437:Arrow, Kenneth (December 1963).
205:Karen James, chief executive of
54:
47:called for the establishment of
745:
690:
664:
642:
620:
598:
576:
553:
531:
509:
495:"Cost of the Market in our NHS"
487:
271:Quasi-markets and Social Policy
182:Health and Social Care Act 2012
41:Health and Social Care Act 2012
628:"Tipping point for the tariff"
464:
430:
381:
359:
337:
309:
287:
262:
237:
1:
783:Clinical commissioning groups
519:. Full Fact. 27 February 2018
369:. Guardian. 28 September 1999
321:. Independent. 30 June 1995.
230:
826:hospital trusts/acute trusts
586:. Guardian. 28 February 2019
541:. Economist. 2 November 2017
446:The American Economic Review
249:Socialist Health Association
211:COVID-19 pandemic in England
135:, which was replaced by the
7:
788:Health and wellbeing boards
33:regional health authorities
10:
975:
367:"Tony Blair's full speech"
930:
895:
873:Chief Operating Officer:
854:
811:
775:
753:
475:. British Medical Journal
406:10.1136/bmj.319.7222.1383
245:"Griffiths Report on NHS"
163:
918:Chief Scientific Officer
798:Local HealthWatch groups
225:Health and Care Act 2022
959:National Health Service
836:community health trusts
394:British Medical Journal
174:integrated care systems
146:
141:Care Quality Commission
63:was slow to reform the
49:integrated care systems
29:National Health Service
23:was established by the
863:Lord Prior of Brampton
793:Integrated care system
677:Health Service Journal
909:Chief Nursing Officer
803:NHS Property Services
137:Healthcare Commission
73:New Public Management
39:) in their area. The
896:Professional leaders
846:mental health trusts
768:Maple Street, London
198:The move away from
103:primary care trusts
61:Thatcher government
21:NHS internal market
821:List of NHS trusts
347:. BBC. 19 May 1998
200:Payment by Results
80:Payment by Results
45:NHS Long Term Plan
946:
945:
867:Chief Executive:
841:foundation trusts
113:Blair governments
966:
936:
935:
869:Amanda Pritchard
831:ambulance trusts
740:
733:
726:
717:
716:
710:
709:
707:
705:
694:
688:
687:
685:
683:
668:
662:
661:
659:
657:
646:
640:
639:
637:
635:
624:
618:
617:
615:
613:
602:
596:
595:
593:
591:
580:
574:
573:
571:
569:
557:
551:
550:
548:
546:
535:
529:
528:
526:
524:
513:
507:
506:
504:
502:
491:
485:
484:
482:
480:
468:
462:
461:
459:
457:
443:
434:
428:
427:
417:
400:(7222): 1383–4.
385:
379:
378:
376:
374:
363:
357:
356:
354:
352:
341:
335:
334:
332:
330:
320:
313:
307:
306:
304:
302:
291:
285:
284:
266:
260:
259:
257:
255:
241:
126:elective surgery
37:general practice
974:
973:
969:
968:
967:
965:
964:
963:
949:
948:
947:
942:
926:
891:
855:Management team
850:
807:
771:
749:
744:
714:
713:
703:
701:
696:
695:
691:
681:
679:
669:
665:
655:
653:
648:
647:
643:
633:
631:
626:
625:
621:
611:
609:
604:
603:
599:
589:
587:
582:
581:
577:
567:
565:
558:
554:
544:
542:
537:
536:
532:
522:
520:
515:
514:
510:
500:
498:
493:
492:
488:
478:
476:
469:
465:
455:
453:
441:
435:
431:
386:
382:
372:
370:
365:
364:
360:
350:
348:
343:
342:
338:
328:
326:
315:
314:
310:
300:
298:
293:
292:
288:
281:
267:
263:
253:
251:
243:
242:
238:
233:
189:NHS Improvement
166:
153:York University
149:
109:Julian Le Grand
57:
17:
12:
11:
5:
972:
962:
961:
944:
943:
931:
928:
927:
925:
924:
915:
906:
899:
897:
893:
892:
890:
889:
886:
883:
880:
877:
871:
865:
858:
856:
852:
851:
849:
848:
843:
838:
833:
828:
823:
817:
815:
809:
808:
806:
805:
800:
795:
790:
785:
779:
777:
773:
772:
770:
769:
766:
761:
757:Headquarters:
754:
751:
750:
743:
742:
735:
728:
720:
712:
711:
689:
663:
641:
619:
597:
575:
552:
530:
508:
486:
463:
429:
380:
358:
336:
308:
286:
279:
261:
235:
234:
232:
229:
165:
162:
148:
145:
95:GP Fundholding
56:
53:
15:
9:
6:
4:
3:
2:
971:
960:
957:
956:
954:
941:
940:
929:
923:
919:
916:
914:
910:
907:
905:
904:Stephen Powis
901:
900:
898:
894:
887:
884:
881:
878:
876:
872:
870:
866:
864:
860:
859:
857:
853:
847:
844:
842:
839:
837:
834:
832:
829:
827:
824:
822:
819:
818:
816:
814:
810:
804:
801:
799:
796:
794:
791:
789:
786:
784:
781:
780:
778:
776:Commissioning
774:
767:
765:
764:Skipton House
762:
760:
756:
755:
752:
748:
741:
736:
734:
729:
727:
722:
721:
718:
699:
693:
678:
674:
667:
651:
645:
629:
623:
607:
601:
585:
579:
563:
556:
540:
534:
518:
512:
496:
490:
474:
467:
451:
447:
440:
433:
425:
421:
416:
411:
407:
403:
399:
395:
391:
384:
368:
362:
346:
340:
324:
319:
312:
296:
290:
282:
276:
273:. MacMillan.
272:
265:
250:
246:
240:
236:
228:
226:
222:
217:
214:
212:
208:
203:
201:
196:
194:
190:
185:
183:
179:
175:
171:
170:Simon Stevens
161:
159:
154:
144:
142:
139:and then the
138:
134:
129:
127:
122:
121:Kenneth Arrow
116:
114:
110:
106:
104:
100:
96:
92:
87:
85:
81:
76:
74:
70:
66:
62:
59:Although the
55:Establishment
52:
50:
46:
42:
38:
34:
30:
26:
22:
937:
875:David Sloman
759:Quarry House
702:. Retrieved
692:
680:. Retrieved
676:
666:
654:. Retrieved
644:
632:. Retrieved
622:
610:. Retrieved
600:
588:. Retrieved
578:
566:. Retrieved
555:
543:. Retrieved
533:
521:. Retrieved
511:
499:. Retrieved
489:
477:. Retrieved
466:
454:. Retrieved
449:
445:
432:
397:
393:
383:
371:. Retrieved
361:
349:. Retrieved
339:
327:. Retrieved
311:
299:. Retrieved
289:
270:
264:
252:. Retrieved
248:
239:
218:
215:
204:
197:
186:
167:
150:
130:
117:
107:
88:
77:
58:
20:
18:
747:NHS England
656:7 September
590:28 February
545:28 February
523:28 February
501:28 February
479:28 February
456:28 February
373:28 February
351:28 February
329:28 February
193:NHS England
178:NHS England
861:Chairman:
813:NHS trusts
682:26 October
568:11 January
280:0333565193
231:References
99:Tony Blair
91:NHS trusts
634:8 January
158:Full Fact
69:from 1988
953:Category
939:Category
922:Sue Hill
913:Ruth May
704:21 April
424:10574834
323:Archived
612:2 March
415:1117121
301:2 March
254:2 March
422:
412:
277:
164:Reform
564:. BBC
442:(PDF)
706:2022
684:2020
658:2020
636:2020
614:2019
592:2019
570:2019
547:2019
525:2019
503:2019
481:2019
458:2019
420:PMID
375:2019
353:2019
331:2019
303:2019
275:ISBN
256:2019
219:The
191:and
147:Cost
19:The
452:(5)
410:PMC
402:doi
398:319
65:NHS
955::
920::
911::
675:.
450:53
448:.
444:.
418:.
408:.
396:.
392:.
247:.
213:.
143:.
115:.
739:e
732:t
725:v
708:.
686:.
660:.
638:.
616:.
594:.
572:.
549:.
527:.
505:.
483:.
460:.
426:.
404::
377:.
355:.
333:.
305:.
283:.
258:.
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.