The Labour government has outlined its plans to 'replace' the competitive internal market with a more collaborative system based on partnership. Agreement amongst purchasers and providers is to be based on co-operation rather than competition. Longer term agreements covering periods of 3-5 years are to replace annual contracts within this new environment.
The aim of this paper is to explore the potential economic implications of these policy changes by drawing on the economics of co-operation and the transaction costs approach to longer term contracting. Issues surrounding the role of trust in contractual relationships are explored and the relevance of experience and evidence from non-health care sectors is considered in the context of the NHS.
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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.
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