The internal market: an acceptable means to a desirable end

This Discussion Paper argues that the government has been right both in its rejection of market solutions to health insurance and in its injection of competition into provider markets. The particular advantages of the latter are that the collective expression of demand is maintained, with impetus being given to the better identification of health care needs and the most effective ways of meeting them. The ill effects of provider competition in the United States are outlined and reasons for not expecting them to be replicated in Britain explained. Emphasis is laid on the powerful moral case for efficiency in the provision of health care, and clear definitions of this much-abused term are offered. The reforms of the White Paper are likely to strengthen the hands of ministers in securing a larger share of the public expenditure cake for health care. The changes pose no threat to the traditional pursuit of equity in the NHS and are appropriate means of attaining what Professor Culyer calls “communism in health” (to each according to her need; from each according to financial ability). Difficulties are anticipated both from the speed of implementation and, in particular, from the fragmentation of the demand side between health authorities, general practitioners, and local authorities. The need for further change and rationalisation is anticipated here.