ten - The English NHS as a market: challenges for the Coalition government

Summary

Introduction

‘We will stop the top-down reorganisations of the NHS that have got in the way of patient care’ (HM Government, 2010, p 24). Despite this claim the Coalition government moved swiftly to publish a National Health Service (NHS) White Paper in July 2010 (Secretary of State for Health, 2010), mixing radical structural change with market policy continuity. The radical change involves removal of the customary intermediate tiers in the NHS between the national and local levels, and the replacement of primary care trusts (PCTs) with general practitioner (GP)-led commissioning consortia. Continuity is seen in the government's commitment, echoing its New Labour predecessor, to pursue patient choice and provider competition in the English NHS. The government wants the NHS to develop into a publicly financed universal service delivered through a regulated market replacing the model of a public service delivered through a hierarchy of publicly owned organisations. This chapter assesses the potential consequences of the Coalition's proposals for the NHS – and, given the degree of policy continuity, it begins with a review of New Labour's market changes, as this should provide some indication of the likely effects of the Coalition's proposals.

New Labour's reinvented market in the English NHS

New Labour's NHS Plan (Secretary of State for Health, 2000) led to substantial investment in NHS workforce and capacity. Its later market reforms (Secretary of State for Health, 2002; DH, 2005) – represented diagrammatically as in Figure 10.1 – introduced three key changes designed to build on that investment: first, to create the conditions for a more competitive NHS market by increasing the number and range of providers offering services to NHS patients; second, to reward hospitals for attracting NHS patients; and third, to give NHS patients a choice of where to receive elective treatment.

The two previous White Papers (Secretary of State for Health, 1997, 2000) had explicitly rejected the use of market forces. However, by 2002, the government believed that its concerns about the performance of the English NHS could not be remedied without expanding the repertoire of policy instruments to include greater supplier competition to provide NHS services.