Managed markets in health care: the UK experiment

The reforms to the United Kingdom national health service initiated in 1989 have unlocked established relationships. Health care providers have come under challenge from an alliance of purchasers and general practitioners. This is resulting in a major rationalisation of acute hospital services in cities such as London. The general practitioner fundholding scheme appears to have produced benefits for patients, although its impact in the longer term remains uncertain. The combination of population based and patient focused models of purchasing within the reforms has created competition between purchasers as well as providers. This has served as a stimulus to purchasers to act as effective agents for patients but it also creates a risk of fragmentation. This paper analyses these developments and draws out their implications for the future of the National Health Service.