Managed competition, governmentality and institutional response in the United Kingdom

This article traces the use of managed competition policy to transform the NHS from an administered public service to a set of interlocking markets and contracts. It reviews the overlooked origins of managed competition in the new managerialism and explains the relationship between managed competition and the cost crisis of the NHS by extending Foucault's concept of governmentality to revise the concept of the state. The paper then describes how the government structured health care markets, using managed competition as an instrument of governmentality. It summarises institutional responses by health authorities, hospital trusts, and GP fundholders. The terms "master institution", "dictated competition" and "coercive partnering" are introduced as new concepts for economic sociology and as strategies of governmentality. Implementation, however, led to resistance, opposition and eventual abandonment of managed competition as too disruptive and costly. Yet, this analysis contends, managed competition has left an enduring legacy of accountability to purchasers in economic terms such as efficiency, transaction costs, and cost effectiveness. The policies of the new government are based on coercive partnering and doctor-based "commissioning". This and the Internet imply revolutionary changes for the health professions and the delivery of health care services through networks of moebius-strip organisations interacting in flexible sequences and subject to communitarian pressures.