Contracting in the NHS quasi-market

Area of Science:

• Health Services Management
• Health Economics
• Public Administration

Background:

• The National Health Service (NHS) implemented an internal market, introducing contracting between purchasers and providers.
• Contracting evolved significantly during the initial four years of this market structure.
• A national survey of English District Health Authorities in 1994 provides the data for this analysis.

Purpose of the Study:

• To examine the development and current state of contracting within the NHS.
• To analyze the economics of contracting based on survey data.
• To understand the prevalence and characteristics of different contract types.

Main Methods:

• National survey of English District Health Authorities conducted in late 1994.
• Analysis of survey data focusing on contract prevalence, pricing, and management.
• Examination of specific contracting issues like activity measurement, referrals, and clinician involvement.

Main Results:

• Sophisticated block contracts emerged as the most common type.
• Details on contract mechanisms for activity measurement, pricing, and variance management are presented.
• The study explores clinician involvement, extra-contractual referrals, and contracting with the independent sector.

Conclusions:

• The paper provides insights into the current status and future trajectory of NHS contracting.
• Findings are discussed in the context of health economics and the NHS internal market.
• The research highlights the evolving nature of healthcare procurement and provider relationships.