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BMC Health Services Research
Published in: BMC Health Services Research 1/2013

Open Access 01-05-2013 | Research

An economic analysis of the limits of market based reforms in the English NHS

Author: Pauline Allen

Published in: BMC Health Services Research | Special Issue 1/2013

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Abstract

Background

Over the past three decades, a limited range of market like mechanisms have been introduced into the hierarchically structured English National Health Service (‘NHS’), which is a nationally tax funded, budget limited healthcare system, with access to care for all, producing structures known as a quasi market. Recently, the Health and Social Care Act 2012 (‘HSCA’) has been enacted, introducing further market elements. The paper examines the theory and effects of these market mechanisms.

Methods

Using neo-classical economics as a primary theoretical framework, as well as new institutional economics and socio-legal theory, the paper first examines the fundamental elements of markets, comparing these with the operation of authority and resource allocation employed in hierarchical structures. Second, the paper examines the application of market concepts to the delivery of healthcare, drawing out the problems which economic and socio-legal theories predict are likely to be encountered. Third, the paper discusses the research evidence concerning the operation of the quasi market in the English NHS. This evidence is provided by research conducted in the UK which uses economic and socio-legal logic to investigate the operation of the economic aspects of the NHS quasi market. Fourth, the paper provides an analysis of the salient elements of the quasi market regime amended by the HSCA 2012.

Results

It is not possible to construct a market conforming to classical economic principles in respect of healthcare. Moreover, it is not desirable to do so, as goals which markets cannot deliver (such as fairness of access) are crucial in England. Most of the evidence shows that the quasi market mechanisms used in the English NHS do not appear to be effective either. This finding should be seen in the light of the fact that the operation of these mechanisms has been significantly affected by the national political (i.e. continuingly hierarchical) and budgetary context in which they are operating.

Conclusion

The organisational structures of a hierarchy are more appropriate for the delivery of healthcare in the English NHS.
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Metadata
Title
An economic analysis of the limits of market based reforms in the English NHS
Author
Pauline Allen
Publication date
01-05-2013
Publisher
BioMed Central
Published in
BMC Health Services Research / Issue Special Issue 1/2013
Electronic ISSN: 1472-6963
DOI
https://doi.org/10.1186/1472-6963-13-S1-S1

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