NHS internal market

NHS Internal Market

The NHS Internal Market refers to the structure and organization of the National Health Service (NHS) in the United Kingdom that was introduced in the early 1990s. This system was designed to increase efficiency and choice within the NHS by creating a competitive market for healthcare services. The concept of the internal market fundamentally changed how healthcare was funded and delivered in the UK, aiming to improve service quality by fostering competition among service providers.

History

The NHS Internal Market was introduced by the Conservative government under Prime Minister Margaret Thatcher and further developed by her successor, John Major. The introduction of the internal market was part of a broader movement towards market-driven reforms in public services across the globe during the late 20th century. The White Paper "Working for Patients" (1989) laid the groundwork for these reforms, which were implemented through the National Health Service and Community Care Act 1990.

Structure

The internal market divided the NHS into two main roles: purchasers and providers. NHS trusts, which managed hospitals and other service units, acted as providers by offering healthcare services. District Health Authorities (DHAs) and later, General Practitioner Fundholders (GPFHs), were the purchasers, buying healthcare services on behalf of their local populations.

Purchasers

• District Health Authorities (DHAs): DHAs were responsible for assessing the healthcare needs of their local populations and purchasing services to meet those needs.
• General Practitioner Fundholders (GPFHs): Introduced in 1991, GPFHs were general practitioners who were given budgets to purchase certain healthcare services directly for their patients, such as elective surgery.

Providers

• NHS Trusts: NHS Trusts were established as self-governing entities, responsible for managing hospitals and other healthcare facilities. They competed with each other to provide services to the DHAs and GPFHs.

Impact

The introduction of the NHS Internal Market led to significant changes in the organization and delivery of healthcare services. Proponents argued that it increased efficiency and patient choice, while critics contended that it led to fragmentation and increased administrative costs. The impact of the internal market has been the subject of extensive debate and research.

Reforms and Developments

Subsequent governments have modified the structure of the NHS Internal Market. The Labour Party government, elected in 1997, sought to reduce competition and increase cooperation between providers with the introduction of Integrated Care Systems (ICSs). More recent reforms have focused on increasing the integration of health and social care services and reducing the emphasis on competition.

Current Status

The NHS Internal Market continues to evolve, with ongoing debates about the balance between competition and integration in the delivery of healthcare services. The Health and Social Care Act 2012 introduced further changes, including the establishment of Clinical Commissioning Groups (CCGs) to replace DHAs and GPFHs as the primary purchasers of healthcare services.

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