• A Stevens, K Chalkidou, and P Littlejohns.
• University of Birmingham. stevenaj@adf.bham.ac.uk
• Clin Med. 2011 Jun 1; 11 (3): 247250247-50.

AbstractThe healthcare system in the UK, essentially the NHS, is an open economic system subject to the same pressures as any other economic system. The pressures concern limited resources coupled with powerful drivers for increasing spending: invention, demography and inflation. There have only ever been three types of economic system: steady state (everything, as in a feudal system, stays as it was the year before), market capitalism (supply and demand are allowed to find their own equilibrium) and some version of central planning. In healthcare, most advanced countries favour the last of the three. This is for three reasons: distribution (not only are the poor less able to pay for sickness, but sickness exacerbates poverty), information (markets operate poorly when providers can easily outsmart customers) and externalities (it is in the interest of everyone that infectious diseases and the other knock-on consequences of ill health are ameliorated). So in the UK, the state, with a good deal of cross-party consensus, directs most of health service supply. This system has become more complex over the decades since the formation of the NHS in 1948. A notable element of the complexity is the regulation of the introduction of new technologies. A key element of the regulatory system has been the National Institute for Health and Clinical Excellence (NICE), and a key aspect of NICE's decisions has been not just value, but also value for money. This has not been without controversy.

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