• J Public Health Policy. 1995 Jan 1;16(4):452-91.

AbstractThe National Health Service provides (and throughout its lifetime of nearly 47 years has provided) comprehensive health care of the highest professional quality at both primary and specialist levels and at very low cost whether expressed in terms of GDP or cash when compared with other industrialised countries. Until the NHS market was introduced, administrative overheads were also strikingly low, between 5% and 6% compared with at least 22% in the US. The legislation imposing the NHS market represents a fundamental reorganisation and fragmentation of the NHS into competing services with a new bureaucracy of business and financial managements topslicing funds for patient care. It is the latest of a number of reorganisations dating from the first plans published by the Conservative administration in May 1971. Our calculations show that the newly imposed market processes have doubled the administrative running costs of the NHS. This represents an additional administrative expenditure of at least I.7 billion pounds a year at current prices. This sum therefore represents a diversion of 1.7 billion pounds a year from clinical services and goes some way to explaining the criticism from clinicians and the delays and inconvenience experienced by the public despite government claims that more money is being spent on the NHS. We describe the clandestine origins of the NHS market and note good and bad effects of its introduction. Because of their serious implications, we describe eleven damaging side-effects. These include the conflict between strategic planning of care and the operation of market forces. We identify other side-effects that are considered to be inseparable from market operation and sufficiently serious to call for urgent redress. We suggest how good effects associated with the introduction of the NHS market (such as giving GPs more say in the development of hospital services) could be enhanced without the side-effects inherent in the NHS market. We urge that ways of addressing these issues should, whenever possible, be piloted before they are introduced nationally. (In the case of fundholding in general practice, this damaging and controversial change should be halted and ways found to replace it with consortium commissioning, for which there is relevant experience.) We discuss the need to halt any other fundamental and potentially destabilising reorganisation before it has been tried out in properly evaluated pilot schemes. This should not, however, be allowed to become a recipe for stagnation as the health policy of the next government.

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