Government needs to clarify role of NHS market, urges independent working group

If the government's current health reforms are to work, it must state unequivocally that it wants to create a health care market involving a range of different providers and that it believes this model represents the long-term future for the health service in England.

That was the main recommendation in a report issued today from an independent working group made up of health service leaders from the NHS, the voluntary and the independent sectors. Commissioned by The King's Fund, the group examine the changing landscape of NHS funded services and look at what needs to be done to make the new market work effectively for patients.

Designing the 'new' NHS: Ideas to make a supplier market in health care work calls for greater clarity over the long-term objectives of the new market and says that the first challenge must be for the government to refrain from setting an upper limit to independent sector provision in the market.

The amount of care coming from the NHS, private and voluntary sectors should emerge as the market develops rather than being artificially defined, according to the report.

The report outlines a series of ideas for making the new market work. They include:

  • the need for less central control from the government – a market with a range of providers should operate as part of a system which is independent of day-to-day ministerial control.
  • providers should operate on a level playing field – there should be no unfair advantage or disadvantage between providers from the NHS, independent and voluntary sectors
  • regulation should be explored in more detail – including the possibility of introducing a separate competition regulator
  • commissioning should be strengthened – deciding what the NHS should buy and how commissioners work together should be a top priority in the new market
  • the infrastructure of the health service should be enhanced – prioritising the success of the IT programme 'Connecting for Health' will play a big part in this.

Working group chair, Greg Parston*, said:

'A supply-side market is being created in health care out of a powerful mix of tariffs, incentives and new providers. This offers tremendous opportunities but it also carries great risks. A more diverse supply of health care has the potential to enlarge patient choice and drive competitive improvements in services. However, a poorly operating market could damage widely acknowledged NHS strengths and ultimately undermine patient care.

'With the greater clarity of direction, the improvements to central structure and regulation, the strengthening of commissioning and the better infrastructure that this report recommends, it will be possible to create a future in which the health care market produces a service that is more innovative and responsive to patients' needs and wishes while also operating more efficiently and delivering better value for money.'

The King's Fund chief executive Niall Dickson said:

'The move towards the introduction of a supplier market has been achieved with surprisingly little serious discussion and there is still some uncertainty about where it is all heading. We very much hope this stimulating report will generate debate over what needs to be done to ensure high quality care within a market system.

'Already independent sector providers are being awarded sizeable contracts to provide services and the government says it is also committed to build on the significant contribution the voluntary sector makes to the NHS in areas such as mental health and end-of-life care.

'However, all these changes and the new incentives in the system are but means to an end. The current changes will need to be judged on what they achieve for patients and the public who fund the NHS.'

Read the report: Designing the 'new' NHS: Ideas to make a supplier market in health care work

Notes to editors: 

*At the time of chairing the group Greg Parston was Chairman of the Office for Public Management and Director of the Priory Group. He is now Director of the Institute for Public Service Value at Accenture.

  1. For further information or interviews, please contact the King’s Fund media and public relations office on 020 7307 2632 or 020 7307 2581. An ISDN line is available for interviews on 020 7637 0185.
  2. The report, Designing the ‘new’ NHS: Ideas to make a supplier market in health care work, edited by Nicholas Timmins, is available for download free from Monday 5 June. For advance copies of the report please contact the King’s Fund media and public relations office.
  3. The working group comprised the following people:
    • Victor Adebowale, Chief Executive, Turning Point
    • Zenna Atkins, Chair, Portsmouth City Teaching PCT
    • Robert Creighton, Chief Executive, Ealing PCT
    • Mark Goldman, Chief Executive, Heart of England Foundation Trust
    • Neil Goodwin, Chief Executive, Greater Manchester SHA
    • Tom Hughes-Hallett, Chief Executive, Marie Curie Cancer Care
    • Ed Mayo, Chief Executive, National Consumer Council
    • Keith Palmer, Senior Associate, King’s Fund
    • Chai Patel, Chief Executive, Priory Healthcare
    • Carolyn Regan, Chief Executive, NE London SHA
    • Rebecca Rosen, Senior Fellow, King’s Fund
    • Bryan Sanderson CBE, Chairman, BUPA
    • Michael Shaw, Chief Executive, John Grooms
    • Ian Smith, Chief Executive, General HealthCare Group
  4. The King’s Fund is an independent charitable foundation working for better health, especially in London. We carry out research, policy analysis and development activities, working on our own, in partnerships, and through funding. We are a major resource to people working in health and social care, offering leadership development programmes; seminars and workshops; publications; information and library services; and conference and meeting facilities.