Provider Power: An Important Lesson from the US Health Care Market

In the development of the recent NHS reforms, little attention appears to have been paid to the American experience with health care markets. The US experience suggests that true competition is almost impossible to achieve in health care, and that providers rather than purchasers rapidly come to dominate the market. The end result of separating purchasers from providers is to inflate rather than contain health care spending. These conclusions have important implications for the future of the NHS internal market. In addition they reveal a dilemma for consultants in hospital (provider) trusts: is their first duty to the needs of the community or to the economic survival of their institution?