The Times, Dec. 6th 2004, p.6
The National Health Service will cost the country £20 billion more than it should be because of the Government's failure to implement cost-effective reforms, a report has concluded. If reform had been put ahead of increased funding, the same NHS services could have been delivered for £90 billion a year instead of the £110 billion they are likely to actually cost by 2010-11. The report, published by the think-tank Reform, concluded that the NHS is improving and delivering better services - but that the improvements have been bought at a huge and unnecessary cost.
J. Appleby and R. Jobanputra
New Economy, vol.11, 2004, p.195-200
Article looks in detail at payment-by-results, the quiet revolution taking place in the NHS which goes much further than the internal market introduced in the early 1990s. Authors point out that little is known about the motivations of health care providers, and therefore how they might respond to the new funding system. The potential for unintended consequences is large, and the system is likely to require frequent adjustment. In principle, the system could be used to secure extra activity or to exert a downward pressure on costs.