Introduction

It was in 1962 that Enoch Powell, then minister of health, published the Hospital Plan for England and Wales.1 The plan served as a framework for the development of hospital services in the decades that followed, leading to the building of many new hospitals and the refurbishment of others. At the heart of this framework was the district general hospital, designed to provide a comprehensive range of inpatient and outpatient services to populations of 100 000 to 150 000. District general hospitals have formed the backbone of NHS hospital care ever since.

Today, many of these hospitals face an uncertain future. The uncertainty has arisen as a result of advances in healthcare technology enabling more specialist services to be provided outside the hospital, changes in the workforce (particularly a reduction in the hours worked by doctors in training), evidence that some services are better concentrated in fewer centres able to achieve superior outcomes, and government policies designed to increase patient choice and stimulate greater efficiency in the use of resources. Here, I focus on the effect of government policies.

Market reforms

The over-riding objective of health policy since the election of the Labour government in 1997 has been reducing waiting lists and waiting times for treatment. In pursuit of this objective, the government has procured extra treatment capacity and introduced reforms to increase patient choice. These reforms include a new approach to funding hospitals, payment by results, under which money will follow patients to the hospitals of their choice. Patient choice and payment by results create the conditions in which hospitals will compete with each …