At the heart of the gargantuan Health and Social Care Bill published by the Coalition government in January are provisions to establish a comprehensive system for the economic regulation of health and adult social care services. Part 3 of the bill is divided into eight chapters (far more than any other part of the bill), which encompass the role of Monitor as the economic regulator, plans for licensing of providers and setting prices, clauses on competition including the role of the Competition Commission and the Office of Fair Trading, and arrangements for insolvency and for a system of special administration to ensure continuity of designated services when providers fail. These provisions amount to the most ambitious attempt yet seen to apply a system of market regulation to the NHS⇓.

Publication of the bill puts in perspective debates about the government’s intentions that have dominated discussion since last May’s election. Although many organisations have focused their attention on plans to give general practices a major role in commissioning health services and to require all NHS providers to become foundation trusts, these changes are of secondary importance compared with the …