Do we need an Of health?

Other services have regulatory bodies to promote competition

The internal market was introduced into the NHS to improve patient care by freeing relationships between purchasers and providers. As markets in gas, water, and telephone services have been liberalised, regulatory bodies have been set up to promote competition and limit the behaviour of monopoly suppliers. Does the internal market need an Ofhealth, along the line of Ofgas (the Office of Gas Supply), Ofwat, and Oftel?

To get the benefits of a market there must be scope for comparison and choice between providers and for comparison between purchasers. But several features of the current internal market limit choice and comparison. For example, hospitals are likely to be monopoly suppliers of some of their services. Information on the quality of services may be poor. To enable suppliers to make decisions on investment they need longer term contracts, but these bring the danger of exploitation by one or other party to the contract.

Under current arrangements, purchasers do not directly compete with each other, which is not necessarily a bad thing—competition for patients among purchasers can be accompanied by selection of patients. But if purchasers don't have to worry about losing patients if the services they purchase for them are poor then limited incentive exists for purchasers to be very responsive to the populations on whose behalf they …