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© 1998 Faculty of Public Health Medicine of the Royal Colleges of Physicians of the United Kingdom

research-article

The contracting round: achieving health gain or financial balance?


Mark McCarthy, Professor of Public Health

Department of Public Health, University College London 1–19 Torrington Place, London WC1E 6EA

In the 1991 National Health Service reforms, health authorities became responsible for the health of their resident population, and they contract for health services from NHS providers - trusts and primary care services. A case study in Camden and Islington, an inner London health district, during 1996–1997 shows that contracting was directed more towards achieving financial balance than health objectives. Reasons include the inflationary effect of competition within an internal market, the power of administrators in decision-making within the health authority, and lack of adequate financial accounting in the NHS to relate costs to health outcomes. The introduction of programme budgets for districts would provide more cost-effective use of the nation's resources.

Keywords: health planning, programme budgets, contracting


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