Markets, Hierarchies and the Regulation of the National Health Service

Abstract

This paper draws on the markets and hierarchies perspective as originally espoused by Williamson and developed by Ouchi in examining the governance of the National Health Service. It traces an inversion of the processes of governance in the private sector (from markets to hierarchies to culture) to the NHS situation (from clan control to hierarchies to markets). The paper then examines the mechanisms of the new quasi-market in health care with particular reference to GP fundholders and the newly created self-governing hospital trusts. It explores its implications for key actors in the reformed NHS, and concludes that these market reforms will have far-reaching implications for managers, clinicians and, potentially, for the ownership of NHS facilities.