Introduction
1.1 Introduction to the research Problem
Healthcare worldwide faces unprecedented challenges in meeting growing demands in presence of constrained resources (Jones 2010). In the United Kingdom healthcare services are delivered by an organization known as the National Health Service (NHS). The NHS is exposed to similar challenges, with broadly static health budgets for the last 5 years. It has been estimated that the NHS in England needs to make annual efficiencies of around 4% per year in order to be able to continue providing the current level of healthcare services and cope with the annual increase in demand (Roberts 2012).

The structures and processes for delivery of health care in England have been evolving continuously in …show more content…
They introduce the rewards associated with competitive markets to the equity benefits of a traditional system of public financing(Le Grand 1991). The main aim of creating market like structures for the delivery of healthcare services is to promote efficiency and quality by introducing customer choice, whilst maintaining equity of access to the services to which they remain entitled to(Le Grand 1991). Creation and fostering of quazi-markets differ from other forms of microeconomic reform (Le Grand 2007). In fact rather than de-regulation which is associated with most other forms of economic reform (Nicoletti 2003), the NHS experience indicates that quazi-markets in healthcare require strong oversight and robust regulation, failure of which could lead to adverse patient outcomes and experience (Francis 2013). Opinions regarding the efficacy of quazi-markets as an instrument of public policy remains divided mainly along ideological grounds. The experience from the NHS is that these reforms once established, are associated with improved patient choice, provider competition and expanded capacity and do not appear to harm equity of access (Cooper 2009). However it is not possible to attribute increased efficiency in delivery of healthcare in the last 20 years to this structural reform in the NHS as there have been many other developments in delivery of healthcare in that time(Cooper …show more content…
In the context of healthcare reform the system through which healthcare is paid for (funding) plays a similar role. Indeed funding is a key policy tool available to influence the behavior of protagonists of the healthcare system(Marshall 2014). The recently enacted Health and Social care act of 2012 represents the most recent package of health care reform in England (Responsibility for delivery of healthcare is devolved to the parliaments and regional assemblies of Scotland, Wales and Northern Ireland). In addition to structural changes which will be described in the next chapter, HSCA 2012 aims to expand the quazi-market which already exists in NHS England to the private sector and in return allow NHSFTs to utilize a significant proportion of their capacity for delivering private healthcare services. HSCA 2012 also reforms the payment system for delivering services. It was hoped that these changes create a more equitable basis for relationship between primary care institutions and NHSFTs. A year after their introduction there is evidence to suggest that NHS foundation trusts in England have been financially adversely affected (Lacobucci 2014). This may in part be related to inertia in adapting to the new operational environment, including the mode of reimbursement for their services. The outgoing reimbursement models which were calledblock contracts required NHSFTs to