Purchasing for health gain: the problems and prospects for purchasing for health gain in the 'managed markets' of the NHS and other European health systems

"Purchasing for health gain" a phrase used to describe a strategic role for purchasing bodies which were established in 1990 as part of the UK NHS reforms. Is it an empty phrase, serving to hide the reality of purchaser's main task of controlling expenditure? Will the operational difficulties encountered in the first two years of the reforms continue to stand in the way of a strategic role for public purchasing bodies? Is a strategic role impossible in an "managed market" for health care? This paper considers the concept of health gain and the difficulties encountered by NHS purchasers. It is argued that 1) the term "internal market" is inadequate to describe the different frameworks and combinations of features in different public health care systems with managed competition; 2) purchasing for health gain is more difficult in some types of "managed market" than in other types; 3) the way the UK market is developing may increase, rather than reduce the difficulties; 4) there is no evidence as yet that primary care purchasers cannot purchase for health gain if they are organized and rewarded for doing so; 4) performance assessment of purchasers and purchaser competition would reduce their costs and increase their effectiveness in purchasing to improve the health status of their populations; 5) value choices are integral to purchasing for health gain and new processes and institutions are needed to decide priorities and to introduce explicit rationing. The prospects, some solutions, and the implications for other countries introducing similar changes are discussed.