Financing health care in scotland: the impact of the purchaser provider model

The health care system in Scotland, as in the rest of the United Kingdom, isin the process of implementing the reforms introduced in 1991 following a government review of the National Health Service (BHS). The main thrust of these reforms, the third major reorganisation since 1948, was the separation between the roles of purchaser and provider and the creation of an internal market. The context for these changes is provided by a description of the main features of the NHS and a brief history of the policies pursued before the implementation of the reforms, with respect not only to costs, but also to quality and access. It is argued that many of the concerns currently facing policy makers have been recurrent themes during the life of the NHS and that there has been a failure to properly analyse issues and to identify relevant solutions. In analysing the actual and potential success of the current reforms, emphasis is placed upon the issues of information and incentives. These issues are interrelated, in the sense that even the correct incentives cannot function if the actors in the system do not have the appropriate information upon which to base their decision making. The article concludes by looking at how the system may evolve in the future.