COMPETITION IN THE MIXED ECONOMY OF CARE

The 1990 National Health Service and Community Care Act introduced swe eping changes to health and social welfare services, The reforms to co mmunity care were dominated by the introduction of markets for social care, We argue that the new markets cannot be guaranteed to deliver th e range of services required to meet community care objectives, When t hey began to assume their new responsibilities, few key purchasers had a basic understanding of the functioning and imperfections of markets , Consequently, they were poorly equipped to anticipate or ameliorate the sources of market failure that we identify, Like any other relativ ely ill-informed purchaser, local authorities risk being unable to buy what they want on behalf of their residents and at an appropriate vol ume, cost and quality, We discuss where and how market imperfections a re likely to occur, In this context, we offer an economic framework to help in the shaping and managing of social care markets.