THE EFFECTS OF REGULATION AND COMPETITION IN THE NHS INTERNAL MARKET - THE CASE OF GENERAL-PRACTICE FUNDHOLDER PRICES

The 1989 reforms of the UK National Health Service introduced competit ion in supply within a tightly regulated framework. The paper examines whether this competition affects the prices posted by sellers of medi cal services. We argue that despite regulation market forces may have an impact on price. We test this using the posted prices for one of th e two types of buyer, General Practice Fundholders. We find the regula tory rules are not observed, and some evidence of the impact of market forces on price. (C) 1998 Elsevier Science B.V. All rights reserved.