The National Health Service is funded through three means; general taxation, national insurance contributions, and private fees for a small number of services, including prescriptions and dentistry.  The level of funding to the NHS is set annually by the central government.  General taxation accounts for around 80% of that budget (1).  In 2018/19 the budget for the NHS was £114b (2).  Primary care receives around 7.1% of the total NHS budget (3).

Primary care in the UK is mostly provided in the NHS with a comparatively small private sector.  Providers of NHS primary medical services are self-employed contractors and do so under licence from the UK Government – a monopsony purchaser.

These contractors provide services under three different types of contracts: the General Medical Services Contract (GMS), the Personal Medical Services Contract (PMS), or the Alternative Provider of Medical Services (APMS) Contract.  GMS and PMS contracts are granted in perpetuity to contractors who must be General Practitioners or in the case of the latter, employees within the NHS.  APMS contracts are time-limited and can be granted to anyone with the means of fulfilling the requirements of the contract (4).  In each of these contracts, fiscal resource follows patient registrations and achievement of patient outcome.

The consequence of adopting a range of contracting mechanisms and broad qualifying characteristics for potential contract holders is to reduce barriers for access to the primary medical services market.  This should result in the increased availability of independent providers to the market from which commissioners can exercise choice in the purchase of care. 

Whilst the resultant increase in contestability confers an element of market self-regulation, this particular market remains challenging to enter with a high degree of education and experience of industry being barriers to access.  As such, regulation remains necessary of dominant providers where low measurability of their outcomes exists (5).

To meet this end, clinicians must remain registered with their appropriate Professional Regulatory Body and contractors must register their services with the Care Quality Commission (CQC).  The use of medicines and medical devices in the NHS is governed by the Medicines Healthcare Products Regulation Agency (MHRA), which is a UK Government agency (6).  Guidance of the use of medicines and technology in the NHS is created by the National Institute for Health and Care Excellence (NICE) who is also sponsored by the UK Department of Health and Social Care (7).

This system describes a mixed economy of market the voice model, where multiple providers exist in competition and the central command and control model, where regulation is needed to govern and steer (8).

  1. “How health care is funded | The King’s Fund.” 23 Mar. 2017, https://www.kingsfund.org.uk/publications/how-health-care-is-funded.
  2. “NHS Expenditure – House of Commons Library.” https://commonslibrary.parliament.uk/research-briefings/sn00724/.
  3. “Pressures in general practice – BMA – Home.” https://www.bma.org.uk/advice-and-support/nhs-delivery-and-workforce/pressures/pressures-in-general-practice.
  4. “GP funding and contracts explained | The King’s Fund.” 11 Jun. 2020, https://www.kingsfund.org.uk/publications/gp-funding-and-contracts-explained.
  5. “Make or buy’’ decisions in the production of health care ….” https://www.who.int/bulletin/archives/78(6)779.pdf.
  6. “About us – Medicines and Healthcare products Regulatory ….” https://www.gov.uk/government/organisations/medicines-and-healthcare-products-regulatory-agency/about.
  7. “National Institute for Health and Care Excellence – GOV.UK.” https://www.gov.uk/government/organisations/national-institute-for-clinical-excellence.
  8. “Choice and competition in publicly funded health care ….” https://www.cambridge.org/core/journals/health-economics-policy-and-law/article/choice-and-competition-in-publicly-funded-health-care/F0A2E64F410C71BD5942D43FA5F27DD6.

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