The purchaser-provider split is an artificial distinction. It does not reflect real-life medicine where the GP (labelled as “purchaser”) provides far more day-to-day medical care than the hospital (labelled as “the provider”). Less than 10% of GP referrals are referred to hospital and most of those will in due course be referred back to the practice team to be looked after. Both GPs and hospitals are essential providers of healthcare. Labelling one group as purchaser and the other as provider is false.
The split has created problems. Hospitals now have perverse incentives to perform excessive and unnecessary investigations and procedures to increase their income at the expense of the primary care sector. Hospitals have no incentive to work with GPs to reduce referrals because that would reduce their income, and Foundation Trusts hospitals are legally bound to make an operating http://imagineear.com/pharmacy/ profit.
Furthermore in a competitive market, “any willing provider” can pick off the low-lying fruit of profitable hospital work and offer this to the GP purchaser who under pressure to save money can undermine the solvency of their local District Hospital as it struggles to remain open to all-comers 24 hours a day 365 days a year.
The purchaser-provider split is bad for hospitals, bad for the GP and bad for the patient, who so often is wedged between purchaser and provider each with different financial incentives not necessarily linked to the patients’ best interest.
The NHS cannot be run on conventional market grounds. The principles on which it was founded were of collaboration between primary and secondary care, public health and social care and these are as relevant today as they were in 1947.