Contracts and the Quasi-market in Community Health Services

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Abstract
In the NHS quasi-market, contracts are the crucial mechanism through which purchasers influence providers of health care. Most attention has been given to the commissioning and contracting process in acute hospital services. However, there is another important but neglected sector of health care – community health services (CHS) – in which the specification and implementation of contracts is particularly difficult. In this article, three dimensions of contracting are analysed, illustrated by qualitative evidence from case studies, concerning: the measurement of activity; the estimation of costs and prices; and the monitoring of outcomes and quality. This article argues that community health services are intrinsically problematic within the quasi-market, and suggests that the nature of the services and the system of delivery militate against provider competition. It is argued that CHS have more in common with ‘clans’ and ‘networks’ rather than markets and hierarchies, and that this requires collaborative rather than adversarial relationships between purchasers and providers.