Regulation

The debate about price competition in the NHS is a very good example of a more general point: the impact of competition in health care will depend on the ‘rules of the game’.

The Health and Social Care Bill sets out some of the parameters for competition but much of this is of necessity very broad and open to interpretation.  This job of interpretation falls largely to the new economic regulator – Monitor.  Its approach (or regulatory stance in the jargon) will have a profound effect on the way competition evolves over the coming years.

The market mechanism session of...