'If the theme of integrated care is to become more than just a catchy slogan, the performance management agenda becomes critical. And it has to be about more than sending in high-profile hit-squads. Their arrival is a sign of failure, not of sound management practice'

If there is to be a new management fad in 1998 it seems it will revolve around chaos theory and finding patterns in complex, and seemingly irrational, systems. Although there is nothing especially new about chaos theory - its principles were alive in the 1960s and 1970s under the rubric of terms like 'organised social complexity' and the 'loss of the stable state' - its re-emergence in the late 1990s, coinciding with the latest wave of NHS reform, is timely.

If it is an exemplar of little else, the English NHS white paper, The New NHS, is a masterly exercise in giving managers ample opportunity to demonstrate their skills in handling and applying chaos theory in the transformation of the service. It appears that the Scottish white paper will offer less scope for the display of such competencies since the changes it outlines are less complex in structural terms and offer fewer opportunities for mischief among primary care practitioners, whose management will become a major preoccupation in England.

The New NHS poses more than its fair share of policy conundrums, although skilful drafting conceals most of them. At the heart of the prescription for reform is the notion of integrated care. It is presented as offering a third way, between hierarchies on the one hand and markets on the other, with their propensity for division and fragmentation. But is a third way, in which everyone pulls together instead of pulling apart, tenable? It looks persuasive and convincing on paper, and is certainly in keeping with prime minister Tony Blair's overall philosophy, which is predicated on the notion of there being a third way in virtually every sphere of public policy.

Labour's ideology is to appear non-ideological and to present policy as an essentially technocratic exercise. The notion of the hybrid organisational form is therefore seductive because, while it is consistent with 'New' Labour's theme of modernisation, it also provides an important link with 'Old' Labour's mythology, of which the NHS is perhaps the most sacred and powerful element.

But what does a third way actually mean? Most hybrids fail because they are neither fish nor fowl. How do ministers see the third way operating and how will they seek to monitor its performance? If the past is anything to go by, such enlightenment is unlikely to be forthcoming and it will be left to managers to find a way through the thicket of contradictory signals and pressures.

Much is made in the white paper of the virtues of partnerships and the high- trust relationships which lie at the heart of these. While economists scoff at the namby-pamby nature of such soft levers for change and urge the need for real incentives, one should not pay too much attention to their siren calls. There are few, if any, examples anywhere in health- care of market-style incentives being successful across whole systems. But if the theme of integrated care is to become more than just a catchy slogan, the performance management agenda becomes critical. And it has to be about more than sending in high-profile hit-squads. Their arrival is a sign of failure, not of sound management practice.

There are strong echoes in The New NHS of the policy statements which surrounded the 1974 NHS reorganisation. For all the soothing assurances that the government does not wish to see a return to a top-down command and control system, this is precisely what much of the white paper implies. There are to be national service frameworks, national reference prices, national quality standards, nationally disseminated guidance on clinical protocols and guidelines.

The government is intent, above all else, on putting the 'national' back into the NHS. While it is a perfectly legitimate and laudable policy objective in order to remove the worst excesses of 'prescription by postcode' and much else, it has not been a particularly effective strategy in the past. Why should things be different this time? Moreover, the directive approach seems slightly at odds with other components of the reform package and with government policy in other areas, notably devolution, where the government is intent upon devolving powers rather than holding on to, or re-acquiring, them.

Mention is made in the The New NHS of the need to engage with local communities in the processes of priority-setting and reshaping of services. But if this is to be effective, it could mean less uniformity and more diversity and pluralism. This, is turn, would risk running counter to the government's wish to renationalise the NHS. So, can it have it both ways, as suggested by the white paper?

Another related paradox centres on the unique position occupied by the NHS in public policy. Created to advance the principle of solidarity, the NHS seems out of kilter in an age of rampant individualism and consumerism which the experiment with the internal market actively encouraged. It may be that the NHS represents the future, should the love affair with markets and their penetration of all areas of public life begin to wane.

The service ethic underlying the NHS may come into vogue again. Either that, or people will regard healthcare as inherently different and not subject to market forces in the way virtually everything else is. Whatever the outcome, it will almost certainly fall to managers to do ministers' bidding and strike the right balance between a collectivist approach on the one hand and a consumerist one on the other.

If nothing else, the white paper confirms that political management is to remain the predominant means by which ministers exert their will.

In the view of many observers this became a serious handicap during the wave of change which began in 1991. Maybe an effective use of chaos theory will prevent history repeating itself on this occasion. Whatever else may result from it, management consultants will continue to thrive and prosper.

David Hunter is professor of health policy and management at the Nuffield Institute for Health, Leeds University.