Published: 17/02/2005, Volume II5, No. 5943 Page 25

Jonathan Shapiro argues that the publicprivate 'egg' has been broken - It is time to make the omelette

In every corner of the developed world, there is a recurring societal conundrum: the tension between the needs of the individual and those of the population.

In a 'pure' market economy, individuals take precedence, while in a socialist society they are subsumed by the more egalitarian needs of society. Between them, European 'social democracy' negotiates an uneasy balance between extremes.

Nowhere may this be seen more clearly than in healthcare, where the UK has traditionally taken a planned approach, with the individual (patient, manager, or organisation) taking second place to the greater good. This has produced relatively high costeffectiveness, but has been notoriously insensitive to choice and user empowerment. Moreover, the centralising controls required to maintain such a system have tended to stultify creative thinking and create a risk-averse system that is monolithic and slow to change.

Attempts have been made to change the system, the 1990s Conservative government reforms offering perhaps the most radical example - the internal market. However, the concept of fairness was still too important to British voters, and it was abandoned.

In its first years of government New Labour maintained this creative public sector tension, balancing greed and need at every level. But politicians were frustrated by the slow pace of change and the so-called 'forces of conservatism'. The introduction of foundation trusts, payment by results, new contracts and the rising profile of the independent sector all signal a sea change in the philosophy of the NHS.

Instead of expecting all its 1.3 million workers to have egalitarianism engraved on all their hearts, the Really New NHS recognises that individuals work best in relatively small organisations, where their contribution can be more directly acknowledged and incentives are more tangible.

The champions of equity and fairness will be the commissioners of healthcare, taking an overview of their local health economy and using publicly funded legal contracts to work with providers, all of whose prime objectives are purely to survive and thrive. In this way, the tension between individual and society is simplified: the commissioners consider the needs of society (and will ultimately be answerable, through government, to the democratic process), and the providers focus on their customers to increase market share and improve their bottom line.

Service users will be encouraged to vote with their feet; in theory, when a hospital faces closure, any political backlash will be pre-empted by the fact that it is a consequence of patients' departure, taking with them the funding; how well this theory applies in practice remains to be seen.

The new liberation enshrined in the various new contracts is intended to allow British society to marry the innovation and creativity of an incentivised commercial sector with our need for egalitarianism.

Unleashing this new paradigm is like breaking open a raw egg: it cannot be unbroken. The challenge will be to accept and develop it, and create a model that is completely new for us; publicly controlled demand, privately run supply.

Many unanswered questions remain: how will politicians respond when market forces actually conspire to close a local hospital?

Can they overcome the habits of a lifetime and not micromanage the system? And will NHS commissioners ever be able to monitor effective, enforceable strategic contracts that are holistic and sensible rather than simplistic and perverse?

Dr Jonathan Shapiro is a senior fellow at Birmingham University's Health Services Management Centre and chair of Birmingham and Solihull Mental Health trust.