Through reforms in the 1990s and now in the 2000s, the NHS has been developing and apparently maturing, by accident and design, a type of competitive, mostly internal market structure.

Trusts and Foundations will live or die in the market, apparently. Losing services will be accountable and services will be cut to meet costs, apparently. But what of the NHS in this new environment of unprecedented distortion of private sector markets through the disregard of risk, i.e. the moral hazard?

Simple really - trusts will never be allowed to fail. And just to be sure that there is no doubt, the government will eventually legislate to that effect.

Will departments and directorates be allowed to fail or have services cut because they fail to generate a net income and so risk services to patients? Never. Good news for patients but especially good news if you tend towards disregard for or are incapable of efficient use of tax revenue and see no value in market behaviour to drive economy and efficiency.

The NHS, even with its apparent unrelenting drive towards market-type behaviour, remains a public service, publicly funded. The pretence of competitive market forces, a pretence now confirmed by legislating against risks of failure, is in the end a very expensive game with public sector rules funded and insured by the taxpayer.

Letting private sector financial institutions genuinely fail seems not to be an option; if massive private risk is protected, then more appropriately massive public risk (Trusts and Foundations) will also be protected, but where is the surprise?

The real test of market risk and behaviours has been blunted by blunting the consequences of taking risks. Where does that leave the two-decade, sometimes confused strategy of competition, markets and genuine accountability in the NHS? Severely blunted.

The moral hazard in the NHS internal market should perhaps be redefined to include the morals and ethics of delivering equitable healthcare services, even if we are the 'cream of the crap', hoping to get better. Policy formulation is complex, full of contradictions and results in predictable and unpredictable consequences. One predictable is that the Board of a failing Trust/Foundation will simply enter the merry-go-round.

Then there is the not so small matter of PFI... but let me find a calm moment to reflect on the moral hazard and the morals of that policy beast another time.

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