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When does marketisation lead to privatisation? Profit-making in English health services after the 2012 Health and Social Care Act

When does marketisation lead to privatisation? Profit-making in English health services after the 2012 Health and Social Care Act

Krachler, Nick and Greer, Ian (2015) When does marketisation lead to privatisation? Profit-making in English health services after the 2012 Health and Social Care Act. Social Science & Medicine, 124. pp. 215-223. ISSN 0277-9536 (doi:https://doi.org/10.1016/j.socscimed.2014.11.045)

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Abstract

Governments world-wide have attempted to use market mechanisms and privatisation to increase the quality and/or reduce the cost of healthcare. England's Health and Social Care Act 2012 is an attempt to promote privatisation through marketisation in the National Health Service (NHS). While the health policy literature tends to assume that privatisation follows from private-sector entry points, we argue that this is more likely if firms expect to make a profit. This paper examines the link between privatisation and marketisation in England drawing on 32 semi-structured interviews with private-sector and public-sector respondents, campaigners, and other experts conducted 6–10 months after the implementation of the 2012 Act.

By generating a theoretical framework on the conditions of profitability we seek a better understanding of the conditions under which marketisation leads to privatisation. We find that significant barriers to profit-making remain after the reforms, including a top-down squeeze on prices, uncertainty in market rules, state dominance of funding and provision, and failures to depoliticise the market. These factors restrict private-sector involvement by frustrating profit-making. Where profits are made they are through reduced unit costs and high volumes by a longstanding incumbent in a particular market segment. This, however, restricts marketisation by reinforcing entry barriers.

Item Type: Article
Additional Information: [1] The Author's Accepted Manuscript version has been uploaded in accordance with the publisher's self-archiving policy. [2] Please note: this is the author’s version of a work that was accepted for publication in Social Science & Medicine. Changes resulting from the publishing process, such as editing, structural formatting, and other quality control mechanisms may not be reflected in this document. A definitive version was subsequently published in Social Science & Medicine, Volume 124, (January 2015), DOI 10.1016/j.socscimed.2014.11.045. The definitive version is available at: http://dx.doi.org/10.1016/j.socscimed.2014.11.045 [3] Acknowledgements (funding): This project received financial support from the University of Greenwich and the European Research Council grant 313613, the Effects of Marketization on Societies (TEMS).
Uncontrolled Keywords: England, marketisation and privatisation of healthcare, for-profit healthcare, National Health Service, Health and Social Care Act 2012
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
H Social Sciences > HJ Public Finance
Faculty / Department / Research Group: Faculty of Business
Related URLs:
Last Modified: 20 Oct 2016 15:29
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/12593

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