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The drive to develop the role of the internal market has left the NHS exposed to the extra costs of competition without experiencing the benefits.

A report from the think-tank Civitas says providers remain all powerful and commissioners weak, innovation is meagre, payment systems encourage providers to be average and inter-professional and inter-organisational collaboration is undermined.

However, there are plus points: there is improved access for patients, reduced waiting times, and increased efficiency and improved financial management in providers.

One of the report's authors Laura Brereton said: 'Market-based reform in the NHS promised great things, but, as things stand, it has yet to bring about the benefits we see from markets in other industries in any comprehensive form: increased responsiveness to customers, better quality, improved efficiency, and innovation.'

She and co-author Vilashiny Vasoodaven produced The impact of the NHS market: an overview of the literature by drawing together evidence on the effectiveness of the various market initiatives in the NHS introduced by the Labour government since 2002.

The report states primary care trusts (PCTs) lack the skills to drive performance and purchase effectively. It adds that they are reluctant to diverge from previous patterns of purchasing care and intimidated by providers.

It says most practice-based commissioning GPs are more interested in self-provision than commissioning new services.

The report adds that competition has led to confusion over the relationship between providers and commissioners, and has made inter-organisational/professional collaboration more difficult.

On payment it said the payment by results tariff has coincided with an increase in activity and efficiency, a decrease in unit costs and improved financial management. But cost control remains poor. The tariff - set at average costs - encourages providers to be 'average', it says, and hospitals are incentivised to induce demand inappropriately.

PCTs in deficit                                                                                                                                                 

Civitas also teamed up with the Guardian this week to produce a list of PCTs they say are running an aggregate deficit of some £130m. Links to the story and data can be found in the further information section.

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