i. The NHS - organisation and structure

How is the system organised? The diagram below outlines the structure of the NHS in England since April 2002. The systems in the rest of the UK are similar but differ in numerous details.

At the top is the Secretary of State for Health, the government minister in charge of the Department of Health, responsible for the NHS in England and answerable to Parliament. The Department of Health and the NHS Executive are responsible for the strategic planning of the health service as a whole. Under the Department of Health are 28 Strategic Health Authorities which plan health care for the population of the region they cover.

Health services are divided between 'primary' and 'secondary'. Primary care services include general medical practitioners (GPs), dentists, pharmacists, opticians, district nursing and numerous other services. These are provided locally, near to where patients live, often in the local high street or even in patients' own homes. The more specialised services, which we use less often and are provided in fewer locations, are called 'secondary care'. This includes not only hospitals but also ambulances and specialised health services for the mentally ill and the learning disabled.

Services are provided by hundreds of NHS organisations called "Trusts". "NHS Trusts" supply secondary care. "Primary Care Trusts" provide primary care services. But they also have a second, very important role. Primary Care Trusts are responsible for buying almost all of the health care, both primary and secondary, required by the local populations they serve. They are allocated funds each year by the Department of Health to do this and they must decide how much to spend on which health care services for the local population.

How does this system work?

Imagine that you are ill. You visit your GP who diagnoses your illness and if necessary either gives you a prescription or arranges for you to see a specialist at a hospital for a better diagnosis. You may then need to be treated in hospital either as a day patient or as an inpatient. Throughout this sequence you receive the medical care which the professionals - the GPs, hospital doctors and nurses, etc. - consider you need. In other words these health care professionals are acting as your agent to overcome the information problems we identified in Unit 3. But this means that the quantity and type of medical care produced is not normally influenced by your preferences or your willingness to pay - there is no market mechanism whereby your consumer demand can be expressed.