Provider diversity in the NHS: impact on quality and innovation. Final report for the NIHR Policy Research Programme

Health system reforms were introduced in the UK in 1990, partially reversed in 1997, and relaunched with the NHS Plan of 2000. The reforms introduced by New Labour (DH 2005a) aimed to encourage a diversity of providers with freedom to innovate and improve service quality. The reforms also involved centralised price setting, decentralised commissioning, and entry reforms to encourage a diversity of providers with more freedom to innovate and improve service quality (DH 2005a). Commissioners of NHS services were expected to engage with new providers from the for-profit private sector and the ‘Third Sector’ including voluntary groups, registered charities, foundations, trusts, social enterprises, and cooperatives alongside incumbent NHS providers1. The promotion of the entry of new providers was designed to stimulate innovation, quality and choice in the provision of health and social care services. Yet relatively little was known about the comparative performance of different types of providers, the barriers to entry and growth which they faced, or how their involvement could best be used to improve quality and innovation in service delivery.