The efficiency of administrative governance: The experience of the pre-reform British National Health Service

An assumption in the British Government white paper, Working for Patients, introducing the concept of internal markets for a publicly funded service, is that resources employed in the National Health Service had been inefficiently allocated. We find, on the contrary, consistent evidence that, first, resources went where the benefits to patients were greatest and, second, resources were appropriately allocated in terms of their opportunity cost once provision exceeded certain thresholds. These conclusions for nine consultant specialties reinforce similar conclusions for two other services, whose allocations were made by central government (the Scottish Home and Health Department) and general medical practitioners. (C) 1997 Academic Press.