14 October, 2007
The joys of the internal market
It transpires that, due to a quirk of the NHS's bizarre internal trading rules, a hospital loses fees if it treats patients too quickly, even when resources are available. To maximize revenue, the hospital must ideally schedule operations for between 4 and 6 months after referral. Later than 6 months and a Government target is missed. But earlier than 4 months and the referring Primary Care Trust does not have to pay.
This is typical of the unintended consequences of "internal trading" structures, and not just in the public services, either.
Well it's typical of markets ruled by arbitrary external rules - i.e. not markets.
Can you imagine an actual market operating in this fashion?