The first year of the National Health Service reforms was characterised by a steady-state situation involving little alteration to existing purchaser–provider organisational structures. However, the second year saw the internal market begin to take effect, though still restricted in many areas. In this paper, some recent developments of district health authority purchaser organisations are explored. The potentially contradictory trends towards (geographically and organisationally) larger purchasers, in the form of mergers and consortia, and the need for locally sensitive purchasing mechanisms are discussed. It is concluded that there needs to be some policy direction concerning the hierarchy of purchasers as the number of general practitioner fund-holders increases and as providers begin to restructure their operations in the internal (managed) market.
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