Deals first, with the theoretical framework within which the
Internal Market (NHSIM) is expected to operate and the particular
problems which occur when a service is provided to a consumer free at
the point of consumption (i.e. non‐marketed). Second, deals with some
costing procedures and stresses the importance of considering costs of
an episode jointly with other benefits. Both of these activities are at
a relatively early stage in the NHS in general. Third and fourth, deals
with two examples (internal medicine and cardiothoracic surgery) of how
the NHSIM has fared during the first year at the Freeman Hospital,
Newcastle upon Tyne. Shows how principles of the theory of finance may
be applied to contracting for Coronary Artery Bypass Graftings.