Patients should be at the centre of service planning and commissioning. Yet often the patient is at the centre of a tug of war between primary and secondary care. Where the commissioner and provider are in financial competition, shared objectives are easier to achieve in theory than deliver in practice For instance, over the first year of Payment by Results, one well known hospital grew its income by 40%. Primary care trusts in its area were soon in dire financial straits. That is not a recipe for success for a major provider to effectively bankrupt its commissioners.

So what is the answer? Competition or co-operation? Both according to NHS Alliance vice-chairman Dr Donal Hynes and national lead for public and patient involvement Dr Brian Fisher. Their new paper explores the tensions inherent to the incentive structure of Practice Based Commissioning (PBC) and Payment by Results (PbR) considers the dilemmas they present and offers alternative ways forward.

Shared savings and a financial technique called programme budgeting, recommended by the Department of Health and endorsed by the National Audit Office and the Audit Commission, can be useful in creating consensus between providers and commissioners, Dr Fisher says.

However systems based on consensus tend to support the status quo and maintain current power balances. Without PBC introducing healthy competition, it will remain the prerogative of the larger providers to set the agenda as to what services are available. Dr Hynes said:

"Properly managed, competition is critical to effective service re-design, with providers competing with each other to meet commissioning needs. That is not a zero sum game. The result will be a net improvement in each provider's services as they strive to better match the commissioner's specification."

Dr Fisher says competition should not rule out co-operation and consensus. He said:

"In practice, it is likely that a consensus approach will work well in some situations whereas sharp competition is needed in others. There may well be a mixed set of approaches both within and between PCTs." The NHS Alliance is the independent body that represents NHS commissioners and all primary care services. It is unique in bringing together PCTs, GP practices and other primary care services, and patients. For more information on programme budgeting, see Programme Budgeting Overview, Andrew Jackson and Chris Young, Department of Health Finance Department.

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