The NHS is a vast and complex organisation, never out of the public eye and now the focus of major political argument. The author examines the way the NHS works and the incentives that motivate everyone concerned - the general public, the health professionals and managers, and the government. There are too many perverse incentives in the NHS (the fact that hospitals which treat more patients receive no additional cash and risk overspending, for example) and the final chapter proposes a new structure with different incentives which would make the NHS more flexible and more responsive to its users. A new system would have its costs, compared to the current tight control by the Treasury, but the costs are arguably worth bearing if a better service results.