Reforms of the NHS are changing the role of the state in the provision of health care. Competition within the NHS (and with private providers) and the introduction of foundation trusts change the way in which providers should be regulated. This paper explores the impact of market incentives in the NHS on the regulatory regime and emphasises the importance of clarifying the respective roles of government and independent regulators. It suggests that economic regulation needs to be developed and aligned more closely with that in the private sector, and urges change to quality regulation, particularly in relation to improvement of performance. [Summary]