AbstractMany governments are trying to invent new types of ‘internal’ healthcare market that will expose health services to competitive pressures to innovate, contain costs, raise service quality, and respond better to consumer demands; but not expose them to ‘market failures’ which prejudice universal access to ‘basic’ health services. Policy debates in this area are muddled and constricted by a failure to differentiate the variants of internal market that are available. This article outlines a taxonomy of the main types of internal market: primary doctor purchasing; managed competition; competitive bidding; social insurance; and compulsory private insurance. It notes their main structural characteristics and differences. Although internal market reforms have been intended to support the commercialization of healthcare, the idea of designing new types of economic structure to avoid market failure in healthcare has wider and more radical implications than most policy‐