If you want to know what Cameron's vision of the future for public services looks like you could do a lot worse than to read this BBC news piece
The plan isn't a particularly revolutionary one; it's more of a continuation down the path we started out on with the 1990 NHS and Community Care Act. The legislation which instituted the purchaser provider split.
The state, under Cameron's plan becomes like a referee. Its role setting out and enforcing the rules which govern interactions between all the players. If you want to know how this will work the model is taken from the utility privitisations where the states continued interests are represented by industry regulators such as Ofgem
Putting such a system in place is no real practical challenge, but it is a philosophical one. The chief issue is what happens to the public service ethos, can it survive a run in with the profit motive?
1 week ago