This article examines the policy process in Wales prior to the introduction of a National Assembly for Wales and uses this as a framework for assessing the potential impact of devolution. Health and social services form the largest part of the budget of the National Assembly for Wales and the article focuses on health policy as a key area of interest for Assembly Members. The period 1992 to 1997 demonstrates an emphasis on managing both demand and finances thereby promoting the continued dominance, in terms of both resource allocation and prioritisation, of the acute hospital sector. The article then explores how far this has changed and what potential there is for changing this assumptive reality in a New Labour and devolved NHS.