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Robert Royce's blog

Contributing Voices
Robert Royce

Those seeking some clarity regarding the future of health care policy in the UK will be forgiven for being baffled by recent events. First up was an abortive attempt by the government to introduce a requirement for National Health Service commissioners (known as clinical commissioning groups –see my article on “Health Care Reform in England” in the August, 2012 issue of Managed Care to undertake formal market testing of services.

Contributing Voices
Robert Royce

One of the key downsides of market-based health care  — that if your costs regularly exceed your income you go out of business  — is not typically associated with the National Health Service in the U.K. That is about to change. It has just been announced that the three hospitals that constitute the South London Healthcare Trust in London, England are to be effectively declared bankrupt, the board suspended, and the organization put under a special administrator. He or she will have just 45 days to provide the Secretary of State with recommendations on what to do with an organization that provides emergency an elective services to about 750,000 Londoners but has racked up nearly $100 million of debt in 2011–12 alone.

Why is this of interest to U.S. readers, aside from adding to the long-running debate on the pros and cons of operating a market in health care? It is because one option is to privatize one or more of the hospitals. By privatize, I mean a whole range of options from franchising out the management to a private company to taking over the assets lock, stock, and barrel and then providing services back to the NHS.