Managed Competition: Lessons from Britain

As phrases like “managed care backlash” become part of the lexicon in American health care policy circles, it is instructive to examine a managed competition experiment in a vastly different context. Britain’s Conservative government instituted reforms in 1991 to transform the National Health Service (NHS) from a centrally administered service to managed competition between purchasers and providers. Five years later, it replaced those reforms to promote cooperation rather than competition. This Issue Brief summarizes what the NHS can learn from decades of American experience with purchasing care, and what the American health system can learn from the British experiment with an internal market in the 1990s.