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Milbank Q. 1997 Sep; 75(3): 297–341.
PMCID: PMC2751052

From Managed Competition to Managed Cooperation: Theory and Lessons from the British Experience


The United Kingdom led the world in transforming the largest single health care system from a publicly administered service to a set of interlocking contracts. Policy lessons that can be adapted by employers, nations, and other large payers are identified. These lessons are drawn from the improvements that the British made over the design of managed competition, the mistakes and problems they experienced, the underlying trends toward privatization and class discrimination, and the limitations to competition that have led the British toward managed cooperation in collaborative purchasing for the health needs of communities. Yet market reform and the rhetoric of efficiency have justified the shrinking of health services, the shift of costs to household budgets, and the use of public moneys to support private services and investors at greater expense by moving properties and services off the public ledger. In these ways, managed competition can Americanize health care and pose fundamental questions about what policy goals are really being pursued.

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