From Britain:

NHS WARDS, departments and even entire hospitals may be forced to close under the latest health reforms designed to extend patient choice, the Government is warned today.

In a damning report, the Audit Commission says the new funding method, where money follows the patient, is destabilising the NHS and fuelling the current financial crisis.

Instead of increasing choice it could have the opposite effect, with services going to the wall unless the payment system is radically reformed, says the commission. It also cautions that critical services essential to support emergency admissions could close down in some hospitals because of the failure to attract patient referrals.

The system of “payment by results” was brought in by the Government for foundation trusts in 2004-05 to improve choice and efficiency in the NHS and is now being extended to all trusts. Commission insiders gave warning that if foundation trusts, the top- performing hospitals, were finding the system difficult to operate it would create turbulence when extended nationwide.

Under the system hospitals charge a fixed price for an operation, which is agreed nationally, and claim the money back according to the number of patients treated.

Efficient, well-managed hospitals are expected to make a profit from the set price, which includes the costs of equipment and staff overheads. But weaker, inefficient hospitals risk exceeding the “tariff” and falling further into debt.

…

The NHS is already facing a £254 million deficit, despite record funding

A survey by the BMA last month found 385 of the 530 primary care, acute, mental health and community NHS trusts in England had deficits totalling £2.4 billion

The Surrey and Sussex Healthcare Trust has a deficit of £30 million

St George’s Healthcare Trust in London is losing 60 beds, trying to reduce a £24.5million overspend

I love the way they spin the situation, “patient choice is damaging hospitals.”  It’s as if the patients should see to the well being of the hospitals rather than the other way around.

Although they probably are not as rigid as the laws of physics and certainly not as well known there are basic laws of economics the advocates of socialized medicine think they can violate without consequences.  They are wrong and/or ignorant.  They are now paying the price of their delusions and/or ignorance.