Hospital trusts now compete to attract patients from health purchasers. An idealised community has been modelled that has three hospital trusts and a number of purchasers. Each purchaser chooses where to refer its patients based on treatment and travel costs.
Trusts set their prices taking into account the prices likely to be charged by other trusts.
A computer program models how the idealised health service evolves. In the example above, six purchasers are served by three trusts, shown in blue, pink and yellow circles. Modelling the evolution of this system, two of the Trusts make an operating loss and are deemed to close, leaving a monopoly.