&quot;The first criteria means the incentive is to get as many students enrolled as they can, &quot;<p>&quot;but the second one means that no one will enroll if the school&#x27;s quality falls off.&quot;<p>that statement needs to be qualified,  I think.  something like &quot;no one will enrol if the school&#x27;s quality falls markedly below that of its (also private) competitors&quot;<p>It doesn&#x27;t need to be the best, just good enough that parents who live in its catchment area have no incentive to travel further to a different school.<p>&quot;Hospitals work for care when you have enough time to decide and can look up average costs and results. Certainly not appropriate for car accidents or gunshot victims, but it works if you&#x27;re getting a early-stage tumor removed and can afford to wait a week.&quot;<p>heh.  thats a pretty specific use case.<p>On an almost entirely unrelated note, it would be interesting to see &quot;hospitals&quot; focused on single purpose delivery....literally birth, or early stage tumors etc....<p>I bet there would be savings available if certain kinds of treatments were treated along a production line.