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@Hobo
There are a good range of hospitals spread out throughout london. Along with a fair smattering of private institutions.
( http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=hospitals+london+nhs&sll=51.496133,-0.062141&sspn=0.128245,0.345383&ie=UTF8&t=h&z=12 )
As far as you feel comfortable?
£16'000 is fine. I live in Hackney and pay £450 a month including bills. If you ride everywhere transport costs are nothing. I think there is a misconception that London is generally a really expensive when really when you get past the rent its pretty much the same as everywhere else.