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Back to Subjects - Social Issues

Origins of the NHS

Origins of the NHS The NHS began in 1948 as a result of an act of Parliament in 1946, under the guidance of Aneurin Bevan, then a Minister of the incumbent Labour Government, and in response to the Beveridge Report on The Welfare State of 1942. Most hospitals in the UK had previously been operated as non-profit making concerns. About two-thirds of them had been run by Local Authorities (the bodies also responsible for local Fire Services, Schools, Roads etc), with about one third of them run independently as Voluntary Hospitals. With the NHS act, these were all compulsorily acquired and subsequently administered by the State, and all treatments became universally available at no cost at the point of provision, the whole being centrally funded by taxation. From 1948 onwards all hospital doctors, hospital nurses and all other hospital staff became salaried employees of the State. “The NHS was created as one of the pillars of the welfare state, however, it was soon consuming a large proportion of welfare spending; this issue of cost has remained an important factor throughout the history of the NHS.” The original ethos behind the NHS was the belief that, through the provision of universal and complete health care, free at the point of provision, the NHS would eliminate significant disease and thereby work itself out of a job. Clearly a naive view by today's standards, this ethic remains one of the problems of the NHS today: the electorate still believes that there is intrinsic value in a universal and complete NHS, although no-one can agree on exactly what constitutes 'complete' health care, and none can say what the actual benefit of attempting to provide this (rather than rationed care) might be. Another significant problem that the NHS inherited at its inception, and carries forward today, was its infrastructure. Prior to the NHS Act, hospitals had been constructed generally in places where there was sufficient private custom to make them financially viable as individual going concerns, rather than in response to pure local need. This resulted in a significant excess of hospital service provision, for example, in and around London and a relative dearth in less affluent parts of the country. In the less well off provinces, many of today's hospitals are contained in buildings that began life as 'poor houses', often situated geographically in less than ideal sites for their current use. Although many would like to see 'Green-Field' redevelopment and relocation of acute services, the cost is prohibitive. One of the biggest obstacles to successful management of the NHS, and also to any analysis of its current well being, remains the significant lack of any valid information as to what the NHS does, how much it costs and where the money is spent. Indeed, it is perhaps surprising that 'the 1990 changes' were conceived and implemented as fast as they were, given the lack of information that was available in 1988. (Ham, 1996) Attempts were made at the start to ensure that hospitals began from a 'level playing field' so that they were in fair competition with one another, but the sometimes 10 fold differences in the early quoted costs for identical services in different hospitals had as much to do with differing costs of maintaining buildings as it had to do with a lack of agreement on accounting methods. There remains very considerable discrepancy in pricing. Different amounts are being charged for the same procedure in different facilities, even if they are in close proximity to each other. Further, because the NHS evolved organically since 1948 as an integrated provider of Health Care, the attempt to fragment it into different units, cross-charging one another, rapidly became beset by boundary disputes and uncertainties. There was much Cost-Shifting occurring, for example patients being discharged following Day Case Surgery with instructions to attend the GP for removal of stitches. “The NHS and Community Care Act 1990 was a fundamental reshaping of the economic environment in which the health service operates. The proposals contained within the white paper ‘Working for Patients’ and the subsequent Act held the prospect of a radically reformed, market-based NHS.” (Appleby, et.al. 1993: pp 113-114.) It soon became apparent that the NHS continued to suffer from difficulties despite the changes, but it was (and remains) hard to determine which were a result of the transitional state it found itself in, which due to under funding of the NHS as a whole, which due to mis-management, and which due to fundamental flaws in the 'Changes' themselves. It soon became apparent that the NHS had become a two-tier service, whereby patients of Fund Holding GPs obtained treatment earlier than patients of Non-Fund holding GPs: A report in August 1994 told of a Fund Holding Practice which had moved all of its elective surgical work away from the local NHS hospital to a private hospital (probably staffed by the same senior medical staff) because the waiting lists there were considerably shorter. A two-tiered service, of course, would mean that the NHS was no longer providing care equally to all. Even more unacceptably it would mean that getting better care than the next man depended not on how rich you might be but arbitrarily on where you happened to live and whether your GP was fund holding or not. If all GPs had held Funds, this situation could not have arisen. Because most GPs didn't have the freedom (or energy) to move their patients around to where there was spare capacity, those that did have the freedom and energy were able to cherry-pick. However, many GPs vehemently opposed Fund holding, blaming it for the two-tier system, but also mindful of the fact that managing the Fund required increased work for little or no personal reward, and that as budgets became squeezed the work would only increase. Even those that were Fund holding began to be concerned for the future when Fuses started clawing back Fund Surpluses at the year end and then, as outlined above, before the year end. THE 1999 REORGANISATION: 'THE NEW NHS' The winter of 1995-6, as every winter, saw high profile stories in the press of a seasonal NHS Bed Crisis. General Practitioners found themselves unable to find local hospitals with beds free into which to admit urgent patients. The phenomenon of patients lying on trolleys in Casualty for hours until a bed was found seemed to be spreading. Several ill patients were transferred a hundred miles or more to an available bed, only to die shortly after arrival. In particular, the media latched on to the problems of finding Paediatric Intensive Care beds. Because such stories are a recurring seasonal event, it was difficult to objectively interpret their significance. Several possible factors were put forward to explain the overall problem: hospitals were running with higher than average bed occupancy - usually 95% or more - which meant there was no slack to take up the predictable seasonal increase in emergencies; there is a Nursing shortage, partly due to demography (fewer young people); the division of the NHS into individual, competing 'Businesses' militates against any sort of cooperation to make the best use of limited wider resources. In May of 1997 the Conservative government was defeated in a landslide victory by the Labour Party. The manifesto on which this election had been won included affirmation that their policy on health would include abolition of GP Fund holder status, on the grounds that the two-tier system it engendered was unfair. However, they stated that they believed that the Purchaser-Provider split had been useful, especially combined with a greater input from GPs in a contracting role. Exactly what structure the new government envisaged to replace The 1990 Changes remained unclear through the election and for some months afterwards. They recognised that a further, major upheaval would not be popular amongst healthcare workers, who had only just got used to the last changes. They were also keen to avoid accusations from the Conservatives that they were simply trying to turn back the clock. Late in 1997 the Labour Party policy was crystallised into a new white paper for England called 'The New NHS'. Scotland, meanwhile, had always had a different system for its NHS in any case but with the imminent arrival of a devolved Scottish parliament a separate white paper (along the same lines) called 'Designed to Care' was published. The government wishes to see six principles upheld. The NHS should be: • a national service providing consistently high quality, prompt and accessible services • driven by local doctors and nurses • characterised by partnership, not competition • focused on excellence and quality • a public service, accountable to patients and shaped by their views To achieve this, the total NHS budget will be divided among Health Authorities who in turn will pass the money to primary care groups (PCG) each made up of around 50 GPs. In time, these PCGs will be encouraged to assume complete control of all commissioning/purchasing decisions, and Health Authorities will merge to cover larger populations. Annual contracts between purchasers and providers will be replaced with three- to five- year agreements. The social and clinical services will be encouraged to work together, instead of using the boundary between each other to resist referrals and thereby contain costs. Measures including common budgets will be considered, and ideas are to be piloted in a number of 'Health Action Zones'. As promised, Fund holding was stopped from April 1999 and replaced entirely by PCGs. Hospital and Community Trusts continue as before, but they are strongly encouraged to devolve budgetary responsibility to clinical teams, and to involve senior professionals more in management. Contract negotiations between purchasing and providing bodies should increasingly take on the form of a dialogue between primary and secondary care clinicians rather than between managers. A major part of the white paper is given to quality inititiatives. A number of new national bodies came into existence from April 1999: Commission for health improvements: aka CHIMP. Government appointed, charged with ensuring that local systems are implemented to 'monitor, assure and improve clinical quality'. National Institute for Clinical Excellence: aka NICE. Body of patient representatives, managers, economists, academics and health professionals giving 'new coherence and prominence to information about clinical and cost-effectiveness'. • To speed up the pace at which good-value treatments are used across the NHS • To address variations in treatment access based on different interpretations of evidence of benefit • To reduce the use of treatments 'outside the range of circumstances in which they are clinically cost-effective' The current vision for NICE is that it will issue 10-15 evidence-based guidelines each year covering all aspects of existing medical and prescribing practice. In addition, NICE will make judgements on 30-50 healthcare interventions each year in order to illustrate their clinical and cost effectiveness. The judgement will grade each intervention as either (A) for clinically cost-effective use in the NHS, (B) for clinical trials only and (C) not for routine use. Health Improvement Programmes: locally produced strategies for improving health and healthcare, drawn up in consultation with hospital and community trusts, patients, primary care groups etc. Must be updated annually, and GPs must ensure that the care they provide - as well as the care they purchase - fits within the overall local plan. NHS Information Authority out of a restructuring of the old NHS Information Management Executive. The Authority will be responsible for ensuring that the new NHS IT strategy is followed, with the aim of providing an information infrastructure to support the activities and aims of, for example, NICE. The Authority will subsume bodies such as the National Casemix Office and the NHS Centre for Coding and Classification. The timetable for implementation of 'The New NHS' was given as around 3 years. I believe that the NHS would be a good health service to follow. There are undoubtedly many problems with the service in England and Wales at the moment, even though plans are constantly being put into effect to remedy the far from perfect situation. The defects are obvious for all to see, since the NHS became operational in 1948 there has been an ample amount of time to analyse them. If an emerging foreign government wished to reform their country’s health care service the NHS would be a good base to start from. They would be able to establish their service with 53 years worth of knowledge of the problems we have dealt with. Bibliography: References: • Appleby, J. Smith, P. Ranade, W. Little, V. Robinson, R. (1993) ‘Competition and the NHS: Monitoring the Market’ London: Paul Chapman Publishing. • Baggot, R. (1998) ‘Health and Health Care in Britain’. London: Macmillian Press. • Bailey, S and Bruce, A. (1994) ‘Funding the NHS, The Continuing Search for Alternatives’, Journal of Social Policy, 23 (4), 489-516 • Brittan, L. (1988) ‘A New Deal for Health Care (London, Conservative Political Centre.) • Dawson, D. (1995) ‘Regulating Competition in the NHS.’ The Centre for Health Economics (University of York.) • Ham, C. (1996) ‘Managed Markets in Health: The UK Experiment’. Health Policy vol. 35 No.3 pp 279-292 • Harrison, S. (1988) ‘Managing the National Health Service.’ (Chapman and Hall). • Lowe (1993) ‘The Welfare State in Britain Since 1945’. London: Macmillian press. • Willcocks, A.J. (1967) ‘The Creation of the National Health Service.’ Routledge and Kegan Paul.

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