60 Years of the NHS
The Principles
The NHS was based on principles unlike anything that had gone before in health care. Few other countries followed this pathway outside the eastern (Soviet) block. Others tended to rely on an insurance based scheme. |
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The National Health Service became reality on 5 July 1948. Both the major political parties had schemes, but the one adopted was that of a new Labour administration and Aneurin Bevan taking all hospitals into public ownership.
It was a momentous achievement and everybody wanted the new service to work. However, food was still rationed, building materials were short, there was a dollar economic crisis and a shortage of fuel. The war had created a housing crisis - alongside post-war re-building of cities, and the designation of overspill areas, the New Towns Act (1946) created major new centres of population and needed health services. The distribution of consultant services was poor, for specialists were centred in the major hospitals in large cities where private practice was possible, not rural areas. In some large counties there were virtually no consultant services at all.
The NHS was founded just at the time when massive innovation was occurring in the availability of drugs. Antibiotics, better anaesthetic agents, cortisone, drugs for the treatment of mental illness such as depression, good diuretics for heart failure, and the antihistamines all became available. These advances, as well as better radiology systems, raised the cost of the NHS while improving the lot of the patient. Government had little experience of running a health service which had an explosive tendency to expand.
The foundation of the new service was the family doctor or general practitioner (GP). Then, as now, the family doctor acted as gate-keeper to the rest of the NHS, referring patients where appropriate to hospitals or specialist treatment and prescribing medicines and drugs. In 1955 money was made available to GPs to develop group practices, a major improvement.
Dental services consisted of check-ups and all necessary fillings and dentures. There was a school dental service and a special priority service for expectant and nursing mothers and young children that was organised by local authorities. Eye tests were provided by ophthalmic opticians on production of a GP referral note.
These services, managed for the local authority by a Medical Officer of Health, provided nursing support to the family doctors. A major innovation, health centres in the community, had been planned from the outset but few were built. These were to be premises with accommodation and equipment supplied from public funds (via local authorities) to enable family doctors, dentists, nurses, chiropodists and others to work together to provide a range of services on the spot. There were also to be specialist ear clinics at which patients could get an expert opinion and, if needed, a new hearing aid.
The NHS brought hospital services, family practitioner services and community-based services into one organisation for the first time. However the service was "tripartite".
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Hospital services where all staff was salaried.
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Family doctors, dentists, opticians and pharmacists who remained self-employed under a contract for services from an Executive Council
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Local authority health services, community nursing, midwifery, health visiting, maternal and infant welfare clinics, immunisation and the control of infectious diseases.
Financial problems were substantial and it had been hard to cost the day-to-day expenditure in advance. In general the taxpayer provided the same sums that had been available to the voluntary and municipal hospitals that had been taken over. High public expectations were encouraged. Medical science was rapidly gathering pace. Most hospital beds for tuberculosis and infectious diseases were soon closed as treatment rendered them unnecessary, allowing cash to be released for other services, but new developments outpaced savings. More mothers were wanting their babies delivered in hospital, cardiac surgery was being applied to rheumatic heart disease, and the first hip replacements were being performed. Initial estimates of the cost of the NHS were soon exceeded as newer, more expensive and more frequently used drugs were developed. Within three years of its creation the NHS, which had been conceived as free of direct charges for everyone, was forced to introduce some modest fees. Prescription charges of one shilling (5p), legislated for as early as 1949 but not implemented, were introduced in 1952. A flat rate of £1 for ordinary dental treatment was brought in at the same time.
An immediate problem was the improvement of consultant services and their introduction to areas where they were deficient. Paying consultants, whatever their specialty, the same throughout the country helped. The District Hospital, a local hospital serving a natural geographic area and providing all the more usual services a population should expect, was an early concept. Such hospitals were coupled with university hospitals where more complex facilities were available.
Many of the tensions of the early days of the NHS have challenged its senior management and successive Governments ever since. The fundamental questions that tested Bevan and his colleagues - how best to organise and manage the service, how to fund it adequately, how to balance the often conflicting demands and expectations of patients, staff and taxpayers, how to ensure finite resources are targeted where they are most needed - continue to exist. Bevan foresaw this. 'We shall never have all we need,' he said. 'Expectations will always exceed capacity. The service must always be changing, growing and improving - it must always appear inadequate.' Increasing expenditure led to the appointment in 1953 of the Guillebaud Committee to 'enquire into the cost of the National Health Service'. The report (1956) said that the committee found no opportunity for new sources of income or to reduce in a substantial degree the annual cost of the service. Indeed capital expenditure was too low. Guillebaud's comments and recommendations spread far wider than financial affairs and it was, in effect, the first major review of the NHS and its workings. The service's record 'was one of real achievement' and both parties now accepted the need for the service, previously questioned in some quarters.
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By the second decade, the NHS was beginning to settle down. Treatment was improving as better drugs were introduced. During this decade polio vaccine became available, dialysis for chronic renal failure and chemotherapy for certain cancers were developed, all adding to costs.
There were, however, problems for both GPs and hospital staff despite the slow development of a measure of trust between the professions and the Government. The Royal Commission on doctor's pay alleviated some of the arguments which had caused problems during the first decade. Negotiations between the Government and GPs leaders led to the GPs' Charter, a new contract that provided financial incentives for practice development, and a substantial review body award greatly raised GPs' morale. Practices slowly became better housed and better staffed, stimulating doctors to join together in partnerships and groups and the development of the modern group practice.
Better management became a priority. The Cogwheel Report in 1967 encouraged the involvement of clinicians. Hospital Activity Analysis was introduced to provide better patient-based information and in the hospitals 'divisions' were created with the aim of grouping medical staff by specialty to look at clinical/managerial problems. The Salmon report in 1967 made recommendations for developing the senior nursing staff structure and raising the profile of the profession in hospital management. The efforts being made at this time to reduce the disadvantages of the three part structure showed the growing acknowledgement of the complexity of the NHS and the importance of organisational change in order to meet future needs.
While much had already been done to appoint consultants in the major specialties throughout the country, their skills were not matched by the outdated and war-damaged buildings in which they worked. Enoch Powell's Hospital Plan, published in 1962, approved the development of district general hospitals for population areas of about 125,000 and in doing so, laid out a pattern for the future. The ten year programme put forward was new territory for the NHS and it became clear it had underestimated the cost and time it would take to build new hospitals. But a start had been made and with the advent of postgraduate education centres, nurses and doctors were given a better future.
Increasingly the tripartite structure of the service was criticised. Maude, a former permanent secretary at the Ministry, entered a note of reservation about it in Guillebaud. In the 1962 Porritt report, the medical profession also criticised the separation of the NHS into three parts - hospitals, general practice and local health authorities, called for unification and started the debate on the structure of the NHS.
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At the start of the third decade of the service clinical and organisational optimism prevailed in the NHS, but financial stringency after the oil crisis of 1974 and the seven-day Israeli/Arab war reduced the growth rate of the NHS. Morale soon receded until, by 1977, various factors had combined to bring the decade to an unpromising close.
Resources had been distributed unevenly across the NHS since 1948 but now successive Ministers, Richard Crossman and Barbara Castle, set up a Resource Allocation Working Party reporting in 1976. It produced a new system of allocation targets based on population, mortality and other factors. Over the years differential allocations helped regions towards their targets. The gainers were in the north. The losers were Oxford and the London regions which entered a period of distress lasting many years.
Medical progress continued, with advances including the increasingly wide application of endoscopy and the advent of CAT (Computerised Axial Tomography) scanning. Transplant surgery was becoming increasingly successful and genetic engineering slowly began to influence medicine. Intensive care units were now widely available and new drugs appeared, including for non-steroidal anti-inflammatory treatments. Kidney dialysis became more widely available and surgery established a place in the care of coronary heart disease.
In general practice, the GPs' charter was encouraging the formation of primary health care teams, new group practice premises and an increase in the number of health centres. As the result of the Government's Hospital Plan, some new hospitals were appearing and providing people with a better and more local service. The organisation of hospital nursing services was changed by the Salmon Report (not to everyone's satisfaction) and nurse education by Briggs, while the advent of information technology saw the first steps in health service computerisation and clinical budgeting.
On the downside, new infections, such as Lassa Fever emerged. Changes in abortion law led to new pressures on gynaecological services.
From 1968 to 1974 debate continued on the crucial question of how the NHS should best be organised. Key issues included local government reorganisation and the desire to improve the co-ordination of health and social services by matching the boundaries of health and local authorities. Two plans for structural reorganisation fell by the wayside; the third was implemented in April 1974, but not until the Conservative Government that devised it had been replaced in a General Election.
Fourteen Regional Health Authorities, covering all three parts of the NHS and taking on board the teaching hospitals, replaced the previous authorities. Consensus management, a belief that in a multidisciplinary NHS all skill groups should have a voice in decisions, underpinned the organisation. A new tier of Area Health Authorities was established, largely co-terminous with local authorities, inserted in most places between the regions and the district health authorities that managed the hospitals. The advantages were that the Area Health Authorities could plan all NHS services for first time and cooperate with local authorities. The disadvantages were that the system was complex & managerially driven and it soon earned criticism. Within two years, a Royal Commission on the NHS was appointed to look into the problem areas. Just as strategic planning, long-range forecasts and reallocation were introduced, inflation reached 26 per cent and wage restraint came in. Industrial action hit the NHS while consultants were alienated by proposals to reduce private practice within the service.
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The fourth decade was characterised by the growing acknowledgement of the clear financial bounds within which the NHS operated. The NHS had become a victim of its own success. It no longer could do everything medically possible. New technology was being introduced and more people were being treated in more complex ways. This led to rising expectations of the health service in an increasingly elderly population with all its attendant health needs. Beginning in 1978, the winter of discontent, the service's financial problems were worsened by the oil crisis. NHS management tried to improve efficiency and there were continued attempts to set priorities between the sectors of the NHS, the elderly, the mentally ill and the acute services.
Genetic engineering was yielding its first drug successes and magnetic resonance imaging was introduced. The decade saw the advent of surgical minimal access techniques, while the number of operations for fractured neck of femur and osteoarthritis of the hip was reaching almost epidemic proportions. Increasing numbers of heart and liver transplants were being performed and surgical treatment for heart disease was becoming more frequent.
NHS restructuring was implemented in 1982 to simplify the organisation. The area tier was abolished so that there were now 192 District Health Authorities responsible to the RHAs. 7 Special Health Authorities continued to manage London postgraduate teaching hospitals and the 90 Family Practitioner Committees that had matched the earlier Areas persisted largely unchanged.
Consensus management was criticised for managerial slowness. The Royal Commission only 2 yeas before had explicitly rejected general (as opposed to consensus) management into the NHS. This was contradicted only two years later in an influential government-sponsored report (1983) by a leading businessman, Sir Roy Griffiths of Sainsbury's.. General management was introduced in 1984, encouraging:
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one individual at every level of the organisation being responsible and having authority and accountability for planning and implementing decisions;
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more flexibility in team structures;
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greater emphasis on clear leadership
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Doctors were encouraged to become more involved with budget decisions.
Clinical advances placed increasing demands on nursing and medical staff and each profession looked at its education and organisation. One option for the NHS was to move care from a hospital to a community setting. Community nursing was examined and the Government established two reviews, of general practice and nursing in primary health care (Cumberlege).
Yet by 1987 health authorities throughout the country were in debt, waiting lists were growing and hospital wards were being closed - despite evidence of higher spending, steady increases in staff numbers and the treatment of more patients. Neither the public nor the health care professions were satisfied and the service was increasingly subjected to scrutiny in the media.
Closer examination of professional activity followed international concern about rising costs. Discussion began of audit of the results of anaesthesia and surgery. The tension between increasing demand and finite resources prompted experiments in clinical budgeting and a desire for better health service information. Performance indicators were introduced The level of acute hospital services likely to be available in London in the future was examined by the London Health Planning Consortium. If money was to be moved to the north, into the Shire counties, and into services that had been under-resourced such as mental illness and the elderly, acute services would have to be cut in central London.
This was the decade when the first cases of AIDS appeared, foreshadowing the world-wide epidemic.
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The fifth decade opened with widespread uneasiness about the NHS. Younger people were cynical about whether they could rely on the NHS; older ones thought that many things had been better in the past. Hospital throughput had risen and new radical treatments demanded great stamina of patients. Evidence-based medicine, clinical effectiveness and medical audit were to the fore, internationally as well as in the UK.
A White Paper in 1987 laid out the Conservatives' goals for a new contract for GPs. Early the following year Mrs Thatcher announced that all of the NHS would be reviewed. As a result the NHS experienced the most significant cultural shift since its inception with the introduction of the so-called internal market. This was outlined in the 1989 White Paper, Working for Patients, which passed into law as the NHS and Community Care Act 1990. The internal market was the Conservative Government's attempt to address problems, such as growing waiting lists, which had risen in the 1980s as a result of shortage of money while demand rose inexorably. The proposals had been designed to increase the responsiveness of the service to the consumer, to foster innovation and to challenge the monopolistic influence of the hospitals on a health service in which services in the community were increasingly important. Competition was one of the keys.
Before the 1990 Act a monolithic bureaucracy ran all aspects of the NHS. After the establishment of the internal market and the purchaser-provider split, 'purchasers' (health authorities and some family doctors) were given budgets to buy health care from 'providers' (acute hospitals, organisations providing care for the mentally ill, people with learning disabilities and the elderly, and ambulance services). To become a 'provider' in the internal market, health organisations became NHS trusts, independent organisations with their own management, competing with each other. The first wave of 57 NHS Trusts came into being in 1991. By 1995, all health care was provided by NHS trusts.
Over the same period, many family doctors were given budgets with which to buy health care from NHS trusts (and also the private sector) in a scheme called GP fund holding. Each year more and more GPs joined this scheme. Those who did not have budgets were had services purchased for them by health authorities, which bought 'in bulk' from NHS trusts. Patients of GP fund holders were often able to obtain treatment more quickly than patients of non-fund holders. This led to accusations of the NHS operating a two tier system, contrary to the founding principles of the NHS of fair and equal access for all to health care.
In May 1997 Labour came back to power. Observers credit the internal market with improving cost consciousness in the NHS, but at a price: that the competition it encouraged between 'providers' saw unnecessary duplication of services. The new Government changed the approach to the NHS. Pledging itself to abolition of the internal market, it said it would build on what had worked previously, but discard what had failed. Regrettably it discarded some successes and introduced a period of instability. A new white paper issued under Frank Dobson by the Department of Health, "The New NHS. Modern. Dependable", suggested that the service would be based on partnership and driven by performance. Once more there would be attempts to improve performance by changing structure.
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Throughout the sixth decade of the NHS Labour was in power and 10 Downing Street became involved as never before. Organisational turmoil characterised the decade, with the formation, dissolution and rearrangement of the structure and responsibilities of NHS authorities and trusts, and the appearance of a new type of body, the NHS Foundation Trust. Ultimately the organisation consisted of 10 strategic health authorities controlling primary care trusts that contracted with provider trusts, hospitals, community, mental illness and ambulance, as well as managing GPs and primary health care. In parallel new systems of financial flow, payment by results and a tariff system brought instability to the finances of the NHS. Successive Secretaries of State, Frank Dobson, Alan Milburn, John Reid, Patricia Hewitt and Alan Johnson produced a series of plans, white papers and organisational changes.
Clinical progress proceeded apace and the first results of genetic medicine were appearing. Better drugs were developed for AIDS and for the control of cancer, and in spite of the creation of NICE to assess cost-effectiveness the pharmaceutical bills soared. Imaging and non-invasive surgery continued to improve.
The NHS showed signs of becoming an electoral liability and following a report by Derek Wanless, the growth rate of the NHS was increased substantially for five years, guaranteed. However mistakes in the negotiation of contracts, particularly with GPs and consultants, added to the pressure on funds and led to a temporary financial crisis. The recognition that the NHS was, by the standards of the developed world, grossly under resourced led to a major expansion of training for doctors and nurses, and the establishment of new medical schools.
There was a drive to increase capacity and reduce hospital waiting lists. Labour decided that while the NHS was a service provided to all without payment, provision would not necessarily be by a publicly owned infrastructure. Private sector organisations came to build and operate hospitals under PFI, and run clinical services such as Independent Treatment Centres and some NHS Walk-in Centres. "Contestability" - i.e. the introduction of competition between providers, became significant. Private practice was first discouraged and then made an important part a new and more sophisticated market wide open to the private sector. Labour's traditional desire to look at health care from a community and public health perspective led it to policies on these topics rather (with the exception of a ban on smoking in public places) than achievements. The decade ended as it had begun with a review of the NHS, (Lord Darzi) this one unique by virtue of its clinical viewpoint.
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