How to save the Health Service

For three decades following its creation in 1948, the National Health Service enjoyed a popularity unrivalled in British politics. It was called the envy of the world and ministers in successive governments vied to see who could do more to improve it. Now its survival can no longer be taken for granted. During the Seventies, the consensus which sustained it began to break down and it may weaken further in the years ahead. If it does fall apart, the public may lose its unfettered right to medical care: financial obstacles could become as common here as they are in America. Private hospitals and other forms of ‘creeping capitalism’ have already spread over the health map of Britain, and the right to free care within the state sector may end up being confined to the chronic sick and others who find it too difficult to bear the cost of private medicine.

Few members of any political party seem anxious to have this happen. Before it does, we need to know more about the consensus that sustained the Health Service for thirty years. How did it arise, what held it together and why is it now in danger of breaking down? Rudolf Klein’s admirable new book goes a long way towards answering this question. He traces the political development of the Service, starting with the consensus that formed it in the Forties and following its fate through three broad periods: one of consolidation which persisted throughout the Fifties; a second of growth and technocratic change, which began in 1960 and lasted until the mid-Seventies; finally, a third of disillusionment (and hardly any growth) which covers the period from 1975 to the present. He concludes with two chapters: one which attempts to assess the performance of the Service, and a second which speculates on its future.

All of this is done within the space of 198 pages. And though the subject is complex, Klein presents it so clearly that even those who know little about the Service will find it easy to follow. Nor will their interest flag. Insights illuminate every page, accompanied by sound judgments that are free from the cant which mars so much writing about the Service. From the standpoint of history, however, the book leaves much to be desired. At the start, Klein disclaims any intent to write a history of the Service, announcing that he will concentrate instead on those issues which offer most insight into political processes, but as a result key developments have been missed.

In particular, Klein has given too much weight to the hospital service, failing to recognise the crucial role which general practice played in the emergence of the Health Service. Would the doctors have even tolerated the thought of universal coverage if a large proportion of them had not experienced state service before 1948? As it was, some eighteen thousand GPs had grown to like the panel system which they had lived with ever since Lloyd George introduced his National Insurance Act in 1911. By 1938, only a few thousand GPs and some two thousand eight hundred consultants (which is all there were at the time) remained outside. Furthermore, roughly half the population was covered by the panel, and since 1930 the British Medical Association had made clear its willingness not only to accept provision for the dependants of insured persons but to add specialist medical services as well. (Throughout its life, the Insurance Act covered only insured persons and offered only GP care as far as medical benefit was concerned.) By the time planning on the Health Service began, the profession had committed itself to everything but hospital inpatient care for 90 per cent of the population.

In fact, the Insurance Act made an even greater contribution to the creation of the Health Service, for it was out of the difficulties encountered with its development that the main impetus for wider coverage began. Klein does not really attempt to explain the origin of the consensus that gave rise to the start of Health Service planning in 1938. All he does is to assert that this consensus arose simply from ‘the logic of circumstances, rather than the ideology of politicians or the demands of pressure groups’. He further believes that the consensus was so strong it made the creation of some kind of health service inevitable. This analysis ignores the failure of earlier attempts to extend medical care beyond the limited GP range provided under the Insurance Act. The most vigorous effort was made in 1927, but it came to nothing because the approved societies (the bodies which administered cash benefits under the Act) stood in the way. Thereafter, the two groups most affected – the trade unions and the doctors – started a movement for reform which led to the Beveridge Committee and the legislation of 1946. Without this pressure, it is doubtful whether the consensus of 1938 would have progressed very far. It took an alliance between the Trades Union Congress and the British Medical Association to make it viable.

This alliance began to dissolve even before the Health Service began. It had been held together by a common desire to uproot the insurance industry from its involvement in state provision (workmen’s compensation as well as health insurance), and once that objective was secured, tensions appeared. The doctors were willing to accept universal coverage, but did not want that to mean the end of private practice. And they were even more anxious to preserve the kind of influence which they had secured over the administration of the panel system. This was the main issue in the battle for the Health Service, for it was shared by hospital doctors, too. Yet, in the initial plans they prepared, the civil servants at the Ministry of Health stuck grimly to their passion for local authority control. Klein is too kind to them, for they failed to appreciate the extent of the profession’s feeling. The medical reaction in 1943 and 1944 was so strong that it almost destroyed the chance for any kind of health service at all. The profession’s anger subsided only when GPs were given even greater influence than they had enjoyed under the Insurance Act. And Aneurin Bevan (the Labour Minister of Health who rescued negotiations from the parlous state in which his predecessor had left them in 1945) pacified consultants by removing the voluntary hospitals from the risk of municipal control. This, rather than the desire for geographical equity, seems to have been the main consideration behind his radical proposal to nationalise the hospitals. And if he needed any encouraging, it is likely that the encouragement came from a leading figure in the consultant’s world rather than from the Civil Service source which Klein suggests.

After the Service began, medical opposition evaporated, and at this point Klein’s account shows a firmer grasp. He describes how the consensus which produced the 1946 Act endured for thirty years because the Service was popular with the profession as well as the public. The doctors were delighted to discover that it enlarged their clinical freedom, enabling them to provide care without the constraints found in private practice or under the Insurance Act. It’s true that throughout the Fifties the Service failed to secure its fair share of resources, partly as a result of Treasury concern over the way initial costs had exceeded expectations, but in the Sixties the doctors’ hopes were raised by the plans made for Health Service growth, leading them to believe that state provision would at last fulfil their clinical dreams. New hospitals and health centres appeared on the drawing-board, with the expectation that these would free the doctors from the ill-equipped quarters in which they had practised in the past. Not only that – medical incomes were sharply increased, particularly for GPs, putting some of them on a par even with some consultants. In 1968, an attempt was made within the BMA to turn medical thought against a tax-based service (and in favour of an insurance system), but it came to nothing.

This era, however, was not destined to last. Disillusionment set in during the Seventies, when the economic problems facing the country forced cut-backs in public spending. The Health Service, instead of providing a means of satisfying needs and enlarging clinical freedom, became an instrument for rationing scarce resources. The consequences were particularly harsh for those who suffered kidney disease: between one and two thousand died each year because the country could not afford the range of renal dialysis found elsewhere. Even America provided a fuller store: indeed, its provision was the best in the world, though one would have expected more kidney deaths there because of the financial barriers associated with medical care. From this experience a harsh truth emerged: ‘poor’ countries could not hope to duplicate the resources of ‘rich’ countries, no matter how their health systems were organised. What they could do was distribute resources more fairly, and a movement in that direction began in Britain in the Seventies. The timing was unfortunate. Had it started ten years earlier – during a period of growth – then it might have been more readily accepted. But those who were faced with hospital closures and the loss of other facilities could not understand a process which forced them to level-down rather than up. Dissatisfaction in the so-called ‘rich’ areas of the Health Service grew apace.

To this was added an ill-advised attack on private practice from the profession’s old ally – the trade unions – and this led some in Conservative Party as well as medical quarters to wonder whether the Health Service deserved the support it enjoyed. Demands for an insurance-based system revived, championed this time by the Secretary of the BMA, and some doctors did all they could to spur the growth of the private sector. Now, it was clear, the BMA and TUC were in opposite camps: divisions between the two parties that had once helped to form the Health Service seemed to be a major cause of its falling apart.

Though Klein does not recognise the irony of this development, he does trace the factors which gave rise to it. Indeed, he is particularly good on this period since he had the chance to observe it closely as a contributor to the British Medical Journal. He also makes a fair and reasonable assessment of the value of the Health Service, showing that – with the painful exception of renal deaths – it has largely achieved access to medical care. But his treatment of likely future developments leaves something to be desired. All he does is set forth a number of policy options depending on whether your values arise from a belief in public or private medicine. For example, where the distribution of health services is concerned, he suggests that those who believe in public provision will strive for equality of outcome, while those who believe in private practice will seek to obtain freedom of choice for individuals. This does not tell us very much.

The key factor on which the future of the Health Service depends is finance, and though Klein deals with this subject at various points, he never comes to grips with it. At the very end, he comes close to explaining why. It is evident that Klein does not think sufficient funds will be forthcoming to sustain the consensus in the form in which it has existed in the past. Therefore, he foresees the need to lower expectations as to what the Health Service can provide. The public should take more responsibility for its own well-being and depend less on medical aid. And when medical aid is required, consumers should have greater say over what is offered. In an era of growing scarcity, deficiencies are more likely to be accepted if the public can exercise more influence over the way resources are rationed.

This is the essence of Klein’s message, but there is another, more hopeful way of looking at the financial question. In a world plagued with rising health costs, what is most impressive about the Health Service is its financial record. Few countries spend less on health care than Britain (when costs are related to gross national product), yet the health of its citizens (judged by the traditional guides of mortality and life-expectancy statistics) is better than in countries that spend more (such as America). Klein rightly points out the weakness of these comparisons: as the Black Report so dramatically demonstrated, health owes more to other factors than it does to clinical care. But no other tests are available and until they are, mortality and life-expectancy figures will continue to be used as crude indicators of the success or failure of medical effort. At the moment, then, the Health Service appears to give extraordinarily good value for money.

Against this background, all the concern about waste in the Service can be seen in perspective. Administration costs are still among the lowest in the world despite the bloating of bureaucracy caused by the ill-conceived 1974 reorganisation. And though a switch to generic prescribing would undoubtedly lower drug costs, the amount to be saved would not have much effect on the total Health Service budget. The greatest scope for saving would come from a reduction in bed stays and the spread of day surgery for operations like those on hernias. But while some progress may be made here through the development of ancillary services, the full potential depends on close co-operation between hospital doctors and GPs, and that is not likely to be forthcoming. The profession seems to be content with the sharp division in its ranks, and the latest reorganisation – which leaves GP administration (through family practitioner committees) firmly in a separate compartment – makes the prospect of an integrated service as unlikely as ever.

In any case, the main challenge facing the Health Service lies in a different direction: its future depends not on whether it can save money but whether it can raise sufficient amounts to satisfy needs and preserve clinical freedom. Kidney deaths present a clear warning sign: they are the most serious stain on the Health Service record to date. If similar shortages and deaths appear elsewhere (say, in the treatment of cancer or heart disease), then the moral foundation of the Health Service will be undermined and that will threaten its very existence, since ethical rather than economic considerations have always been its main justification. Unfortunately, when it comes to raising funds, the record of the Service is not good. Health ministers find it hard to compete for Exchequer money with colleagues from other departments. Until recently, education, housing, road transport and defence have all had stronger pressure groups. When it comes to health, most people seem willing to spend more when they are ill than when they are well. A system based on general taxation gives the Treasury great flexibility, but it does not yield sufficient amounts to make the Health Service viable. And when money is provided, too much of it seems to go on current spending rather than on building the hospitals and health centres that are so desperately needed.

One solution is to re-create an insurance system so that public funds will be earmarked for health and not used for other purposes. But this poses an obvious threat to the principle of universal coverage (a threat of which Klein seems unaware), for if some people have to pay large contributions for health care, they may not be content to let others (like the unemployed) have it for free. That, perhaps, is the main reason the proposal has received its strongest support from those who are anxious to promote the growth of private practice. At one point, it looked as though the BMA would endorse an insurance system and the proposal was shelved only after an official study, conducted by the Department of Health and Social Security, came down against it. But the idea may revive if medical dissatisfaction deepens, and pressure may also come from Common Market countries which want Britain to conform to the insurance pattern predominant on the Continent.

In the end, the surest way to preserve the Health Service may lie in a revival of the alliance that helped to create it. The doctors and trade unions now seem to be on opposite sides, but even when allowance is made for the impressive influence exercised by some community health councils, these are still the main pressure groups where health is concerned, and both have a large stake in the preservation of the Service. GPs, in particular, have much to lose, for it is doubtful if general practice could survive without it. As the experience of America and other countries shows, referral systems tend to break down under the pressure of competitive private practice and GPs are then transformed into specialists. Before a new alliance can be formed, however, the unions will have to conquer their aversion to private practice. As Klein points out, the private sector offers an invaluable safety valve: it provides a means of satisfying demands that cannot be met by a state service. If it did not exist, then pressure might mount for restrictions within the public sector, leading in time to an attack on the principle of universal coverage. It would seem, then, that the surest way to kill the Health Service is to demand the abolition of private practice the way the unions and the Labour Party have done. In retrospect, the union attack on pay beds in the Seventies can be seen to have been a disastrous mistake. As Klein points out, pay beds amounted to only just over 1 per cent of the Health Service total. Yet the attempt to extinguish them unleashed a storm which almost destroyed the consensus that had so long supported the Health Service. The attack also led to a substantial growth of private hospitals, so that now a full-blooded independent sector exists instead of a weaker one which could be controlled within the state system proper.

Given the present feeling between the doctors and the trade unions, a new alliance will not be easy to form. Only a fuller understanding of common interests can help to forge it, but not even the possibility of such co-operation appears in Klein’s book. He has missed its potential just as he has overlooked the influence of the earlier alliance that linked the two parties in the Thirties. Indeed, Klein is not even aware of a trade-union presence in health politics before the Seventies, and he wrongly describes that era as the one when the doctors first used the weapons of industrial warfare. This is true as far as the hospital world is concerned, but not when one considers the tortured history of the panel system. GPs tried to ape the unions as far back as the 1890s, and the unions became deeply involved in medical affairs because of the difficulties they encountered under the Insurance Act.

Here again, Klein betrays an ignorance of the influence exerted by general practice. Yet despite these and other failings, Klein’s book is an impressive achievement, and required reading for anyone concerned with the future of the National Health Service.