John Lister considers decisive moments in the creation and modernisation of the health service and says we must to fight to resist any transition from NHS to DIY

SIXTY years after it was launched to a tremendous wave of public enthusiasm and relief, Britain’s National Health Service is still far and away the most popular of the public services – a jewel in the crown of welfarism and very much the envy of billions of people around the world whose health services are less developed, less accessible and more exclusive.

The NHS has expanded massively, advanced technically and clinically, and changed in many respects – most of them for the better. But for much of its six decades, especially in the past 20 years, it has remained, as it began in 1948, the subject of furious debate over values, resources and policy.

Interestingly, most debate on the NHS has not centred on William Beveridge’s proposal for a government tax-funded provision of healthcare to fill in the gaps left by free-market capitalism. That is now widely recognised (by all but a fringe right-wing who favour reviving the private sector) as the most efficient and equitable means of sharing risk across the widest cross-section of the population.

There was a need for collective provision of services, not only to meet visible health requirements, but also as a basis for British capitalism to secure a fresh social settlement between ruling and working classes in the aftermath of the Second World War. This need became a point of consensus between all three major political parties: Beveridge’s report was commissioned by a Tory-led coalition, written by a Liberal and eventually implemented by a Labour Government.

But there was no consensus on Aneurin Bevan’s model of a National Health Service, which effectively superseded the market system, creating within a capitalist society a new type of service – one which has been uniquely based on need rather than on profit and ability to pay. This triggered powerful Tory opposition.

Even today, as David Cameron attempts to put on a fresh face as a born-again defender of the NHS, it is the tax funding of the health service and the elimination of fees for service which rankle the right-wing members of the so-called Doctors for Reform group. Led by cancer specialist Karol Sikora and promoted by rightward-leaning newspapers such as The Times and the Daily Mail, they explicitly press ministers to roll the wheel of history back towards a new “mixed economy” of health-care in which an expanded private sector and extensive use of co-payments and top-up payments would become the norm.

However, the Beveridge consensus and the huge political popularity of the NHS since 1948 have left little room for the far more extremist notions that healthcare should be viewed and treated like any other commodity or service for sale and that it should be priced and sold with minimal regulation in a free, competitive market.

Denied any popular base for such fundamentalist views, the political right in Britain has instead sought every opportunity over the years to carp at and play upon the all-too-obvious shortcomings of the NHS – the bureaucracy, waiting lists and inefficiencies – implying, without any real attempt to produce supporting evidence, and with a blind eye firmly turned to the staggering additional costs of apparently more advanced and responsive insurance-based systems in the United States, France and Germany, that greater privatisation and an insurance-based system would somehow solve all of these problems at little or no extra cost.

Karol Sikora, for example, claims – contrary to all the published figures – that health spending in Britain is almost equal to that in France and Germany. In fact, this country’s spending on health has just crept up to 8 per cent of gross domestic product, while France and Germany have continued to spend well in excess of 10 per cent. And their health systems are mired in chronic deficits.

One key factor in their higher spending is that insurance-based systems around the world, especially those embodying a multiplicity of insurance funds, are far more complex and costly to administer. In the US, a staggering $400 billion each year – around a quarter of health spending – is squandered in administrative and management costs.

By contrast, tax-funded systems are relatively low in overhead costs. They are equitable in that they draw contributions linked to the ability to pay. And they share risk on the widest possible (and most equitable) basis.

In 1948, Bevan also faced critics from the left – not least in his own party – who were concerned by the concessions he made to the medical profession in order to secure the doctors’ acceptance of the new system.  His legislation actually broke with Labour Party policy and with demands that had been raised for decades by the left-wingers of the Socialist Medical Association.

In some ways, these critics have been vindicated. The results of the compromise have been the semi-detached contractor status of GPs and primary care, the running sore of NHS pay beds, part-time consultant contracts and six decades of unresolved conflicts with the medical profession. Debate continues on whether the NHS could have been established if Bevan had taken a tougher line and tried to force the GPs to accept his new system.

More recently, sections of the left, often backed by people who have been mobilised in defence of endangered local services, have taken refuge in a somewhat self-deceptive defence of the 1948 system. It is not uncommon to find such people harking back to an imagined golden age of NHS egalitarian values and planning and, as a result, downplaying the weaknesses and problems which have always undermined the service – many of which remain unresolved 60 years later.

However, as the NHS enters its seventh decade, the predominant political force promoting market-style policies, competition and private sector provision of services is no longer the Conservative Party but “new” Labour – the contemporary, degraded incarnation of the party which in 1948 boldly established the NHS as a break from a discredited and failing market.

Only Labour now displays any nostalgic affection for aspects of the failed system before the NHS, harking back to what ministers like Hazel Blears have tried to portray as “localism” and a period of co-operatives and mutual societies, while seeking to stimulate the emergence of new “third sector” organisations reviving the spirit of voluntary work. No one thought this was so good at the time. Between the two world wars, trade unions were among those pressing hardest for a tax-funded health service.

The NHS in 1948 opened up a new relationship for patients with hospital doctors and GPs. It also created the conditions for the development of modern medicine, with more equal and rational allocation of resources than could ever have been achieved in a market system.

But all of this was not possible – or even imagined – at the point where the NHS itself was first launched. While we should celebrate the NHS of 1948, we should not regard it as a perfect or finished model of a comprehensive and universal healthcare system.

It couldn’t have been. The NHS emerged from a series of political compromises. It was established on the basis of a financially-challenged, shambolic and unplanned mish-mash of public and private services, in the aftermath of the economic devastation and social turmoil of the Second World War. This country was dependent on massive US loans to avert bankruptcy and still to undergo another five or six years of rationing and shortages of basic goods.

The NHS could never have begun perfect. But we should not underestimate the courage of those that took those first crucial steps along a previously uncharted route.

The new NHS cost £402 million in its first year – more than double its allocation of £180 million. Ophthalmic services, at £22 million, cost 22 times the projected budget. In a war-ravaged economy, still subject to widespread rationing, the demand for spectacles swiftly outstripped the capacity of the industry to supply them.

Bevan had to face up to what then appeared to be unlimited, runaway increases in costs and explain to his Cabinet colleagues that much of this was the result of working people accessing services they needed, but could never previously afford. On that basis he was proud to boast that – in pretty desperate economic conditions – in its first year the NHS issued 187 million free prescriptions.

By contrast, the present-day incarnation of Bevan’s party in government is levying punitive prescription charges of £7.10 an item on low-paid workers in England. The Welsh Assembly, meanwhile, has scrapped prescription charges altogether, and they are being reduced in Scotland.

The British economy’s gross domestic product in 1949 was a relatively puny £12.4 billion. In 50 years, it increased 63-fold to an estimated £787 billion in 1997-98. Amid this fabulous wealth, the share allocated to NHS spending rose unevenly – leaving it well below the average for most comparable European countries. In real terms, adjusted to 1993-94 prices, NHS spending rose less than six-fold in 50 years, from £7.9 billion in 1949 to £40.2 billion in 1996-97.

The under-funding has been one constant through most of the 60 years of the NHS. Partly because of this, a variety of political, social and economic factors have combined to ensure that, even though the NHS has expanded and improved, many of the early weaknesses have remained embedded in the growing structure.

But while the 1948 NHS was by no means perfect, it still represented a fundamental, radical and historic break on a level that is not sufficiently appreciated today. It was a modernisation of a completely novel type, in that it superseded the failed mixed economy and market in health care that had evolved over two centuries of capitalism.

The NHS replaced the market with a new, alternative system which effectively “decommodified” healthcare – in a way which never applied to the other industries nationalised after the war, such as railways, coal and steel – even though the framework of British capitalism was left intact or even strengthened around it.

It is not the socialist critics of current policies, but “modernising” ministers who are harking back to old, discredited models and threatening to drag the NHS backwards. The market system failed to deliver healthcare in Britain well before 1948, and has never delivered universal or comprehensive health services in any country in the world – not least because the people in most need of healthcare are almost invariably those least able to pay the market price of their treatment or afford the inflated costs of private insurance schemes.

To this day, the countries with the most privatised, market-based healthcare systems – the US, India and China – also have the most exclusive, unequal and inadequate ones that leave millions with little or no access to vital services, while a tiny rich elite enjoys almost unlimited and instant access to the most modern technology. Around the world, the for-profit private sector limits itself wherever possible to low-risk, high-earning specialities, targeting surpluses and guaranteed returns, while ignoring social need. More complex and chronic cases are left for public sector provision or to fend for themselves.

Nevertheless, British ministers – unasked and despite public opposition and a lack of any evidence – have, as part of the NHS Plan, created a brand new for-profit private sector in the form of independent sector treatment centres. These receive more than 11 per cent above the NHS tariff payment and massively privileged contracts guaranteeing income for five years.

These centres would have no viable existence without this extravagant Government sponsorship and ring-fenced contracts which exclude bids by NHS trusts. Yet they could destabilise existing NHS services and force the closure of some services with disastrous effects on local patients.

Labour’s infatuation with the private sector is driven purely by ideology, ignoring even common political sense. Nowhere in the world do for-profit private sector companies deliver equivalent services at lower cost than the public sector.

Even the cherished myth of competition driving improvements in services has been refuted by a former advisor to Tony Blair on health, Birmingham academic Chris Ham. His research for West Midlands Strategic Health Authority rather belatedly now concludes that the whole concept of commissioning services from a range of public, private and non-profit providers is flawed.

“Experience and available evidence from Europe, New Zealand and the US indicates that in no system is commissioning done consistently well. Put simply, the challenge in making systems based on a separation of purchaser and provider roles work effectively, reflected in the experience and evidence summarised here, may mean that integration offers a more promising way forward.”

Even more recently, a damning joint report from the Healthcare Commission and Audit Commission has concluded that, despite costing around £1 billion, the Government’s reforms to the NHS, including foundation trusts, have delivered very little in the way of improved services, while the old-fashioned device of spending more money on extra staff and imposing clear targets has delivered the goods.

This report omits another major and costly policy blunder – using the Private Finance Initiative to fund the new programme of hospital building, which has already funnelled billions into the pockets of private shareholders and left NHS trusts mired in massive debts with 30 or more years of index-linked payments still outstanding. Hospital projects worth an estimated £8.5 billion are set to cost the NHS a staggering £53 billion, yielding a surplus of £23 billion or so to private investors. The PFI also means that, if the NHS Plan is fully implemented, up to 40 per cent of the NHS estate could be in private hands by 2010.

The commissions’ report also says nothing about the latest Government enthusiasm for privatisation: bringing in a range of unsavoury US corporations and money-grubbing British companies to take over primary care services and run the controversial new polyclinics which ministers appear more determined to introduce than even Lord Darzi, who triggered this latest lurch in policy in his report on London just 12 months ago.

These policies have already been opposed by a million-strong petition of patients orchestrated in just a couple of weeks by the BMA and by local campaigns and protests against the privatisation of GP practices in Derbyshire, Camden and east London. The Government’s approach is as popular as a dose of herpes, but still its ideologues press forward in their political Charge of the Light Brigade.

The private sector involvement so far has been pointless, expensive and wasteful. However, much of it remains very small in scale and operates at the margins of the health service.

The NHS now has 1.3 million staff, including a significant increase since 2000 in numbers of nurses, hospital doctors, GPs, health professionals and many more skilled clinical and non-clinical support staff whose effort and dedication make the system tick.

The NHS has established a national network of hospitals, health centres, clinics and community-based services. Because it is not a market, resources are allocated on the basis of maximising accessibility and meeting health needs, not on targeting the wealthy and maximising profits.

The NHS is the only source of 24-hour emergency services – ambulances and accident and emergency departments – offering a comprehensive mix of care, including specialist services, which the private sector does not even pretend to provide. As many as 18 million people a year attend A&E units in England and around a quarter of them are admitted as emergencies for hospital treatment. No such treatment is available from the private sector.

Nor are maternity services available from the private sector and only NHS hospitals care for premature and newborn babies and offer specialist care for children.

In England in 2006-07, 7.8 million NHS patients had surgery. Against this, the few tens of thousands treated – at inflated expense – in independent sector treatment centres can be seen as a statistical irrelevance. The Healthcare and Audit Commissions’ report estimates the ISTC caseload at just 1.8 per cent of NHS elective activity.

The past 60 years have seen very important improvements in the treatment even of those patients often regarded as on the margins of the NHS: the elderly and people with mental illness.

The NHS trains and educates nurses and midwives, health professionals, therapists and doctors. Large NHS district general and teaching hospitals offer the basis for the development of specialist skills and a career structure for nurses and medical staff that did not exist before 1948.

NHS district and teaching hospitals are all much larger and offer a vastly more comprehensive range of services than the generally small-scale network of private hospitals which average just 40 beds each and concentrate on the least complex and most profitable types of treatment.

Unlike private hospitals, NHS hospitals are staffed 24 hours a day by consultants and doctors, as well as specialist nurses and experienced support staff. NHS hospitals maintain a network of almost 3,500 critical care beds for patients suffering from potentially life-threatening conditions.

That’s why, when private hospitals face any emergency situation in which an operation goes wrong or a patient has complications, they rush them to the nearest NHS hospital.

It is important to keep hold of these very strong pluses in the development of the NHS as a basis for any serious critique of the inroads of market-style reforms and the private sector.

There is still plenty worth defending in the NHS and still large areas of NHS services which the private sector has no intention of taking over. That’s why we must cherish Bevan’s great modernisation of 1948 and fight to keep our NHS – and keep it public.
John Lister adapted this article from his new book The NHS After 60: for patients or profits? Published by Middlesex University Press at £25, it is available at discount from www.keepournhspublic.com. Additional material is available from London Health Emergency, www.healthemergency.org.uk