The Future of the NHS - my analysis, comments and questions

 Ideology and the NHS

1. The Chambers 20C Dictionary provides some meanings of ideology, including way of thinking; body of ideas; and, visionary speculation.  The NHS was founded on humanitarian ideals and as a hallmark of a caring welfare state.  
    

2. Britain did not subscribe fully to socialism.  A free market economy flourished alongside state-owned industries, which included communications, utilities and key industries.  The poor were given equal opportunities through the Welfare State, enabling many individuals to enrich themselves materially, socially and culturally.  Successive governments, both Labour and Conservative, continued with plans for improvement of the NHS.  It was Enoch Powell, then Conservative Minister for Health, who approved the building of district general hospitals in major urban centres in his ten-year Hospital Plan (1962). 

3. However, NHS costs escalated as the range of services and treatments expanded, and staff costs rose to keep pace with rising inflation.  There was a need to contain costs without compromising the range and quality of services.  By now, union-led pay bargaining and strikes were no longer focused on social equality and social welfare.  The public were appalled by The Winter of Discontent (en.wikipedia.org/wiki/Winter_of_Discontent) and the power of unions to cripple British society and the economy.  In 1979, they elected a Conservative government under Mrs Thatcher.  She set out to reign in the trade unions and deal with inflation.
    

4. Conservative ideology believes in capitalism - private ownership and enterprise  within a free market economy.  It deplores state ownership and intervention. So, it was not surprising that Mrs Thatcher's government started to privatise the nationalised industries.  It was argued that competition will reduce costs and improve quality.  The NHS remained a state-funded institution but Mrs Thatcher's government made some far-reaching changes:

• It introduced competition by creating an internal market with providers and purchasers.  Health providers had to become self-managing independent NHS Trusts.  Health authorities and GPs were given budgets to buy health care from competing NHS Trusts and not just from local hospitals.  Patients were no longer getting equal treatment.  But, Conservative ideology accepts that there will be inequalities within such a system.

• It encouraged the growth of a parallel private sector.  There was reduced funding for the NHS, with people losing confidence in it as a public service.  As waiting lists grew, patients paid to jump queues to see their NHS consultants privately and get treatment  in pay beds within NHS hospitals.   Private medical insurance and private treatment centres were given encouraged through tax relief.  There was growing disparity in the treatment of patients in Britain undermining the founding principles of the NHS.

• It contracted out services (e.g. cleaning and laundry) to private tenders.  Thus began the fragmentation and privatisation of the state-owned NHS.

The Conservatives under John Major:

• established the Private Finance Initiative (society.guardian.co.uk/privatefinance/0,,390100,00.html - follow the links to PFI in NHS for an analysis of the pros and cons).  This effectively means that the government contracts to re-pay the costs of buildings, land and some services over a period of 30 years or so.  In theory, this is like house owners taking out a long term mortgage to buy a house from a builder.  However, whereas you can sell your house, make a profit and move up the property ladder - it is near impossible for successive governments to get out of these custom project contracts.  This compromises the scope for policy change by future governments.  Many also argue that it would have been more cost effective for government to borrow the money and undertake the development itself (See http://en.wikipedia.org/wiki/Private_Finance_Initiative and Pollock at www.cf.ac.uk/cplan/ri/lectures/pollock.html).

5. The Old Labour socialist ideology of egalitarianism with emphasis on equal opportunities funded the NHS through general taxation.  Times have changed.  The masses liberated from the poverty of their working-class origins by the Welfare State are said to prefer libertarianism, which values individual freedom and self- rather than state-determination. 
    
6. Within a bona-fide free market, libertarian patients will be expected to make payments directly to health care providers for access to services and treatments or they will secure these through private health insurance.  In Britain, some services (e.g. dentistry) and even prescriptions are now only free to specified categories of people.  Others take out different levels of private insurance with limited cover and pay the excess themselves.  Not everyone in the excluded category can afford these payments. 
    

7. When New Labour came to power in 1997, it held Old Labour votes by pledging to do away with the internal market, GP fund-holding and other libertarian policies.  Instead, New Labour's plans for modernisation of the NHS are consolidating and extending the Conservative reforms and business ethos.   It has continued the fragmentation and out-sourcing of services, such as medical supplies (politics.guardian.co.uk/unions/story/0,,1877951,00.html).  It has increased the amount of money ploughed into the NHS but as Maynard (in Tempest, 2006: Chap 13) and Pollock have pointed out, this may not improve the level or equity of health care.  Since 2004, NHS Trusts (which are already private corporations - en.wikipedia.org/wiki/NHS_Trust) have been encouraged to acquire Foundation Trust (Hospitals - en.wikipedia.org/wiki/NHS_Foundation_Hospitals) status to free them from central government control and to give them greater financial freedom within the health market.  This fragmentation and piecemeal privatisation of the NHS is being resisted (news.bbc.co.uk/2/hi/health/6103290.stm) by NHS unions. 
    

8. Patricia Hewitt (Tempest, 2006: 14) states that the independent sector was only receiving 1% of the total NHS budget in Jan 2006 but that even such low levels had resulted in innovative solutions to reducing waiting times (e.g. mobile surgeries for cataract removal).  Financial subsidies and guaranteed work/payments are being offered to encourage private sector provision.  New Labour believes that individual patient-choice and Payment by Results, with national tariffs for treatments, will drive competition and modernisation.  However, it does not take much notice of collective patient protests against the closure of more conveniently located small local hospitals, especially in non-Labour electoral units (e.g. Scarborough and Matlock).   The Conservative leader dismisses the term ideology (David Cameron, http://www.conservatives.com/tile.do?def=news.story.page&obj_id=127083, Jan 2006) but shares New Labour's adoption of Mrs Thatcher's visionary speculation (ideology). 
    

9. Steve Webb (Tempest, 2006: Chap 4), Liberal Democrat, argues that this pseudo-market approach will increase inequalities in health care, increase the variability in standards within the health service and lead to inefficiencies.  He argues that instead of allowing market mechanisms to drive under-performers into a downward spiral, there should be greater emphasis on co-operation, intelligent monitoring and sharing of best practice.  He cites Denmark to argue that a devolved state-funded NHS can retain a public service ethos and be accountable to local people.  But, I wonder if localism will create even greater disparities in provision across the country.
    

10. All parties in Britain agree that the NHS should be funded by general taxation.  Maynard (in Tempest, 2006: Chap 13) and Pollock point out that this may not be due to humanitarian values since libertarian lobbies (the medical profession, pharmaceuticals and other groups) stand to benefit from a tax-funded NHS health market.  It provides a steady source of income and profits which will not be guaranteed in a free market economy. 
     

11. New Labour will be revising its resource allocation formulae (for distributing the NHS budget) since the poorest neighbourhoods were over 20% below their target funding level (Tempest, 2006: 10).  Conservative Andrew Lansley also cites examples of inequalities in services but his complaint is that Primary Care Trusts in deprived areas are receiving double the resources provided to those in healthier parts of the country (Tempest, 2006: 20).   Therefore, agreement over the need for equitable healthcare distribution does not imply the same outcomes under different parties, representing different ideologically-inspired voters. 
     

12. The NHS will not be able to provide complete cover in the future.  Patients will still have to take out private health insurance at premium rates if they want the best available treatments.  In the USA some 45 million citizens are said to have no health insurance cover (Maynard in Tempest, 2006: 287).  Will those who cannot 'pay' the premiums within a libertarian system, have to be content with limited state provision in UK?  Or, will they have to rely on charitable organisations for access to necessary treatments?  Already, the libertarian taxation system combined with an egalitarian benefits culture is convincing those, for whom the sums just do not make sense, to remain on benefits and engage in the black economy and/or crime.
     

13. New Labour professes an egalitarian ideology with: "We start with our values - the values of a health service funded by all of us, available to each of us, free at the point of treatment, with care based on our need and not our ability to pay.  These values are non-negotiable." (Hewitt, in Tempest, 2006: 7; revised version at www.dh.gov.uk/NewsHome/Speeches/SpeechesList/SpeechesArticle/fs/en?CONTENT_ID=4124484&chk=Pf+t+r). 

    
    All parties echo these egalitarian values.  But, it looks like the two main parties believe that the best way to achieve them is through libertarian values and policies.  They believe that patient choice (within the competitive internal health market they have been cultivating) will drive The Future of the NHS.  However, there are problems (news.independent.co.uk/uk/health_medical/article2001506.ece) with funding, especially of the new expensive treatments and drugs.  This is leading to litigation and regional variations in provision which makes an even greater mockery of patient choice.  Do we want equal treatment or local editions of patient choice?
     

14. Should government spending in other areas be pruned to increase the NHS spend?  Or, should direct and stealth taxes be increased?  What are the options and issues?  Let us look at what the experts say about alternative methods of funding.