The nation's health and well-being
For most of the century the state in Britain has recognised it has a responsibility to ensure that nobody should be without the basic necessities of life as a result of poverty, unemployment, old age or sickness. After the Second World War the government created health and welfare services which have been the core of 'the welfare state'. The system has grown over the years, funded mainly by tax, but also through National Insurance contributions, compulsory payments made by all earners and their employers. These contributions guarantee a small pension on retirement (now fixed at the age of 65, except for women born before April 1950, who still qualify at the age of 60), a period of income support after becoming unemployed, and a pension if unable to work because of sickness.
By the end of the 1970s these services were becoming increasingly costly and bureaucratic. During the 1980s the Conservatives decided upon major reforms, to use less money but to use it with more discrimination. Reforming the welfare system has proved more complex than expected, and it still suffers from serious problems, some arising from the very attempts at reform.
The National Health Service
The National Health Service (NHS) was established in 1948 to provide high-quality free medical treatment in hospital and outside. Its fundamental principle was equitable access for all, regardless of wealth.
The system rests on a network of family doctors, or 'CPs' (general practitioners) as they are usually known, with attached nurses and other community-based staff. People may register with any GP they choose, as long as the GP is willing to register them. A GP with a full register might refuse extra patients. Beyond the group practice lies the whole arrangement of hospitals and community health services, for example health visitors who monitor the health of vulnerable
categories of people, such as mothers and newborn babies, or the old and infirm.
GPs remain the backbone of the NHS, dealing with the vast majority of ailments, and referring those requiring more specialist diagnosis to a hospital, or notifying the healthvisitor of those who need to be monitored at home. (Many other industrialised countries lost their 'first line' of generalist 'family' doctors during the post-war years.) Except in an emergency, it is normally the GP who refers a patient to hospital for more specialist care, or for an operation. Most GPs have about 2,000 people on their register, some of whom will hardly ever visit the GP's surgery. Others may be regular callers. A GP is often expected to offer pastoral guidance as well as medical skill. On a normal day a GP might see about 35 patients in surgery, and make up to 1 0 home visits to those who feel too ill to attend surgery. The strength of the system lies in a good working knowledge of the families and individuals in the catchment area, their housing, lifestyle and employment conditions. Good GPs build up an intimate knowledge of their 'parish', and take into account not merely the specific complaint of a patient but also the patient's general conditions of life. Almost all GPs now operate in small groups of perhaps three or more, employing nurses and other professionals such asphysiotherapists or dieticians, so that they can share the administrative load and also offer a wider service.
The NHS is the responsibility of the Secretary of State for Health. Until 1995 England was divided administratively into 14 regional health authorities, usually based upon a university medical school, each authority was subdivided into between 10 and 15 districts, and each district was based on one large hospital but also included other hospitals. Since 1996 the regional health authorities have been reduced to eight. Similar authorities or boards exist in Wales, Scotland and Northern Ireland.
The entire system is free, with the exception of prescribed drugs, dental treatment, sight tests and spectacles, for which there are standard charges, except for old age pensioners, children under 1 6 and some other categories for whom some of these items are free. Anyone entering hospital for surgery will receive all their treatment while in hospital, including drugs, free of charge. Over 80 per cent of the costs of the NHS are funded out of the income tax system. The balance is paid for out of National Insurance contributions and from the prescription charges mentioned above.
On the whole the system has worked extremely well, providing care at lower per capita cost than almost any other industrialised country. Foreign health economists admire the NHS above all for its GP system. GPs control referrals to hospital, and therefore costs, and also provide a local register of the population whereby one may engage in all sorts of targeted health measurements, including vaccination and immunisation. They also admire the NHS for its treatment for all, regardless of the ability to pay; atax-based funding relating the service to need rather than to income. Finally, they admire its relative efficiency - a characteristic thatwould surprise the patients in most British hospital waiting rooms. They have been critical of its lack of consumer choice, and believe that British doctors should delegate more tasks to nurses, and nurses more tasks to order lies.
The cost of providing a service that employs just under one million staff has always been enormous. By the late 1980s, the health and linked social services budget reached one-fifth of all public spending, two-thirds allocated to hospital and community services and one-third to family practitioner services: the GPs, dentists and pharmacists. There is little flexibility for reformers, since over 70 per cent of the budget goes on staff costs.
During the 1980s the government tried to improve efficiency and cut costs. Hospitals reduced the average patient stay by 20 per cent, and increased the number of 'in' and 'day' patients by a quarter. For the NHS such stringency was uncomfortable, for Britain already spent proportionately less on its health service than any other of the main 20 industrialised countries, with the exception of New Zealand, Greece, Portugal and Spain.
By the mid-1980s the annual financial demand on the NHS was growing by 2 per cent above inflation. One factor was the ageing population, possibly accounting for an annual 1 per cent increase in costs. There will be over half a million people aged over 90 by 2001. Every person over the age of 75 costs the NHS seven times more than one of working age. In addition, medical advances were adding about 0.5 per cent annually onto NHS costs. In the winter of 1987-8 the NHS moved into a state of crisis with the sudden closure of 4,000 beds all over the country.
So the Conservative government carried out the most fundamental reforms of the NHS since its foundation. In keeping with its free-market philosophy, it sought a 'demand-led' system which would get as close as possible to consumer choice, and would compel health practitioners to account for the cost of the treatments they prescribed. As long as doctors did not have to face the financial cost of their own work, it was argued, they would not make the hard choices necessary for maximum efficiency. Consequently two categories of 'purchaser' were created: the local health authorities and volunteer CP group practices. They purchased hospital services according to which hospitals seemed to offer the best value for money. It was believed that such a competitive regime would force hospitals to be ultra-efficient in order to attract custom. Purchasers were free to choosecontract providers outside their own health authority area. Furthermore, hospitals were free to opt out of local health authority control to become 'NHS Trusts', autonomous and directly funded hospitals selling their services to GPs and health authorities.
The internal-market philosophy had two inexorable effects. First, it was inevitable that a competitive market would produce both winners and losers, and that the winners would tend to be the best-equipped or best-located hospitals that were not overwhelmed with high local levels of sickness. Also, not every GP practice was given purchasing powers, and by 1996 only about 50 per cent had become 'fundholders'. In order to qualify for fundholding status, a GP needed to have a register of 3,000 patients, except in certain rural areas. Fundholding proved controversial. Some doctors welcomed the powers it offered, both for their patients and themselves. Others regretted the greatly increased administrative burden. Meanwhile those GPs without fundholding powers were unable to exercise choice. They found themselves compelled to belong to a market system but with the health authority determining where their patients would get treatment. Where health authorities were under acute financial pressure it was inevitable that the cheapest hospital treatment was the most attractive. Thus a 'two-tier' system, one tier superior to the other, was unmistakably emerging, contradicting the original NHS ethic.
Another area for concern was the loss of public accountability. The government created a Health Executive to manage the new service. This quango was answerable only to the Secretary of State for
Health. This loss of accountability was also true at a local level, where elected representatives of the community were no longer part of the local health authority. The other obvious defects were the burgeoning of a health
bureaucracy to deal with the new internal market at all levels, the huge transaction costs of running a contract market, and the severely reduced ability of health authorities to plan strategy when their own powers were largely limited to that of purchasers.
Yet there were also gains. One of the main observable achievements of the new system was to halve the waiting times for hospital operations in its first five years. GP practices were also encouraged to widen the services that they were able to perform, including minor surgery, as a more effective primary health care service that could significantly reduce the number of referrals to hospital.
By 1996 the NHS was again in crisis, partly because of inadequate funding. The annual budget by 1996 was in the order of £42,000 million, but tight funding once again led to the closure of wards, and waiting lists again began to grow. One of the problems was that the new system reduced the flexibility of the health authorities to switch money between one need and another. The creation of self-governing trusts, for example, locked up capital investment in relatively small pockets. But it was also true that the annual increase in the cost of the NHS had risen to almost 3 per cent before inflation, by 1996.
A Private Finance Initiative to attract commercial enterprises to build and own new hospitals which could then be leased to the local health authority for periods of 25 or even 60 years, shows little sign of working. The scheme was intended to alleviate the government's short term difficulties. But health authorities feared being locked into long-term contracts from which they had no escape. Moreover, no private investor was likely to put the health of the community before its own commercial interest.
By 1996 the NHS faced a serious staffing crisis. This was the result of several factors: a miscalculation over medical school enrolment in the 1980s that led to a 15 per cent fall in trainee doctors between 1988 and 1994; a greater proportion of women health professionals and of these an unexpectedly high number wishing to work part- rather than full-time; low morale among GPs, leading to many older ones taking early retirement. Finally, there was the quite unforeseen impact of stricter immigration laws introduced in 1985. Twenty-five per cent of GPs and many junior hospital doctors are from abroad. The change of law in 1985 brought this source of expertise to a halt.
It conveys an idea of the difficulties Labour inherited in 1997 that two-thirds of the health authorities entered the new financial year (which always starts on 6 April), four weeks before Labour's victory, already in debt. Labour faced the immediate task of finding sufficient money to resolve the crisis it inherited. It also had to decide what to do with the internal market to which it was opposed. Rather than subject the NHS to yet more revolutionary changes, Labour decided to modify the system in the hope of retaining its virtues but eliminating its defects. It therefore proposed increasing and restructuring the purchasing power of general practice. It proposed to abandon fundholding by individual group practices, and to group up to approximately 50 GPs serving up to 100,000 people, and to give them about 90 per cent of the NHS budget. These groups would choose the best local balance between community nursing (which keeps people out of hospital), direct primary care including the subsidy for prescribed medicines, and referral to hospital (the least cost effective option). It was hoped this would achieve a real shift from institution-centred to person-centred care, and foster strategic planning at the local level. Each group would still make service agreements with local hospitals. The reduced number of health authorities would receive less than 10 per cent of the NHS budget, and use it for highly specialist treatments like heart transplants. Labourhopes that this will achieve yet more administrative savings while making the NHS more responsive to community needs.
Britain has one of the highest levels of coronary disease and strokes in the industrialised world, particularly among those under 65 years of age. Between 1990 and 1994 the NHS was able to achieve a reduction of 19 per cent in deaths from these causes. But there is a long way to go to bring it into line with other industrialised countries. The British rate of premature deaths from this cause is, for example, three times higher than that in France. It has also been a priority to reduce the mortality rate due to cancers. The NHS has been less successful in some other areas. Take smoking, which accounts for 11 0,000 premature deaths and 50 million lost working days each year, andcosts the NHS £610 million annually in treatment. The level of adult smoking currently is about 33 per cent. While smoking among the adult population is slowly falling, it is increasing among 11-15 year-olds, particularly among girls. The level in this age band in 1994 stood at 13 per cent of girls and 1 0 per cent of boys.
Like much of the industrialised world, obesity is a growing problem. Despite health warnings and advice on diet, obesity in Britain has doubled in the decade 1 986-96, with 1 7 per cent of men and 1 3 per cent of women now clinically obese.
Excessive drinking is also a concern, with an increase in alcohol consumption among women, a symptom of the growing part played by women outside the home and the greater stress this implies. One million people have a serious drink problem, but the disturbing feature is that it has become a young addiction. Twenty is the peak age for alcoholic consumption, in contrast with half a century ago when few young men drank.
Britain also lives with a potential time bomb caused by 'mad cow disease', Bovine Spongiform Encephalopathy (BSE). The future incidence of the human form of BSE, a strain of CreutzfeldtJakob Disease (CJD) cannot be predicted, and 15 years may pass before the scale of human infection is fully known.