National Health Service History

Geoffrey Rivett

Hospital services

Hospitals and hospital trusts, and particularly acute hospitals, remained under great and  increasing pressures. The introduction of new technology was costly in itself, but not only did the costs of a procedure rise, but the demand and volume could also go up as better and less traumatic forms of care became available. Each month English trusts saw over a million new patients in acute specialties, and a further million attended A and E departments. The reduction in the GP's gate keeper role, particularly out of hours, was one factor in the rising demand on A and E departments. Squeezed by rising demand and decreasing bed numbers for financial reasons or because of staff shortages, the morale of doctors and nurses fell.  Inadequate numbers of beds, shortages of nursing and support staff, the increased time spent on training junior doctors, nurses and theatre staff, a reduction in the working week as a result of European legislation, and the time spent on management, audit and clinical governance, reduced the productivity of clinicians.  Pressure to meet Department of Health waiting list targets, to reduce the time people waited in A & E for admission, and to speed discharge home or to a nursing home, led to tension in hospitals and unsatisfactory experiences for patients. The NHS Plan (2000) added more targets - one Chief Executive said there were over 300 to be met - and the finance available meant that no one issue could be tackled entirely satisfactorily.  The NHS was working so near its limits that the pressure of events locally might rapidly overwhelm hospitals  particularly if shortage of money restricted the support offered by social services. 

Bed Numbers

The inquiry outlined three options

• an increase in the number of acute beds

• a major increase in health services in the community

• or the provision of ‘intermediate care’ services, to prevent avoidable admissions and make discharge home easier.

There was no commitment to fund any of the options.   Intermediate care the new aim, had problems.  First, management in search of money to keep acute hospitals running had often closed the natural centres for such care, the GP hospitals and the later Community Hospitals.  Second, there was little evidence that such facilities could deliver effective outcomes in a cost-effective manner; the 'hospital at home' schemes had not done so.  Third, nobody had explained how, if intermediate facilities were to be funded from money taken from the existing acute hospitals, those hospitals would keep within budget, increase their throughput and improve the quality of their own services.

A year later it was decided to grow NHS expenditure by over twice the rate of past trends.  The long term bed forecasts of the NBI were obsolete.  It was accepted that capacity was a restraint to the reduction of waiting times and waiting lists. The then Secretary of State, Alan Milburn, accepted that more beds were needed.    Bed closure to keep within budget ceased to be an option.  New PFI projects no longer had to reduce bed numbers. Staffing shortages in almost all staff groups was also a major restriction in the hospital service.  Authorities were now asked to produce plans for increasing their capacity.

Hospital reconfiguration and design

Since 1948 the pattern of district hospital services had been established by Enoch Powell's Hospital Plan (1962) and the Bonham-Carter Report (1969)).  Reconfiguration now seemed to be needed because of  

Configuration might also be influenced by clinical networks.  Cancer networks involved cross referrals from district units to more specialised ones.  Another model developed in ophthalmology in London where Moorfields NHS Foundation Trust, long a national centre for postgraduate education and tertiary referral, developed over a period of years ten or more outreach centres.  These satellite centres were managed from Moorfields, all provided outpatient services and some of them surgical and inpatient care as well.  Locally based staff were Moorfield's staff and by 2007 Moorfields was providing the ophthalmological services for St Georges', Barts and the Royal London, Homerton, Watford, Barking, Mayday Croydon, Northwick Park and Ealing.  Moorfields had found an organisational way of making the hospital's population base secure, necessary for its survival and for its research and education, and at the same time providing a good clinical service to hospitals that would probably not have been able to provide a viable clinical service by themselves. Moorfields linked with University College London, through the Institute of Ophthalmology, and to City University as its academic partners.  The Royal Marsden, similarly, opened a satellite unit at Kingston, again staffed by itself.

The Ara Darzi report for London in 2007 (see below) foreshadowed substantial reallocation of work between hospitals and the centralisation of care needing high tech and round the clock facilities.  Commissioning was one of the drivers to achieve that, using the specialist service top-up finance to make it less affordable for district hospitals to provide them. District general hospitals faced handing their specialist services to regional centres of excellence because they would no longer be paid the services' full cost.  The Department of Health developed a new 'top-up' system in which hospitals performing certain specialist procedures received a premium over the payment by results tariff. A number of DGHs that perform specialist procedures were excluded from the list of providers eligible. Services affected included cardiology, respiratory, orthopaedics, neurosciences and specialised children's services.

 Rating hospitals

Since 1948 the problems of delivering higher throughput of acceptable quality within tightly restricted financial allocations, have led to various initiatives.  Three decades earlier the Hospital (later Health) Advisory Service had visited crisis ridden long stay hospitals.  Conservatives favoured competition, Labour central control, targets, clinical guidelines (NICE), inspection and hit squads and star rating systems. 

The Department of Health developed global measures of the performance. The system introduced from 2000-1 gave zero, one, two, or three stars to indicate performance. Performance, such as inpatient and outpatient waiting times, cleanliness and financial results, were pulled together in a formula that relied on the data available rather than any profound analysis, and did not reflect the effectiveness of clinical care measured in patient outcomes because of the lack of data.  Indeed in adult critical care there was no relationship between outcomes and star ratings.  At that point the system was not aimed to assist patient choice but to target hospitals with poor management, or select hospitals that could be trusted with a greater financial or management freedom.  Three star trusts would have greater freedom to manage their own affairs.  Those with no stars were at risk of central task forces, to 'work with them'.

The league tables were odd.  Some prestigious hospitals were found to be unsatisfactory, though many of those failing had major problems to face, rebuilding, hospital mergers or the implementation of major new information systems.  Others had adopted many forms of good practice without it showing in the assessment.  Star ratings were dependent on data  the trusts themselves had supplied and some was fallacious.   All zero star hospitals were in the southeast where people were healthier, but it was more difficult to recruit quality staff on national pay scales than in the north.   The no-star Dartford and Gravesham was given new management, as were three other no-star trusts but this idea (known as franchising) was gently dropped.  In general competent NHS managers, rather than taking on a failing hospital, preferred to maintain the high star rating of their own hospitals and aim for foundation trust status.

Better performers were be rewarded financially and considered for the additional freedom as NHS foundation trusts  yet the Audit Commission in its first review of progress towards the NHS Plan (Achieving the NHS Plan) in June 2003 found little correlation between star ratings and management, financial stability or clinical outcome.  Similarly published results from Dr Forster, an independent healthcare assessment organization, showed that standardized hospital mortality derived from Department of Health statistics showed no correlation with the number of stars awarded to hospital trusts. Three-star trusts might have a higher than average mortality, and zero star trusts a lower one. (The Times,  May 12, 2003, p 4)  Hospital assessment was moved away from the Department of Health in 2003 to CHI but were becoming discredited.  As financial allocations, clinical staff and hospital management were unlikely to change rapidly falling from  ‘a hero into a zero’ within a year was hard to explain. The Department published a consultative document, Standards for Better Health, in February 2004 and at the same time Sir Ian Kennedy, chair of the Healthcare Commission, the successor to CHI moved to a new system of core standards.  Trusts declared how far these had been met, supplemented by external audit, sometimes at random, sometimes if there were danger signals..

 (The Healthcare Commission and its assessments are considered in more detail in the section on Quality)

Waiting Lists

Labour’s manifesto had included a promise to reduce the waiting lists inherited from the Conservatives by 100,000.   Successive governments had grappled in vain with the problem and, against all predictions, over the years Labour made great progress.   As the first winter of its administration approached (1997) waiting lists increased rather than falling.  Labour allocated money for waiting list reduction and appointed a ‘czar’ to oversee it. Faced by shortages of senior clinical staff, some trusts paid huge sums to tempt doctors to work out-of-hours to reduce lists. In the winter of 1998/1999, there was a  fall in numbers waiting; yet problems with emergency admissions remained, ambulances queuing to get to the door of A & E, and patients queuing on trolleys to get into beds. The winter of 1999/2000 was worse, with increased numbers of cases of influenza and few intensive care beds. Elective services were often delayed.  There were deaths as patients were transferred between hospitals and the provision of more intensive care beds became a service priority.  2000/2001, a mild and wet winter, provided fewer crises but no sense that matters were improving.  From  2002/3 there were few problems - things were getting better.

The waiting list initiative was criticised by doctors and NHS management for it could lead to simple but less urgent cases taking priority over the more difficult or life-threatening ones. In June 2001, after the election, Alan Milburn backed away from the 1997 pledge to concentrate on waiting times and waiting times became a significant part of the targets on which managers was judged  Comparatively few hospitals were responsible for the majority of patients waiting six months or more for admission and in general these hospitals were not lacking in capacity or in areas of deprivation.  The Audit Commission highlighted 3 trusts where there had been deliberate misreporting of waiting lists in a report  in March 2003, and reporting errors in a further 19.  The National Audit Office found that sometimes patients who had waited too long were excluded from the figures.

Progress was steady.  As waiting times fell, targets were tightened. from 12 to 6 months.  Then a more relevant target was set, measuring the whole time from GP referral to the completion of treatment, 18 weeks. By March 2008.85% of those requiring admission and 90% of those not needing admission were to be treated.

The effects of the NHS Plan on hospitals

Many of the proposals in the NHS Plan were designed to improve hospital care. 

• More hospital building, and the Public-Private Partnership (PFI/PPP)

• There were to be more doctors and more nurses. Staffing was a major constraint on development of the NHS led to an increased accent on personal management, now called "human resources".  Workforce Development Confederations were established in April 2001 to lead on workforce planning, commissioning training programmes, and managing contracts with local organisations, such as universities and encouraging recruitment. Coterminous with Strategic Health Authorities, they were integrated into them in 2003. A strategy for human resources within the NHS Plan, More staff working differently, was issued in July 2002.  An electronic staff record would, by 2005, provide a single human resources and payroll system for every NHS organisation

• Improved hospital cleanliness

• Hospital food, long a subject of criticism, was singled out for improvement.  A report by the Nuffield Trust (1999) had shown that much food was wasted because it was served at rigid times, was unattractive, and patients who needed help with feeding often did not receive it.   The Plan proposed a minimum standard of continental breakfast, light lunch, an improved 2 course evening meal, and drinks and snacks mid-morning and mid-afternoon.  A team of professional chefs was recruited and produced a book of "Chef's Recipes". The cost of the recipes being high, hospitals delayed their introduction.  Some patients preferred their traditional cottage pie to celebrity cuisine and the initiative seemed to wither on the vine.

• The aim that by 2003-4 two-thirds of outpatient appointments and elective admissions would be pre-booked, and no longer subject to waiting lists. 

The Modernisation Agency, established in the wake of the NHS Plan, distilled its recommendations for the improvement of hospital systems into ten "high impact" changes.

NHS Patients and Europe

A ruling by the European Court of Justice in 2001 that medical care in hospital was subject to European law on the free movement of services, and that prior authorization was an obstacle to free movement of patients, raised important issues.  The Court ruled that patients had the right to seek treatment aboard if they faced undue delay led to the possibility of health authorities placing patients in pain who had already waited months for knee and hip joints with European hospitals, where rapid and effective treatment was available. The legal background for overseas treatment was strengthened when, in 2003, a High Court judge, Mr. Justice Munby ruled that "if treatment in this country under the NHS is unduly delayed, then an NHS patient is entitled as a matter of European law to travel to another member state, there to be treated on terms requiring the NHS to reimburse the cost of that treatment.  The BMA said that as we were in Europe we might as well take advantage of the surplus capacity there, German hospitals said they had spare capacity to treat Britain's entire waiting list.  Alan Milburn agreed to  allow overseas treatment if after clinical assessment the patient wanted it and the primary care trust could meet the cost from its budget.  The Department of Health coordinated pilot areas  for authorities wishing to buy packages of operations from continental hospitals. In January 2002 the first group of nine patients left for Lille, and accommodation a world away from crowded NHS wards.  Others followed shortly after for treatment Germany - hip or knee surgery, or cataract operations.  Evaluation by the Health Economics Consortium at York described the experience of the first 190 patients as "very positive".  In spite of this once the trial was over few further patients were sent.  The priority both for the Department and for health authorities was expansion of capacity at home.  The European Community, however, took up the issue in 2007 in the hope of developing general rules across all countries of the Community.

Services in London  (additional material at London's Hospitals)

Each line represents a Todd Pair, and the colours the ultimate association. 

Organizationally there have always been two main ways of organizing and subdividing London's health services - the starfish with a radial organisation reflecting the transport links, and the doughnut with the cream in the middle and the suburbs peripherally. Bevan had gone for the starfish and London had been divided into four radial health regions at the start of the NHS.  In June 1998, the Secretary of State, Frank Dobson, announced that from 1 April 1999 London would become a single NHS region (a doughnut). This would give greater cohesion and coterminosity with government departments and local agencies, including local authorities. The arguments against such a pattern, vetoed by Bevan in 1946, and rejected again in the early seventies, were now weaker. A London region had been proposed in the Tomlinson Report (1992). Change had therefore been expected and would have ripple effects on the surrounding areas. A new boundary at the western side of Bedfordshire would separate an Eastern region from a large ‘L’ shaped South-eastern region. Covering 7 million people, the London region had 100,000 employees and a budget of £7 billion.  However, the University decision to go for five radial strategic health authorities followed by the Turnberg report and the decision to abolish first regions and then Departmental regional offices returned the starfish to favour, and five radial strategic health authorities were established within London in 2002.  In 2006 the five SHAs were amalgamated into a single SHA, which adopted the name of Healthcare for London. This body considered that its predecessors had not been configured to lead the pan-London improvements necessary -  a problem faced in the 1970s by the London Health Planning Consortium.  In fact changes in organisational structure made centralised planning difficult while, simultaneously, the establishment of Foundation Hospital Trusts increased the power of some hospitals to determine their own future.  In a sense, the individual characteristics of the medical school grouping determined a number of issues.  For example

• Imperial College provided firm academic leadership of the teaching hospitals with which it was associated, and brooked no arguments.  Some of the hospitals, however, had significant financial problems, making application to become a foundation trust difficult.  Nevertheless, the group was selected as one of five National Biomedical Research Centres.

• King's College was associated with powerful hospitals, Guy's and St Thomas'. Internally there were power struggles to determine the future pattern of service.

• University College London Hospitals while having only a small local catchment, had substantial financial assets and an ideal academic location next to UCL, and perhaps the strongest research base in London. It too was selected as a National Biomedical Research Centre.

• Barts and the Royal London had everything one could desire in terms of a local population, but the association with QMC, comparatively weak as a research institution, did them no favours.

• St George's, far from the centre of London and with no substantial university link, was not in the same game.

It was against this background that the Darzi report, A Framework for Action appeared in 2007.  The report was also to influence a national review of the NHS commissioned by the Secretary of State, Alan Johnson.

A Framework for Action (the Ara Darzi Report on London, 2007)

The new London SHA  commissioned the then Professor Sir Ara Darzi, Professor of Surgery at Imperial College, to review the health services in London ten years post Turnberg.  His first report in March 2007, The case for change, outlined eight reasons for change, for example health inequalities, failure to meet patients' expectations, the need to centralise specialized care, the relationship with academic medicine, and value for money.  The follow-up,  A Framework for Action, was published in July 2007.  It appeared just after the author had been appointed by Gordon Brown as a junior health minister and ennobled so he could act for Labour in the House of Lords.  He was then charged with undertaking a wider review of the NHS, to ensure that the future of the service was ‘clinically led’. (see Policy)

The report was a substantial document and the product of many hands. Put at its most vivid, failure to adopt some of the proposals would lead to unnecessary deaths, as treatment would be poorer than currently possible. In common conditions such as stroke early MRI scanning affected outcome.  Patients with heart attacks did best in units where 24 hour angioplasty was available.  Technical groups had looked at the nature of the London population the trends and likely health problems in London in the future.  Clinical working groups had considered appropriate policies for care, and the care pathways that seemed best suited to differing groups of patients.  These included maternity and newborn, staying healthy, mental health, acute care, planned care, long term conditions and end of life care. On this basis a changed pattern of health service organisation was proposed. London primary care would be provided by 150 polyclinics, handling much care previously undertaken in hospitals. The number of major acute hospitals would be cut by more than a half, and there might be some 12 specialist hospitals and 8-16 major acute hospitals. Trauma, accidents and emergency surgery would be reorganised. Supporting papers dealt with the clinical problems of other specialties including maternity, long term, mental illness and terminal care.  Patients with emergencies would be admitted to the hospital best suited to their needs.

It was as if the health service would be reconstructed as if starting from scratch. Brilliant in conception, clinical in slant, but a recipe for turbulence according to the Guardian, it was a blueprint for radically different NHS, not unlike the 1920 Dawson report. Some conclusions flowed directly from the evidence – e.g. stroke.  Others were less well founded, for example there was no evidence that polyclinics were the answer for every locality, reducing ease of access even were they affordable.  Neither was it clear how far this top-down concept fitted with patient choice, the freedom of foundation trusts, practice based commissioning or payment by results.   Lord Darzi’s ministerial appointment led to fears his proposals might be applied nationally, not just in London.  It was however a London report, probably inapplicable to more sparsely populated areas.

25 years before London had been the first area in the country to make radical efforts to reduce the number of "surplus" beds.  The reduction in numbers had now proceeded to the point where not merely elective surgery but emergency admissions were jeopardized.  Attempts had been made to improve primary health care to the level elsewhere in the country to ease the strain on London's hospitals, and there had been high hopes for the London Initiative Zone, established in 1993 after critical reports on the state of primary care in the capital.  Projects were established to improve GPs' premises, recruit a new cadre of GPs, introduce innovative approaches to problems and develop cost-effective care outside hospital. A review of achievements five years later showed that many projects had improved premises but in some areas the standards of many surgeries remained unacceptably low. London still had fewer young GPs, more single-handed practices and larger lists. There were more practice nurses, but although primary care in the capital was improving, it was doing so no more rapidly than elsewhere in the country. Services still lagged behind.  The initiative was  terminated.

The Private Finance Initiative (Public-Private Partnership)

The quality of our hospital buildings has always been substandard.  Until 1991 all major capital expenditure in the NHS was funded by central government from tax or government borrowing. The NHS did not have to pay interest or repay capital, so in effect new equipment and buildings came "free." When, in the 1960s, money and building materials had begun to be less of a problem, Enoch Powell's Hospital Plan (1962) had proposed over 200 schemes.  In the event a third were completed and a third partially completed. The oil crisis and shortage of money slowed progress and by 1990 the capital for new construction had been radically reduced.  Little came from central funds though some money was available from land sales. Planning priorities were set by regions and the Department of Health and were based on service needs and, in some cases, political factors.  The Private Finance Initiative reversed the trend, and a substantial rise of investment in the hospital service began. 

The 1990 NHS and Community Care Act established hospitals as independent business units in the public sector and required them to pay for their use of capital through "capital charges."  From 1992, under the Conservatives, the shortage of public funds for hospital development was made good by greater reliance on private finance, the Private Finance Initiative, (PFI).  Labour on achieving power maintained and developed this policy, later referred to as public-private partnership.  Major PFI schemes were typically "DBFO" - i.e. a private sector consortium designs the facilities based on NHS specified requirements, builds them, finances the capital cost and operates their facilities.   In return the NHS trust paid an annual fee to cover both the capital cost, including the cost of borrowing, and maintenance of the hospital and any non-clinical services provided over the 25-35 year life of the contract, after which it would be handed over in good state. 

Schemes were selected on longstanding principles.  A case for change, based on health care need, had to be established, and under PFI an "outline business case" was prepared for central approval. A detailed statement of what was desired and who should bear the financial risks was submitted. At first the business case generally included a reduction of beds, driven partly by the long standing view that the acute sector should be curtailed in favour of primary care and long term care, and partly by the cost.  Private finance was more expensive than public borrowing and schemes carried a substantial transaction cost. Affordability was a critical constraint on planning and services might be designed to fit pre-determined financial allocations (nothing new, for the Nucleus Hospitals had been designed on that basis).  Potential providers, and the best privately financed solution, would be identified, and the contract once approved would be finalized and awarded.  Around 2000, was it accepted that  reducing beds in the acute sector had gone too far, and thereafter a reduction in capacity was no longer seen as a virtue.  By 2004 it was clearly stated that new builds would have to be shown to fit local needs, national, regional and local policy, improve patient access and clinical quality, and make better use of resources.

PFI became "the only game in town".  Government argued that PFI would result in better hospital designs, the private partner taking on the risk of construction cost and time over-runs, and more efficient maintenance.  (Guy's Hospital Phase 3 rose in cost by over 300% and was three years late.)  Critics, such as Allyson Pollock, believed it was locking the NHS in to expensive 30-year contracts. Buying hospitals, essentially on credit, was not cheap in the long-run, and was a debt which had to be serviced by future generations.  The value for money assessment, critics believed, was skewed in favour of private finance.  PFI more than doubled the cost of capital as a percentage of trusts' annual operating income. (BMJ 2002;324:1205-1209).  A select committee of the House of Commons reported in 2002 that PFI was being blamed for ills not directly related to it, whereas the many benefits ascribed to it had yet to be proved; and recommended that more capital was found from central sources for major schemes so that PFI projects could be compared with  conventionally procured ones.

Many PFI schemes involved facilities management, laundry, catering, cleaning and security.  Some smaller ones dealt with support services including pathology, imaging and dialysis. They might involve the provision, maintenance and replacement of medical equipment at the end of its useful life. A new generation of Diagnostic and Treatment centres, and projects concerned with information technology, were also candidates for PFI. As contracts could include staffing and clinical services, as well as the provision and maintenance of buildings, the voice of the various skill groups had to be heard. UNISON opposed schemes in which private companies could set their own terms and conditions of service, which might not be up to NHS standards (low those these could be).

Between May 1997 and March 2002 64 major PFI hospital developments were approved with a total capital value of more than £7.5 billion and 11 were completed and operational by early 2002 including Carlisle, Dartford & Gravesham, South Buckinghamshire, Greenwich, North Durham, Calderdale, South Manchester, and Norfolk & Norwich, Hereford and schemes at Worcester and Barnet & Chase Farm.  For a few schemes, e.g. Sheffield, government pledged public funds.