The start of the NHS

The genesis of the NHS was slow - stretching back into the 19th Century  From the middle of the 19th Century some came to believe that access to health care was part of the structure of civilized society.  Some influences were home grown, but others came from abroad.  Bismark's social security system in Germany, for example, or Flexner's approach to medical education in the USA. From early on some municipalities, such as the London County Council, thought this from so and had the ambition to run hospitals.  Charities had been supported by the benevolent who had subscribed to Hospital Sunday, or the King's Fund, or left money for the support of their local hospital.  The left  argued for the insurance principle - pay when well for care needed when sick. In the First World War the army medical services had shown the benefits of organisation and transport.  The medical profession in the nineteen thirties had published a major report on a national hospital service.  The services that existed were, however, in a mess.  The quality varied widely from town to town, and country areas were generally poorly served.  There might be duplication, or an almost total absence of specialist services. At the government's request in 1920 Lord Dawson produced a forward thinking report on how a health service might be organised.  During the 1930s a series of reports was produced by the BMA (1930), political think tanks such as Political and Economic Planning (1937) and the Hospitals Association.  The King's Fund and the Nuffield Provincial Hospitals Trust contributed their views. Beveridge had little to say about the nature or funding of a health service, though seeing one as essential to a satisfactory system of social security. A major issue became whether a future NHS should be run by local authorities or quite separately on a regional basis.  Local authorities varied substantially in their performance.  The London County Council and Middlesex doing an excellent job - but many did not.  The experience of the second world war, when an emergency medical service was formed as the country came under command and control provided an example of what could be done. During the years of war the Conservatives produced the first White Paper on a future service (1944).  But after Labour's election victory in 1945 Bevan presented to the Cabinet a radically different plan favouring nationalisation of all hospitals, voluntary or council, and a regional framework.  After much tough negotiation this plan went through, with modest concessions.

We take the National Health Service for granted now, but it is only 60 years ago that health care was a luxury not everyone could afford. It is difficult for us to imagine what life was like without free health care and the difference that the NHS made to people's lives. While the same services were available the day after the creation of the NHS as the day before - no new hospitals were built nor hundreds of new doctors employed - poor people who previously often went without medical treatment now had access to services, instead of relying instead on dubious and sometimes dangerous home remedies or the charity of doctors who gave their services free to their poorest patients.  Watch the National Archives film.

GPs

Under earlier legislation access to a GP had been free to workers who were on low pay, but this didn't cover their wives or children, nor did it cover workers with a better standard of living or the retired. If covered it was through a "panel" often operated by Friendly Societies, that paid GPs as little as possible.   GPs in affluent areas could rely on income from their patients.  Poorer ones if they could not pay the small fee, had little right to care but sometimes obtained it through the GP's charity.

Hospital care

Something like a quarter of hospital beds were provided in voluntary hospitals.  These varied from small hospitals in lesser towns, supported by public subscription, to internationally famous teaching hospitals such as St Bartholomew's, Guy's and St Thomas'.  A handful of these went back to a mediaeval origin and others were the result of the charity of the wealthy such as Thomas Guy.  In the 19th Century some were developed in conjunction with universities, University College Hospital and King's College Hospital.  Others, the special hospitals, concentrated on particular diseases or types of patients, children or women. .Each hospital was a law unto itself, deciding its admission policies and raising its funds.  In London, the King's fund attempted to bring some order to the accounts, management and location of voluntary hospitals and to help with the costs.  Patients were often charged, particularly voluntary hospitals

The remaining hospital beds were provided in municipal hospitals, out of the rates, by the local authorities of counties and large towns.  They were available to their ratepayers alone. As well as general hospital beds, local authorities provided maternity hospitals, hospitals for infectious diseases like smallpox and tuberculosis, as well as those for the elderly, mentally ill and mentally handicapped.  The standard varied widely, depending upon the attitude of the Council.  They all had been inherited from the old Poor Law in the 1930s and needed much upgrading.

Mentally ill people

Mentally ill and mentally handicapped people were generally sent away to large forbidding institutions, not always for their own benefit but because that was how the system worked.  Admission was often for life.  Under the poor conditions prevailing many patients became worse and "instituitionalise", not better.  However there was, in a true sense, asylum for people who could be 'strange' in private, and a basic standard of food and accommodation.

Older people

Older people who were no longer able to look after themselves fared particularly badly. Many ended their lives in the workhouse - a Victorian institution feared by everyone - where paupers did unpaid work in return for food and shelter. Workhouses changed their names to Public Assistance Institutions in 1929, but their character and the stigma attached to them, remained.

1948-1957

The principles of the NHS

The NHS was based on principles unlike anything that had gone before in health care. Few other countries followed this pathway outside the eastern (Soviet) block.  Others tended to rely on an insurance based scheme..

• It was financed almost 100% from central taxation.  The rich paid more than the poor for comparable benefits and Bevan regarded this as a crucial part of the scheme
• Everyone was eligible for care, even people temporarily resident or visiting the country.  Anybody could be referred to any hospital, local or more distant.
• Care was entirely free at the point of use, although prescription changes and dental charges were subsequently introduced 
• Organisation was based upon 14 Regional Hospital Boards that oversaw local hospital management committees.  The teaching hospitals were directly responsible to the Ministry of Health 'for they served the nation, not the locality.'

Administrative difficulties 

The new service was "tripartite".

• Hospital services - all staff was salaried.
• Family doctors, dentists, opticians and pharmacists - self-employed under a contract for services from an Executive Council
• Local authority health services, community nursing, midwifery, health visiting, maternal and infant welfare clinics, immunisation and the control of infectious diseases.

It had been hard to cost the day-to-day expenditure in advance and the taxpayer provided the same sums as previously available to the hospitals.  High public expectations were encouraged.  Hospital beds for tuberculosis and infectious diseases were soon closed as treatment rendered them unnecessary, allowing cash to be released for other services, but new developments outpaced savings.  Hospital delivery was increasing, cardiac surgery was being applied to rheumatic heart disease, and the first hip replacements were performed. Estimates of the cost of the NHS were soon exceeded and within three years some modest fees were introduced, prescription charges of one shilling (5) and a flat rate of £1 for dental treatment.. 

A start was made on introducing consultant services in areas where they were deficient. Paying consultants, whatever their specialty, the same throughout the country helped. The District Hospital, a local hospital serving a natural geographic area, was an early concept.  Such hospitals were coupled with university hospitals where more complex facilities were available.

Balancing demands 

Many of the tensions of the early days of the NHS have challenged its senior management and successive Governments ever since. The fundamental questions that tested Bevan and his colleagues - how best to organise and manage the service, how to fund it adequately, how to balance the often conflicting demands and expectations of patients, staff and taxpayers, how to ensure finite resources are targeted where they are most needed - continue to exist. Bevan foresaw this. 'We shall never have all we need,' he said. 'Expectations will always exceed capacity. The service must always be changing, growing and improving - it must always appear inadequate.'   Increasing expenditure led to the appointment in 1953 of the Guillebaud Committee to 'enquire into the cost of the National Health Service'.  The report (1956) said that the committee found no opportunity for new sources of income or to reduce in a substantial degree the annual cost of the service.  Indeed capital expenditure was too low.  Guillebaud's comments and recommendations spread far wider than financial affairs and it was, in effect, the first major review of the NHS and its workings.  The service's record 'was one of real achievement' and both parties now accepted the need for the service, previously questioned in some quarters.

Family health services 

The foundation of the new service was the family doctor or general practitioner (GP). Then, as now, the family doctor acted as gate-keeper to the rest of the NHS, referring patients where appropriate to hospitals or specialist treatment and prescribing medicines and drugs.  However the GPs had been stretched by the war, as younger doctors were away, their pay, status and morale was low.  In 1955 some money was made available to GPs to develop group practices, a major improvement.

Dental services consisted of check-ups and all necessary fillings and dentures. There was a school dental service and a special priority service for expectant and nursing mothers and young children that was organised by local authorities. Eye tests were provided by ophthalmic opticians on production of a GP referral note. 

Local Authority community health services

These services, managed for the local authority by a Medical Officer of Health, provided community nurses to support to the family doctors.  A major innovation, health centres in the community, had been planned from the outset but few were built.  These were to be premises with accommodation and equipment supplied from public funds (via local authorities) to enable family doctors, dentists, nurses, chiropodists and others to work together to provide a range of services on the spot. There were also to be specialist ear clinics at which patients could get an expert opinion and, if needed, a hearing aid.

1958-1967

Doctors' pay 

There were, however, problems for both GPs and hospital staff despite the slow development of a measure of trust between the professions and the Government. The Royal Commission on doctor's pay alleviated some of the arguments which had caused problems during the first decade. Negotiations between the Government and GPs leaders led to the GPs' Charter, a new contract that provided financial incentives for practice development, and a substantial review body award greatly raised GPs' morale.  Practices slowly became better housed and better staffed, stimulating doctors to join together in partnerships and groups and the development of the modern group practice. 

Management 

Better management became a priority. The Cogwheel Report in 1967 encouraged the involvement of clinicians.  Hospital Activity Analysis was introduced to provide better patient-based information and in the hospitals 'divisions' were created to group medical staff by specialty to look at clinical/managerial problems. The Salmon report in 1967 encouraged the development of a senior nursing staff structure and raised the profile of the profession in hospital management.

Porritt Report 

Attempts were made to reduce the disadvantages of the three part structure and showed the growing acknowledgement of the complexity of the NHS and the importance of organisational change in order to meet future needs.  Maude, a former permanent secretary at the Ministry, had entered a note of reservation about it in Guillebaud (1956). In the 1962 Porritt Report, the medical profession also criticised the separation of the NHS into hospitals, general practice and local health authorities, called for unification and fired the debate on the structure of the NHS

1968-1977

In general practice, the GPs' charter was encouraging the formation of primary health care teams, new group practice premises and an increase in the number of health centres.  As the result of the Government's Hospital Plan, some new hospitals were appearing and providing people with a better and more local service. The organisation of hospital nursing services was changed by the Salmon Report (not to everyone's satisfaction) and nurse education by Briggs, while the advent of information technology saw the first steps in health service computerisation and clinical budgeting.

From 1968 to 1974 debate continued on the crucial question of how the NHS should best be organised. Key issues included local government reorganisation and the desire to improve the co-ordination of health and social services by matching the boundaries of health and local authorities.   Two plans for structural reorganisation fell by the wayside; the third was implemented in April 1974, but not until the Conservative Government that devised it had been replaced in a General Election.

1974 NHS reorganisation

Fourteen Regional Health Authorities, covering all three parts of the NHS and taking on board the teaching hospitals, replaced the previous authorities. Consensus management, a belief that in a multidisciplinary NHS all skill groups should have a voice in decisions, underpinned the organisation.  A new tier of Area Health Authorities was established, largely co-terminous with local authorities, inserted in most places between the regions and the district health authorities that managed the hospitals. The advantages were that the Area Health Authorities could plan all NHS services for first time and cooperate with local authorities. The disadvantages were that the system was complex & managerially driven and it soon earned criticism. Within two years, a Royal Commission on the NHS was appointed to look into the problem areas.  Just as strategic planning, long-range forecasts and reallocation were introduced, inflation reached 26 per cent and wage restraint came in. Industrial action hit the NHS while consultants were alienated by proposals to reduce private practice within the service.

Resources planning

Resources had been distributed unevenly across the NHS since 1948 but now successive Ministers, Richard Crossman and Barbara Castle, set up a Resource Allocation Working Party reporting in 1976.  It produced a new system of allocation targets based on population, mortality and other factors.  Over the years differential allocations helped regions towards their targets.  The gainers were in the north.  The losers were Oxford and the London regions which entered a period of distress lasting many years.

1978 - 1987

Consensus management was criticised for managerial slowness. The Royal Commission only 2 yeas before had explicitly rejected general (as opposed to consensus) management into the NHS.  This was contradicted only two years later in an influential government-sponsored report (1983) by a leading businessman, Sir Roy Griffiths of Sainsbury's.. General management was introduced in 1984, encouraging:

·         one individual at every level of the organisation being responsible and having authority and accountability for planning and implementing decisions;

·         more flexibility in team structures;

• greater emphasis on clear leadership

Doctors were encouraged to become more involved with budget decisions.

Clinical Advances - Genetic engineering was yielding its first drug successes and magnetic resonance imaging was introduced.  The decade saw the advent of surgical minimal access techniques, while the number of operations for fractured neck of femur and osteoarthritis of the hip was reaching almost epidemic proportions.  Increasing numbers of heart and liver transplants were being performed and surgical treatment for heart disease was becoming more frequent. This was the decade when the first cases of AIDS appeared, foreshadowing the world-wide epidemic.

Audit and Performance indicators

Closer examination of professional activity followed international concern about rising costs. Discussion began of audit of the results of anaesthesia and surgery. The tension between increasing demand and finite resources prompted experiments in clinical budgeting and a desire for better health service information. Performance indicators were introduced The level of acute hospital services likely to be available in London in the future was examined by the London Health Planning Consortium.  If money was to be moved to the north, into the Shire counties, and into services that had been under-resourced such as mental illness and the elderly, acute services would have to be cut in central London.

Community care

Clinical advances placed increasing demands on nursing and medical staff and each profession looked at its education and organisation. One option for the NHS was to move care from a hospital to a community setting. Community nursing was examined and the Government established two reviews, of general practice and nursing in primary health care (Cumberlege).

Yet by 1987 health authorities throughout the country were in debt, waiting lists were growing and hospital wards were being closed - despite evidence of higher spending, steady increases in staff numbers and the treatment of more patients.  Neither the public nor the health care professions were satisfied and the service was increasingly subjected to scrutiny in the media.

1988-1997

Before the 1990 Act a monolithic bureaucracy ran all aspects of the NHS. After the establishment of the internal market and the purchaser-provider split, 'purchasers' (health authorities and some family doctors) were given budgets to buy health care from 'providers' (acute hospitals, organisations providing care for the mentally ill, people with learning disabilities and the elderly, and ambulance services).  To become a 'provider' in the internal market, health organisations became NHS trusts, independent organisations with their own management, competing with each other. The first wave of 57 NHS Trusts came into being in 1991. By 1995, all health care was provided by NHS trusts. 

GP fund holders

Over the same period, many family doctors were given budgets with which to buy health care from NHS trusts (and also the private sector) in a scheme called GP fund holding. Each year more and more GPs joined this scheme.  Those who did not have budgets were had services purchased for them by health authorities, which bought 'in bulk' from NHS trusts. Patients of GP fund holders were often able to obtain treatment more quickly than patients of non-fund holders. This led to accusations of the NHS operating a two tier system, contrary to the founding principles of the NHS of fair and equal access for all to health care.

Labour in power again

In May 1997 Labour came back to power.  Observers credit the internal market with improving cost consciousness in the NHS, but at a price: that the competition it encouraged between 'providers' saw unnecessary duplication of services.  The new Government changed the approach to the NHS. Pledging itself to abolition of the internal market, it said it would build on what had worked previously, but discard what had failed.  Regrettably it discarded some successes and introduced a period of instability.  A new white paper issued under Frank Dobson by the Department of Health, "The New NHS. Modern. Dependable", suggested that the service would be based on partnership and driven by performance.  Once more there would be attempts to improve performance by changing structure.

1998 - 2008

There was a drive to increase capacity and reduce hospital waiting lists. Labour decided that while the NHS was a service provided to all without payment, provision would not necessarily be by a publicly owned infrastructure.  Private sector organisations came to build and operate hospitals under PFI, and run clinical services such as Independent Treatment Centres and some NHS Walk-in Centres.  "Contestability" - i.e. the introduction of competition between providers, became significant.  Private practice was first discouraged and then made an important part a new and more sophisticated market wide open to the private sector.  Labour's traditional desire to look at health care from a community and public health perspective led it to policies on these topics rather (with the exception of a ban on smoking in public places) than achievements.  The decade ended as it had begun with a review of the NHS, (Lord Darzi) this one unique by virtue of its clinical viewpoint.