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National Health Service History Geoffrey Rivett

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Many people will come to this site hoping for a short account of the health service

The history of the NHS is that of an organisation established after a century's discussion on the provision of health services to meet a long recognised need.  It appeared at a time when Britain saw health care as crucial to one of the "five giants" (want, disease, squalor, ignorance, idleness) that Beveridge declared should be slain during post-war reconstruction. The cataclysm of war provided an opportunity that might not have been taken in quieter times. the NHS was noble in conception, and has been faced on the one side with ever increasing costs as a result of advances in medical knowledge, medicines and technology, and on the other with the financial restrictions inevitable in a centrally funded service with changing management dogmas and political beliefs.  Whether knowing what we know now Britain would follow the same pathway is anyone's guess.

Below you will find a quick and simplified  over-view.  You may find the link to the inheritance of the NHS is useful for this provides the text of the book's introductory chapter.  The links to 1948-1957, 1958-1967, 1968-1977, 1978-1987 and  1988-1997 provide the text of the book, 1998-2008 the recent decade and 2008-2117 to the decade now starting.  Two links give financial information over the years, earlier and later periods.

More information on the factors that led to the creation of the NHS is to be found in Geoffrey Rivett's earlier book on the Development of the London Hospital System,

This short account of the chronological time line, for simplicity’s sake, is mainly about England, though more detailed texts are available on this site and in hard copy  [1] 

How we came to have a health service.

Others have written extensively on the reasons for a health service.  These included

• The emergence of a view that health care was a right, not something bestowed erratically by charity
• Bipartisan agreement that the existing services were in a mess and had to be sorted out
• Financial difficulties for the voluntary hospitals
• The second world war that ensured the creation of an emergency medical service as part of the war effort
• The cataclysmic effects of the war that made it possible to have a massive change of system, rather than incremental modification
• An increasing view among the younger members of the medical profession that there was a better way of doing things

The genesis of the NHS stretched back into the 19th Century.  Even then some believed that access to health care was part of the structure of a civilized society.  Some municipalities, such as the London County Council, had the ambition to run hospitals as well as utilities.   Hospital charities had been supported by the benevolent while socialists such as the Webbs argued for a state system or the insurance principle - pay in advance when well to provide for the care needed when sick.

In the First World War the army medical services had shown the benefits of organisation and transport.  At the government's request in 1920 Lord Dawson produced a forward thinking report on how a health service might be organised.[2] Under the Local Government Act (1929)  local authorities had taken over poor law hospitals that now became municipal hospitals serving ratepayers, not paupers.. They needed much upgrading.  In general the services that existed were in a mess.  The quality varied widely from town to town, and country areas were in general poorly served.  The London County Council and Middlesex were doing an excellent job - but many councils did not.  There might be duplication or an almost total absence of specialist services. During the 1930s a series of reports were produced by the BMA[3] (1930), think tanks such as Political and Economic Planning (1937)[4] and the Hospitals Association.  The King's Fund and the Nuffield Provincial Hospitals Trust as protectors of hospitals were also deeply involved for they appreciated that the future of the voluntary movement depended upon its efficiency. Working together and regionalisation were they key to this.

The experience of the Second World War, when in 1939 an emergency medical service was instantly created as the country came under command and control, provided an example of what could be done. In his report on social welfare systems Beveridge had little to say about the precise nature or funding of a health service, though seeing one as essential to a satisfactory system of social security (1942).[5] A major issue that later split the Labour Party was whether a future NHS should be run by local authorities, or quite separately on a regional basis. During the war the Conservatives produced the first White Paper on a future service (1944)[6].  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.

The National Health Service started in 1948 in a society weary but disciplined by war, and accustomed to austerity.  There remained resilience, humour and a sense of fun.  People who had become accustomed to little were content with simple things. Cinema, sport and radio, combined with “holidays at home” or the British seaside and Butlin’s camps, were the entertainment, there being little travel abroad.

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. 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. But poor people who often previously 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. 

The services on which the NHS was based were

GPs

Access to a GP had been free to workers who were on low pay, but this didn't cover their wives or children, workers with a better standard of living or the retired. It worked 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 people, if they could not pay the small fee, had little right to care but sometimes obtained it through the GP's charity.

Hospital care

The tempo was slow by today’s standards, lengths of stay being numbered in weeks.  Bed rest was a major form of treatment for heart attacks, ulcers, tuberculosis and childbirth.  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' with substantial investment income.  A handful went back to a mediaeval origin and others were the result of the charity of the wealthy such as Thomas Guy in the 18th Century.  Later some hospitals were developed in conjunction with universities, University College Hospital, King's College Hospital and the provincial teaching hospitals.  Special hospitals concentrated on particular diseases or types of patients, children or women.  But each voluntary hospital was a law unto itself, raising funds and deciding its admission policies.  In London, the King's fund attempted to bring some order to the financial accounts, management, the location of voluntary hospitals, and to help with their costs.  Patients were often charged and many hospitals were near bankrupt.

Local authority services

Most beds were provided in municipal hospitals, by the local authorities of counties and large towns out of the rates.  They were only available to their ratepayers. Local authorities also provided maternity hospitals, hospitals for infectious diseases like scarlet fever, smallpox and tuberculosis, as well as those for the elderly, mentally ill and mentally handicapped and a variety of community services. The standard varied widely, depending upon the attitude of the Council

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 rather than better and "institutionalised".  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 Public Assistance Institutions, the old workhouses feared by everyone. Workhouses changed their names in 1929, but their character and the stigma attached to them remained.  One of the early achievements in the NHS was the development of active geriatrics, when a start was made on dealing with the problem of the “back wards”, seldom visited by doctors, where people ended their days.

1948-1957

The National Health Service started on 5 July 1948.  It was a momentous achievement and in spite of earlier professional opposition to some of the details, everybody wanted the new service to work. However, the weather was frightful, food was still rationed, there was a dollar economic crisis and a shortage of fuel.  Yet the 1951 Festival of Britain, on the South Bank, provided a glimpse of a better future.

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 insurance based schemes.

• 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.  People 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 

Administrative organisation

The new service run by the Minister was "tripartite".

• Hospital services.  The municipal and the voluntary hospitals were brought together in a single system in which all staff was salaried. 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.'

• Family doctors, dentists, opticians and pharmacists were self-employed under a contract for services from an Executive Council.  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, and their pay, status and morale was low.  In 1955 some money was made available to GPs to develop group practices, the beginning of a major development.  Dental services consisted of check-ups and all necessary fillings and dentures. Eye tests were provided by ophthalmic opticians on production of a GP referral note. Pharmacists provided over the counter remedies and dispensed the GP’s prescriptions

• Local authority health services were managed by a Medical Officer of Health, who had lost command of municipal hospitals but still ran immunisation and maternity clinics, provided community nurses to support to the family doctors and oversaw the control of infectious diseases. There was a school dental service and a special priority service for expectant and nursing mothers and young children. A major innovation, health centres in the community, had been planned but few were built.  These were to be premises with accommodation and equipment 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.

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 new 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 (5p) 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)[7] 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 it, previously questioned in some quarters.

1958-1967

By the second decade the NHS was beginning to settle down.  National Service was ending as the last conscripts entered the services.  We had the Beetles and our first package holidays.  Elizabeth David provided cooking inspiration.

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 doctors’ pay alleviated some of the arguments which had caused problems during the first decade by setting up a review body. 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 award which greatly raised GPs' morale.  Practices slowly became better housed and better staffed, stimulating doctors to join together and the development of the modern group practice. 

Management 

Better management became a priority. The Cogwheel Report[9] 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[10] 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 there was growing acknowledgement of the complexity of the NHS and the importance of organisational change 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[11]

1968 - 1977

At the start of the third decade of the service clinical and organisational optimism prevailed in the NHS, but after the oil crisis of 1974 and the seven-day Israeli/Arab war, financial stringency reduced the growth rate of the NHS.  Morale fell as such factors combined to bring the decade to an unpromising close.
In the NHS attention turned to groups of patients who traditionally had a poor deal.  The elderly, the mentally ill and handicapped, children’s services and the disabled were the subjects of reports, sometimes following scandals.

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 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 how the NHS should be organised. Key issues included local government reorganisation (Seebohm) 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 by Labour in a General Election.  It created problems rather than solving them.

1974 NHS reorganisation

Fourteen Regional Health Authorities, covering all three parts of the NHS and incorporating 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 reorganisation.  A new tier of Area Health Authorities was established, with boundaries largely co-terminous with local authorities, between the regions and the district health authorities that managed the hospitals. The advantages were that the Area Health Authorities could unite the tripartite service and plan all NHS services in cooperation 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.[12]  It produced a new system of allocation targets based on population, mortality and other factors.  Subsequently differential allocations helped regions towards their targets.  The gainers were in the north.  The losers were Oxford and the London regions that entered a period of distress lasting many years.

1978 - 1987

The fourth decade was characterised by the growing acknowledgement of the clear financial bounds within which the NHS operated. The NHS had become a victim of its own success. It could no longer even pretend to do everything medically possible.   Genetic engineering was yielding its first drug successes and magnetic resonance imaging was introduced.  Minimal access surgical techniques were introduced, while the number of operations for fractured neck of the 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 coronary heart disease was becoming common. This was the decade when the first cases of AIDS appeared, foreshadowing the world-wide epidemic. Developing countries could not even start to emulate the patterns of health care practicable in the West. Increasingly they looked to primary health care, the use of semiskilled workers based in the community, and collaboration between different sectors, agriculture, water, sanitation and education. In September 1978 the World Health Organization (WHO) and UNICEF called a conference at Alma-Ata in the USSR. Its declaration stressed that primary care was the route to Health For All; this was thought achievable by the year 2000 and at affordable cost.

Consensus management had been criticised for its managerial slowness but the Royal Commission (1979)[13] had explicitly rejected general (as opposed to consensus) management in the NHS.  This was contradicted only two years later in an influential government-sponsored report (1983)[14] by a leading businessman, Sir Roy Griffiths of Sainsbury's. General management was introduced in 1984, encouraging:

• one individual at every level of an 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.

Audit and Performance indicators

Closer examination of professional activity followed international concern about rising costs. Audit of the results of anaesthesia and surgery was introduced. The tension between increasing demand and finite resources prompted new 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.  A process of merger of hospitals and medical schools in London began.

Community care

Clinical advances placed increasing demands on nursing and medical staff. 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             

The consumer society was taking off.  Long haul holidays, increasing reliance on consumer credit and the advent of Sky satellite TV (1989) reflected our changing expectations.  Yet the fifth decade opened with widespread uneasiness about the NHS.  Younger people were cynical about whether they could rely on the NHS; older ones thought that many things had been better in the past. 

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 trusts.  The wider problems of the country’s health were considered in The Health of the Nation[16]  published in 1991 which set out diseases and conditions that might be helped by health promotion in the NHS.

GP fund holders

Many family doctors were given budgets with which to buy health care from NHS trusts (and also from the private sector) in a scheme called GP fund holding. Each year more and more GPs joined.  Those who did not have their own budgets had services purchased for them by health authorities that 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. Supporters said fundholding saved money and was more efficient.  

Labour in power again

In May 1997 Labour came back to power.  Observers credited 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 Labour government began to change things, pledging the abolition of the internal market.  Though it said it would build on what had worked but discard what had failed, in the event 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[17], suggested that the service would be based on partnership and driven by performance.  Once more there were attempts to improve matters by changing structure.

1998 – 2007

The most recent decade, in which the NHS has been controlled by Labour throughout, has been one of the most eventful.  The country saw a boom in the property and financial markets and later the debacle of Northern Rock, a pension crisis and a swing in political popularity.  The accession of new countries to the European Community was followed by substantial immigration.
The increasing capacity of curative medicine, the availability of more and more expensive drugs for the control of cancer and AIDS, and the developments in psychiatry in the community added to costs.  The spectre of the rationing of care was never far from the surface internationally, not just in the UK. Pharmaceutical bills soared.  Imaging and non-invasive surgery continued to improve and genetic medicine was said to promise a future of personalised treatment. 

Labour introduced new systems of regulation. The National Institute for Clinical Excellence assessed the cost-effectiveness of new drugs and technologies.  The Healthcare Commission looked at the quality, governance and financial management of trusts. Bristol and Shipman were followed by a tightening of professional regulation. There was a drive for ‘modernisation’, changing skill mix and looking at effective ‘clinical pathways’ to increase capacity and reduce hospital waiting lists.
Early in the decade the NHS showed signs of becoming an electoral liability and after a commitment in 2000 by Tony Blair on Frost on Sunday (the most expensive breakfast in British history) the growth rate of the NHS increased substantially for five years.  A report[19] by Derek Wanless underpinned the recognition that the NHS was, by the standards of the developed world, grossly under resourced.  A major expansion of training for doctors and nurses, and the establishment of new medical schools followed.  However mistakes in the negotiation of contracts, particularly with GPs and consultants, added to the pressure on funds and led to a temporary financial crisis. 

The money helped the implementation of the NHS Plan, four principles of which were

• A patient-focussed service (patient choice, an expanding independent sector and providing extra capacity)

• Competitive providers, giving hospitals and GPs incentives to change (Payment by results, money following patients, the prospect of "failure")

• Active purchasers - giving PCTs purchasing power and practice-based commissioning)

• Cost effectiveness and affordability, (tariffs, legal contracts and commissioning)

The NHS had become a service provided to all without payment, but the provision was no longer necessarily by a publicly owned infrastructure. Labour achieved a change that, had it been attempted by the Conservatives, would have faced immense opposition.  Private sector organisations came to build and operate hospitals under the public/private partnerships, and to run clinical services such as Independent Treatment Centres and some NHS Walk-in Centres.  "Contestability" - the introduction of competition between providers - became significant.  Private practice was now an important part of a new and more sophisticated market.  Labour's traditional desire to look at health care from a community and public health perspective led to policies on these topics rather than achievements (with the exception of a ban on smoking in public places).  The decade ended as it had begun with reviews, Lord Darzi's of the services in London [20] and related reviews of the other SHAs.  Quality was now being made central to NHS development, amid fears that the world wide economic downturn would have a substantial effect on the NHS.

2008- 2017