THE SUNDAY TELEGRAPH – 06 March 1994
The shortest way to ruin a health service
Dr James Le Fanu, medical correspondent, says the NHS reforms are a disaster.
“TALES of expense fiddling, malpractice, political patronage and managerial featherbedding", is how the Economist has described the miasma of scandal that seems to be enveloping the newly reformed National Health Service.
Virginia Bottomley, the Secretary of State for Health, seems unperturbed. Indeed she confidently told the Commons that the NHS reforms were enlightened – "a great journey that must go on".
Luckily for Mrs Bottomley the intricacy of health service administration is an arcane, frankly tedious subject, so few people really understand what is going on or whether her optimism is justified.
The graph that accompanies this article provides the key to that understanding, revealing a breathtaking increase in the number of NHS general and senior managers from 510 in 1986 to 13,308 in 1991. To grasp its true significance one must first look at the pre-reformed NHS – paying particular attention as to why it provided the best value for money of any health service in the Western world.
First the NHS had some unique attributes. As a truly national service enjoying the loyalty of the public, it provided a source of social cohesion; it was open to all and free at the time of use; and it embodied a sort of institutional wisdom antipathetic to frivolous innovation.
These attributes elicited a sense of dedication from those who worked within it – nurses, physicians and technicians who put up with long hours for little pay.
The NHS’s administrative structure was very simple. Expenditure, tightly controlled by the Treasury, percolated down to hospitals and general practitioners. The judgment of doctors, required by the charters of their royal colleges to maintain standards, ensured money was spent to best advantage. Health experts from elsewhere marvelled at how this system enabled the NHS to deliver more services per million of pounds spent than that of any other country.
For political reasons the Conservatives in 1988 initiated a series of revolutionary changes. The cry went up that the NHS was inefficient, it lacked, in the words of the then Minister of Health, Kenneth Clarke, "the qualities of competition, choice and measurement of quality to be found in private industry". And so competitive it would become. It was to be atomised into separate "independent" units which were meant to compete furiously with each other. The internal market in health was born, bringing in its wake apparently unanticipated waves of bureaucratisation.
First every managerial function had to be replicated several times over. The health authority manager in charge of mental health, for example, remained in place – having become a "purchaser" of services. But he now had to have a counterpart in each hospital with whom to negotiate the "provision" of such services. In a market everyone must know the precise cost of everything lest they undercharge, and collecting this information required a vast tranche of auditors.
Next a new class of managers was created to negotiate, draw up contracts and ensure they were carried out. Finally this new managerial culture required the trappings of private enterprise not seen before in the National Health Service – personal assistants, public relations officers and the like. In 1986 the 416-bed St Richard’s Hospital in Chichester was managed by a staff of six; by November 1993 this had risen to 54.
The implementation costs of this internal market are said to be between #2-3 billion and recurring costs around #5 million. Whereas the administrative costs of the NHS had run at about 5 per cent of the total they are now running at around 10 per cent, making them similar to those found in other European countries.
But according to Mrs Bottomley it has all been worthwhile because more patients are being treated than ever, there are more cataract operations, more heart bypasses. Her optimism is disputed by the first independent academic study of the reforms, published last week by the King’s Fund Institute. Professor Julian le Grand of the London School of Economics points out that the Treasury sanctioned a massive increase in funding of around 12 per cent over the two years 1991-1993 compared to 1 per cent growth a year that had prevailed throughout the 1980s. "With resource changes of this magnitude," he says, "it would have been very surprising indeed if there had not been a significant increase in hospital activity regardless of the reforms". The overall verdict reached in a concluding chapter of the same book (where the new NHS is assessed on the basis of the five criteria of quality, efficiency, choice, responsiveness and equity) is that there has been "little actual change of any kind".
This seems a charitable view. Choice has been severely restricted. I used to be able to refer patients to any specialist in the country; now they can only go to a limited number of hospitals and an expert opinion for an obscure condition can only be obtained by special permission. Equity has been overthrown, as patients lucky enough to have fund-holding general practitioners – and who incidentally are overwhelmingly middle-class – can, thanks to preferential funding, jump hospital queues, getting hips repaired in eight weeks rather than eight months.
A bribery culture has evolved in which doctors are seduced by financial inducements allowing them to hire staff or obtain "free computers". Indeed the reforms have become notorious for an absence of financial responsibility – £70 million has been spent by Trust hospitals advertising their new status; the NHS car bill leaps from £53 to £70 million; and two managers from Worcester Royal Infirmary see nothing odd in travelling to the US together on Concorde on an £8,500 two-week round trip.
Some things have got better. The telephone system at my local hospital is markedly improved. But this is more than offset by what can only be described as a culture of ignorance. The blitzkrieg of this demanagerial class has displaced those whose had an intimate knowledge of the NHS.
Despite the rhetoric with which the reforms were introduced – "competition, choice, independence" – they can almost be defined by their antipathy to conservative principles: trying to fix something that was not broken with an untested theory of an internal market in health borrowed from an American academic. I do not know what is more astonishing: that Mrs Bottomley should describe this as "a great journey that must go on" or that her colleagues in Cabinet should be taken in by her.
Copyright: Telegraph Group Ltd