I)ate MICHIGAN STAT V RS UBRARI m ”3 l 1112!! 9: 3H glutnunWWI/mutant LIBRARY 1417 2138 Michigan State University This is to certify that the thesis entitled SOCIAL JUSTICE AND HEALTH CARE POLICY: THE NATIONAL HEALTH SERVICE (U. K.), 19146-1990 presented by Paul Kendel Haynes has been accepted towards fulfillment of the requirements for M.A. degree in Health 8 Humanities firfiée; MM— Major pressor June 7, 1995 0-7639 MS U is an Affirmative Action/Equal Opportunity Institution PLACE IN RETURN BOX to remove thle checkout from your record. To AVOID FINES return on or before dete due. DATE DUE DATE DUE DATE DUE MSU Is An Afflrmettve Action/Equal Opportunny Inetltulon Wales-M SOCIAL JUSTICE AND HEALTH CARE POLICY: THE NATIONAL HEALTH SERVICE (U. K.), 1946-1990 BY Paul Kendel Haynes A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of MASTER OF ARTS Interdisciplinary Programs in Health and Humanities 1 995 ABSTRACT SOCIAL JUSTICE AND HEALTH CARE POLICY: THE NATIONAL HEALTH SERVICE (U. K.), 1946-1990 By Paul Kendel Haynes The organizing principles underlying the foundation of the British National Health Service (NHS) are more collectivist than liberal. A market-oriented libertarian conception of social justice remained the dominant conviction in British society until well into the twentieth century. During World War II, however, an egalitarian conception of social justice became increasingly prevalent during the collectivist response to the war. The 1948 NHS is a product of this parallel shift-~historical and philosophical; it reflected the egalitarian values and collectivist framework of the war. But as wartime memories faded, traditional British liberal values strengthened again. The 1990 National Health Service and Community Care Act represents a resurgence of individualistic, libertarian values connected to this historical liberal tradition. Copyright by PAUL KENDEL HAYNES 1995 ACKNOWLEDGMENTS I wish to acknowledge the advice and assistance I have received in the preparation of this thesis. Judy Andre and Tom Tomlinson offered helpful criticism during a presentation of the thesis. Libby Bogdan-Lovis kindly provided a thorough and thoughtful editing. Special gratitude is offered to my committee members, Len Fleck and Gerry Osborn, for their direction and advice. Their helpful insights allowed for substantial progress on this thesis. My thesis director, Peter Vinten-Johansen, has supervised this thesis since its inception. His support and encouragement are unparalleled in my experience. The quality of this thesis is largely a reflection of his scholarly contributions. The wealth of experience gained through our relationship in this endeavor has been my greatest reward. I received financial assistance throughout my graduate study at Michigan State University. I am grateful for a Interdisciplinary Programs in Health and Humanities research assistantship, as well as the teaching assistantships provided by both the Center for Integrative Studies in Arts and Humanities and the Department of Teacher Education in the College of Education. In addition, a College of Arts and Letters fellowship permitted extensive work over the summer of 1995. Finally, I must acknowledge the ceaseless compassion of my family. Their continuous support and encouragement allowed me to achieve this goal. iv PREFACE The British National Health Service (NHS) has been an international model of a government administered, tax financed health service. Since its implementation in 1948, the NHS has successfully provided quality, comprehensive, universal health care services. i/ln many respects the accomplishments of the NHS over its forty years of service are meritorious.” However, its method in achieving such a goal is the subject of debate. Advocates of the NHS extol both its equity and economy, whereas opponents denounce its insensitivity to patient preference and its administrative inertia. At the center of the debate is the organization of the NHS. The original NHS was organized by policy makers who valued rational, bureaucratic paternalism and were motivated out of an egalitarian, collectivist conception of social justice.1 Recent reforms have altered this founding organization of the NHS. In a reflection of the trend in western liberal democracies of replacing a professional definition of efficiency and cost effectiveness in health care with a corporate definition, British Conservatives have introduced fiscal ‘ management and competition into all government services, including the NHS. I spent the summer of 1993 in London, studying medical ethics and the history of health care at the Medical College of St. Bartholomew's Hospital. After an overview of the history and V functioning of the NHS, we focused on understanding the motivations and ramifications of the 1990 National Health Service and Community Care Act. This Act, implemented by the Conservative Party, sought to incorporate market strategies, especially competition, into the existing framework of the NHS. Ii was struck by the irony of traveling to Great Britain to learn how an industrialized nation had developed a health service that had provided universal, equitable, comprehensive, affordable health care for more than forty years, only to find that the current government had decided to emulate a US. model of managed competition. What had motivated a government service, providing the entire British population quality health care at just greater than six percent of its gross national product, to adopt strategies similar to some found in the United States, where universal access remains elusive despite twice the expenditure?2 According to the British Conservatives, the traditional NHS was incapable of controlling the rise in health care costs that have affected all industrialized societies. However, this explanation is (incomplete. Although the escalating cost of providing high technology medicine may have demanded a reevaluation of NHS policies, the most recent reform represents a shift in principles and conception of justice extending far beyond cost factors alone. While the rising cost of providing health care in Britain was a major impetus behind the 1990 reform, the nature of the reforms are a product of rejuvenated British liberalism. On a hypothetical historical continuum, British institutions were generally structured according to precepts of classical v i liberalism from the end of the seventeenth century to the turn of the twentieth.3 In the late nineteenth century, however, advocates of socialist collectivism (the opposite pole on the continuum from liberalism) began making persuasive claims for the incorporation of its principles in British institutions, including health care delivery. +Experiences during two world wars highlighted the tension between these contradicting worldviews. The organizing principles underlying the foundation of the NHS in 1948 were more collectivist than liberal. These two worldviews have parallel philosophies of social justice. On a parallel continuum, a market-oriented libertarian conception remained dominant in British society until well into the twentieth century.4 During World War II, however, an egalitarian conception of social justice becawincreasingly prevalentaduring-athecollectivist response to the war. The 1948 NHS is a product of this parallel shift--historical and philosophical;-..it refle‘ctedegalitarian values and a collectivist framework. However, as wartime memories faded, traditional British liberal values strengthened_again. Consequently, the 1990 reforms of the NHS represent a resurgence of individualistic, libertarian values connected to the historical liberal tradition. TABLE OF CONTENTS Introduction ......................................................................................................... 1 1. The 1990 Reform: Liberalizing the NHS ............................................. 7 2. The Original NHS in a Collectivist State .......................................... 18 3. The Liberal Tradition in British Health Care .................................. 28 Epnogue ................................................................................................................ 44 Endnotes ............................................................................................................... 46 Bibliography ........................................................................................................ 49 viii INTRODUCTION Much of the scholarly literature on the 1990 National Health Service and Community Care Act--the most recent Conservative Party reform of the British National Health Service (NHS)--tenders financial explanations. Health care costs have risen over the past few decades well in excess of general inflation. In order to maintain expenditure at a reasonable proportion of gross national product, however, successive governments have underfunded the NHS. As a result, hospital construction programs have been postponed indefinitely, capital equipment acquisition digressed, and health care rationing by waiting list at the point of delivery had become typical in many health districts. Since the early 1980s, wealthy patients have jumped the queue by purchasing health services themselves (increasingly funded by private health insurance). The Thatcher government that assumed power in 1979 claimed they had received a mandate to apply competitive market principles to a variety of social problems. Once the financing of the NHS was defined a social problem, its reform was a consequence of the Conservative assumption that the marketplace could improve the quality of medical care, correct deficiencies in access, and control rising health care costs. For example, David Hunter argues that a design to improve management was the principal solution for the perceived health care 2 crisis in the 19803. The introduction of general management techniques to the NHS was expected to remove inefficiency and contain costs. According to this line of reasoning, the 1990 reform was a natural expansion in management regulation in the clinical services (Hunter 1991). Patricia Day and Rudolf Klein also explain the 1990 reforms as a conscious replacement of rational, bureaucratic paternalism in the NHS by managerial values of efficiency and effectiveness. The reform sought to ”strengthen the managerial grip over the NHS and thus challenge the British definition of medical autonomy as meaning immunity from scrutiny" (Day and Klein 1989, 3). A corollary argument was that the 1990 reforms were necessary to rectify variations in medical efficiency and clinical practice under the original organization of the NHS. In an attempt to address these vagaries, the 1990 reforms assumed that competitive market forces would create incentives for providers to utilize resources only to the extent to which they are needed at the local level, resulting in increased efficiency and patient satisfaction (Culyer and Meads 1992). But the 1990 Act goes far beyond the structural and organizational tinvkering that characterized past reforms; it redefined the principles of social justice underlying the British health service, focusing on individuals rather than the nation, on capitalist rather than collectivist methods. In short, 1990 NHS reforms represent the application of traditional British liberalism to the health care sector. The philosophy of social justice focuses on the kinds of obligations that individuals believe they owe to other members in a community. Notions of obligation and community tend to fall somewhere on a continuum: from community as an aggregate of autonomous individuals (classical liberalism) to community as an organic combination of equal and interdependent individuals (collectivism). The NHS created in the 19405 reflected the collectivist principles of social justice developed by a people during wartime. The sense of solidarity and mutual obligation forged on the battlefield and on the homefront would infuse the health service that followed the war. The wartime experience imbued a belief that health care provision should be universal, comprehensive, and egalitarian. The Coalition government produced a White Paper entitled, A National Health Service, that emphasized two collectivist principles: the future British health service should be open to all and free at the point of entry. Every man and woman and child can rely on getting all the advice and treatment and care they need . . . What they get shall be the best medical and other facilities available . . . Their getting these shall not depend on whether they can pay for them, or on any other factor irrelevant to the real need--the real need being to bring the country's full resources to bear upon reducing ill-health and promoting good health in all its citizens (U. K. 1944). In the 1940s, therefore, health care was viewed by policy makers as a social need, payment for which would be shaped by the community, 4 equitable provision guaranteed by law and regulated by political representation. In an egalitarian conception of social justice, both beneficence and respect for autonomy are seen as naturally connected communal values. Beneficence is an expression of communal obligation to secure for each member positive access to the necessities of life (Loewy 1991, 110). In a largely egalitarian conception of a health care service, access to health care of relative equality would be an essential element of full participation in community opportunities. The assumption is that our state of health determines, in part, our ability to pursue opportunities ostensibly available to everyone in the community. Illness and disease are barriers to this egalitarian pursuit of opportunity. Thus, access to the equitable provision of health care is considered a community obligation to its members. The impetus for extending this sense of social obligation to the creation of the NHS was the collectivist experience of World War II. The atmosphere of the war affected every aspect of life. Values and priorities in British life were altered from their traditional libertarian course. Each member of society was charged with contributing to the war effort. Both preparation for and waging the war itself became a collective effort; in addition, risk and trauma were often shared. The imposition of a graduated income tax, the extent of war losses, and the rationing of food, clothing, shelter, and amusement tended to level many disparities in British society. The experience of World War II became the paradigm of a collectivist ethic in Britain. 5 One consequence of the war experience was a general belief that the country should expand social services to care for the less fortunate. A large percentage of the immediate post-war British public expected that the cooperative involvement of society under the direction of the government would continue during reconstruction (Hennessy 1993). Out of this prevailing attitude emerged the 1942 Beveridge report, i I In r n nd Alli Ser_v_i_c§_$_, as the plan for a collectivist reconstruction of British society after the war; it was a comprehensive plan to remove the five major impediments to social progress: disease, ignorance, squalor, idleness, and want (UK 1942, 6). The National Health Service was an outgrowth of British collectivist reconstruction fervor. It manifested a collectivist effort to provide comprehensive, universal health care. However, libertarian values strengthened in the years following the foundation of the NHS as the memory of war gradually receded. Both the pressure of rising health care costs and the challenge of providing coordinated health care services during the 19605 and 19703 were attacked by increasingly libertarian methods: government review committees introduced corporate management planning and organization, added competition among health care providers, increased administrative accountability while decreasing centralized control. Even before the Conservatives were in a position to undertake reforms, the NHS had already begun a shift from a collectivist service to a corporate system for delivering individualistic health care. In the late 1980s, however, policy makers viewed the NHS through liberal lenses: precedence of individual choice over social 6 welfare and management of health care in a system guided by free- trade principles. Although the architects of these liberal reforms emphasize that they have not retreated from the initial commitment to a national health service, their conception of social justice is no longer collectivist. The modern NHS is shifting away from an egalitarian, collectivist conception of justice to a market-oriented, libertarian conception of justice. This movement of the NHS along the continuum of social justice has policy implications for the NHS. Although the 1990 reformers of the NHS insist that the original goals-comprehensive universal health care--remained unchanged, libertarian principles of social justice mean, at a minimum, that provision will be altered and that social expectations may have to change. Justice in a libertarian community rests on the autonomous decisions of individuals. Freedom and the right to exercise individual autonomy are understood as fundamental rights, justly limited only when the exercise of autonomy directly interferes with the autonomy of another member of the community. Social obligations are largely contractual, freely entered, and explicitly limited. Individuals attain their true potential only through freedom of access and choice of goods and services (Loewy 1991, 116). Thus the market place is conceived as shaping and perhaps creating an aggregate public morality. A strong libertarian philosophy allows for relatively few beneficent health care obligations. 1 The 1990 Reform: Liberalizing the NHS More than forty years after inauguration of the National Health Service, the Conservative Party reformed health care delivery in the NHS with the passage of the National Health Service and Community Care Bill (U. K. House of Commons 1989, vol. 4). This reform embodies a paradox. While it reaffirmed the special status of the NHS as a tax-financed, universal, free at the point of delivery health service, it expanded corporate management principles in all sectors and introduced a competitive market among purchasers and providers of health services. The principle justification for these changes was to control health care spending, but objectives of the 1990 reforms exceed beyond cost containment. Other objectives were to give patients some choice among available services and to increase the satisfaction and financial rewards of health providers who successfully respond to local needs and preferences. The 1990 Act essentially codified recommendations from the Government review of the NHS, which first became available to public scrutiny as a White Paper, entitled Werking fer Petiente (U. K. 1989). This review was initiated to counter a widespread perception that the Conservatives were underfunding health services (Lister 1989). Werking fer Petiente pointed out that since the Conservative Party assumed power in 1979 funding of the NHS had 7 8 actually increased. If this trend continued, argued the authors of the White Paper, other important services would have to be neglected or taxes raised dramatically. With Margaret Thatcher's encouragement, the Conservatives decided on a third option: cap funding at current levels and establish internal controls on escalating health expenditures. The delivery of modern, high-technology medical care was becoming fiscally problematical in many countries, not just the United Kingdom, so the Government consulted both outsiders (especially U.S. academics) and insiders (particularly district health managers). But as government ministers probed the financial crisis in the NHS, they realized the existing administrative structure lacked the means to assess adequacy, need, or quality of health care. Consequently, Werking fer Petiente recommended the development of assessment measures of all NHS services (called 'outputs"). The White Paper also suggested that current levels of health service funding were probably sufficient to meet the needs of the population, if eventual reforms emphasize management controls of NHS outputs to eliminate wasteful spending and reduce inefficiencies. Werking fer Petiente recommended the NHS should be more accountable for public moneys spent in the British health service-- a recommendation that was a centerpiece of the enabling legislation, the 1990 Act itself.5 The Government has maintained that one of the signal contributions of this reform policy has been the introduction of cost assessment to the NHS. Previously, NHS managers could not measure the specific costs of various health services provided; all one could establish was the total budgetary 9 cost of operating the health service. For example, NHS hospitals could not determine accurately the cost of heart bypass surgery because funding was allocated to each hospital as block grants. No one was expected to record the factors necessary in calculating the cost of the procedure (the number of procedures performed by whom, involving how many hours, the supplies utilized, etc.). The Government believed that under such circumstances the NHS was shielding hospitals from confronting the actual cost of health care utilization, thereby encouraging cost inflation rather than cost controls. The government maintained that when the cost of specific NHS outputs were known, an enhanced business style management of the NHS would improve efficiency enough to keep pace with general inflation for several years to come. But the Conservatives believed that making the NHS more efficient was not sufficient to control costs for the long term; other market principles, especially competition, must be introduced in the NHS to limit public funding. Since the Tories' review had uncovered duplication of services in the NHS, competition was proposed to eliminate it. Patient satisfaction was an integral component in this scheme; health care providers unable to meet patient needs in a competitive environment would lose the coverage provided by the NHS funding umbrella if patients were permitted to choose with their feet. Providers losing patients would have to shape up (offer services satisfactory to patients) or gradually go private-~the later so unlikely a prospect for general practitioners (GPs) that the Government was certain that competition would reduce much of the unnecessary spending in the health service. 10 The reform of the NHS by the Conservatives was part of a larger agenda to dismantle the post-World War II British welfare state and substitute liberal policies and institutions (Cavanagh 1987). Since 1977, the Government has sold off the following nationalized industries: British Telecom, British Petroleum, British Steel, Rolls-Royce, British Gas, British Aerospace, British Airways, the British Airports Authority, National Freight, and the Water Authorities. After the second successful general election victory, the Tories assumed a mandate that the British people had tired of post-war collectivism. The Tories championed the liberal themes of free market individualism and popular sovereignty. The lack of a national sense of the individual was identified as ”the core British problem” (Haseler 1989, 67). The individual must be freed from an over-idealized notion of community. The individual as an active, responsible citizen is central to the proper role of government. Power should flow upwards from the sovereign citizen, not downwards from a sanctified authority. In the 19803, the Government replaced centralized, hierarchical, top-down models of organization with decentralized, autonomous institutions. Their assumption is that a free market is more responsive to customer (and patient) demands than national bureaucracies. They also believe that the modern competitive market has lost the cruel edge that in past decades supported egalitarian motivations to insulate the workers from the vagaries of free trade. The welfare state had run amok, reasoned the Tories, levels of taxation had become too burdensome and infringements on personal liberty too extensive. In their place, the Government 1 1 proposed new policies based on traditional liberal values: competition, individual ownership, consumer satisfaction, and managerial control3-- throughout British society, including the NHS. The enhancement of market principles in the 1990 reforms shifted the NHS toward the libertarian pole on the social justice continuum. The libertarian notion of social justice gives priority to individual freedom of choice, autonomy, and liberty; its major restriction is that individuals must not interfere with the legitimate liberties of other individuals (Narveson 1988, 7). Moreover, the marketplace is considered an optimal sphere because it recognizes private property rights; and personal freedom of choice. As such, competitive markets reinforce, perhaps even create, libertarian values. According to these criteria, the Conservative reform of the NHS contains a libertarian conception of social justice. Liberties are offered to patients and providers; patients have wider choice among providers, and the latter have a host of new incentives to attract patients and greater freedom in the services they offer. In addition, any restrictions on such freedom and autonomy will require the consent of both parties. In order to meet the objective of providing greater satisfaction and rewards for NHS personnel who successfully responded to local needs and preferences, the Government drastically changed the operation of hospitals and general practices. Broad freedom would be given to hospitals that established self- 12 governing trusts. The creation of trusts was intended to provide hospitals with greater responsibility for their own affairs, since hospital trusts would independently manage all health services they provided and earn revenue from the provision of those services. Hospital trusts also have the freedom to set pay rates for their own staff and borrow money to expand services--in competition with other hospital trusts seeking referrals from general practitioners. General practice clinics were encouraged to consolidate and reorganize as fundholding practices that would purchase hospital services in a newly created market within the NHS. That is, GPs in large practices were given the freedom to leave their District Health Authority and become an autonomous fundholding practice. Such practices received their own budgets to purchase defined services from hospitals, either within the NHS or in the private health care sector. Fundholding GPs were also given an incentive to keep their health care costs down because they had to compete with other fundholders for the services provided by the hospital trusts and the private hospitals. Funds remaining in their assigned budgets at the end of the fiscal year could be used to improve their practice by creating additional preventive health care initiatives and/or by NHS approved capital improvements to the practice. Fundholding was one measure adopted by the Government to control GP expenditures; the other was the Family Practitioner Committee (FPC), which would approve the quality and quantity of GP services (U. K. 1989, 61). Simply put, the Government would not accept "inexplicable variations in the rate at which different GPs prescribed and referred--a range of 20 to one" (Day and Klein 1989, 13 19). In addition, the 1990 reform increased patient choice of providers. "Patients should be quite free to choose and change their doctor without any hindrance at all.” (U. K. 1989, 55). Increased demands from patients meant competition for GPs, who must offer better services in order to attract and retain patients. A competitive scheme would also force hospitals to improve services in line with patient preferences and to tailor their services to GP fundholder needs. "The relationships which GPs have with both patients and hospitals make them uniquely placed to improve patients' choice of good quality services” (U. K. 1989, 48). These changes effected a shift in the revenue flow within the NHS. Prior to 1990, revenue moved from Health Authorities to hospitals and GP practices in a top-down fashion. In the recently reformed NHS, revenue follows patients from GP fundholder practices via referrals to hospital trusts in a bottom-up fashion. Connecting revenue to competitive market principles was intended to improve the incentives for quality patient care: Hospitals and consultants need a stronger incentive to look on GPs as people whose confidence they must gain if patientsare to be referred to them . . . GPs themselves lack incentives to offer their patients a choice of hospital. To help tackle these problems in a way that builds on the strong foundations of the family doctor service, the Government will introduce a new scheme for enabling money to flow with the patient from the GP practice itself. Both GPs and hospitals will have a real incentive to put patients first. The Government believes that this reform will deliver better care for patients, shorter waiting times, and a better value for money (U. K. 1989, 48). 14 In a national health service, reformed to highlight a libertarian notion of social justice, autonomous health care providers are given financial incentives to put patients first. In an implicit fulfillment of these concerns, the reforms allow money to cross administrative boundaries. Health care provision is no longer contained within the District Health Authorities, and both the hospitals and the GP fundholders can offer or purchase services from private sector enterprises. The Government does not view the private sector in health care as a challenge to social equity and fairness; instead, privatization is considered advantageous to a public health service: The NHS and the independent health sector should be able to learn from each other, to support each other, and to provide services for each other. Anyone needing treatment can only benefit from such a development. People who choose to buy health care outside the Health Service benefit the community by taking pressure off the Service and add to the diversity of provision and choice. The Government expects to see further increases in the number of people wishing to make private provision for health care (U. K. 1989, 8-9). For the Conservatives, free choice is a preeminent social value. In their minds, diversity in provision and choice is no impediment to the universal delivery of health care of equal quality. There have been dissenting views, however. In the December 7, 1989 Times (London), the former Labor secretary of state for health and social services, Lord Ennals, argued that an unequal two-tier health service would result from these libertarian alterations in the NHS. Ennals particularly opposed the establishment of self- 1 5 governing, hospital trusts on the grounds that, over time, disparities would emerge similar to those that the NHS was enacted to overcome in the 19403. Ennals' concern has substance beyond political grousing. The following scenario is possible in the reformed NHS: A fundholding GP practice located in an affluent socioeconomic area of Great Britain could be dominated by patients in relative good health; if so, the practice could enjoy an advantage in the competitive internal market of the NHS. For example, the fundholding practice would have less difficulty in reaching NHS preventive medicine targets and remain well within the fundholding practice budget. Unused funds could be channeled into capital investments leading to future improvements in patient care. In comparison, a GP fundholding practice located in a multi-ethnic, economically deprived environment might contend with a patient list where poor health and social problems would result in the likelihood of significant disadvantages in the competitive market of the NHS. This category of GP remaining within its fundholding budget is lower than the affluent practice, as is the probability that any funds would remain for making capital improvements. The outcome of such a scenario, extended over time and space, could be the emergence of inequitable Ievels--in range and quality--of health care delivery in the NHS. That is, there is a danger that the competitive environment of the reformed NHS will force GPs to become ”resource-oriented rather than patient-oriented” (Green 1992, 79). If so, affluent patients will leave disadvantaged GP practices and enter the private health care sector, thereby accentuating the disparities within a 16 market-oriented health service until the NHS cares primarily for the impoverished and private health care for the wealthy. The 1990 reforms established a clear division between political representation and managerial function in the NHS. In order to tighten managerial control over the service, a NHS Policy Board, chaired by the secretary of state, was created within the Department of Health itself. The role of the Policy Board is to determine strategy and set objectives. A management executive was placed on the Policy Board in order to address all operational matters of the service. In addition, the Regional and District Health Authorities (responsible for hospital and community services) and the Family Practitioner Committees (responsible for primary health care) have become managerial bodies. Membership on health authorities should be determined ”exclusively on the basis of the 'skills and experience they can bring' to the task of management” (Day and Klein 1989, 4). This is a reflection of the Conservative desire to control spending through improved management. According to, Werking fer Eetiente, ”If the NHS is to provide the best service it can for its patients, it must make the best use of the resources available to it. The quest for value for money must be an essential element in its work . . ." (U. K. 1989, 7). Again, one sees the influence of libertarian values behind the Conservative reforms: decision-making is an aggregate of individual deliberations by local 1 7 managers, without guaranteed involvement by the patient, community or professional groups. The reason may be that the Government's primary goal is to make the NHS an economically viable institution. To promote efficient use of scarce resources, general practitioners and hospital consultants must submit all expenditures to peer review audits. Remedial action, if any, is to be taken by management, which may initiate independent audits. The outcome of clinical audits may be used to renegotiate hospital consultant contracts, the percentage of time consultants devote to the NHS. Distinction awards, which can double a consultant's NHS income, came to depend on conformance with Conservative expectations: ”The Government proposes . . . to modify the criteria for awards so that in the future consultants must demonstrate not only their clinical skills but also a commitment to the management and development of the service” (U. K. 1989, 43-44). Prior to the 1990 reform, distinction awards were determined by an independent medical committee, employing professional definitions of merit. After the reforms, the awards committees must include substantial managerial representation. This change in the criteria for distinction awards is symptomatic of a broader shift in the determination of what constitutes quality medical care. The Conservatives have forced the medical profession to change their definition of meritorious service to include managerial and corporate elements in order to facilitate hospital trust competition. 2 The original NHS in a collectivist state Since the Conservatives claim that the 1990 reforms enhanced (rather than gutted) the health service, we need to examine the context, the founding principles, and the organizational framework of the original NHS. World War II was a major impetus to the expansion of state involvement in health care delivery. The Conservative minister, Anthony Eden, wrote that "the war exposed [domestic] weakness ruthlessly and brutally . . . which called for revolutionary changes in the economic and social life of the country” (Titmuss 1950, 507). Early in the war, newspaper accounts of the poor health of many evacuated mothers and children pricked the conscience of the nation. Subsequent war experiences stimulated preposals for drastic changes in the delivery of health care long before victory was even envisioned. During five years of war, pressure for a higher standard of social welfare and an egalitarian conception of social justice gained strength. There emerged widespread feeling, wrote William Beveridge in November 1942, that ”a revolutionary moment in the world's history is a time for revolutions, not for patching” (U. K. 1942, 6). No longer did It tseem sufficient to provide a standard of service 'hithertd' considered appropriate for those in receipt of poor relief” (Titmuss 1950, 506). While relative few suffered from extreme poverty or disease, 18 19 German bombs did not discriminate between the rich and the poor. The government offered relief to both, and the major vehicle for this relief was the Emergency Medical Services (EMS). In order to coordinate a diverse range of services in anticipation of extensive civilian and military casualties, public and voluntary hospitals alike entered the EMS. Its guiding principles were “the pooling of resources and the sharing of risks" (Titmuss 1950, 507). The EMS introduced collectivism to British hospitals. Theteafter, many consultants personally confronted the inadequate services available in local authorities and smaller voluntary hospitals. Eventually, the Nuffield Provincial Hospital Trust, a voluntary group concerned with the quality and organization of hospital services, conducted regional hospital surveys (Ham 1985, 14). These surveys revealed widely disparate standards of hospital services throughout Britain, particularly in the distribution of beds and staff. It also considered the current organization of hospital services inadequate to meet patient needs. There was nothing revolutionary about this assessment. The Dawson Committee report (1919) had recommended a comprehensive reorganization of hospital and primary care; thereafter the Royal Commission on the National Health Insurance (1926), the Sankey Commission on Voluntary Hospitals (1937), and British Medical Association (BMA) meetings in 1930 and 1938 had emphasized that existing schemes for providing health care delivery should be changed. At the least, hospitals should coordinate services and a greater number of British citizens should have adequate health insurance. 20 These recommendations fell on deaf ears until the Government announced in 1941 its intention to develop a national hospital service at the end of the war. A committee was appointed, chaired by Sir William Beveridge, and charged to make a survey of ”existing national schemes of social insurance and allied services, including workmen's compensation, and to make recommendations” (Hennessy 1993, 72). Its report, Seeiel Inserenee ene Allied Servieee (1942) was a call-to-arms to better British society, a talisman of this Government's intentions to give a brave people the postwar rewards they deserves. The Beveridge report (as it came to be called) targeted the ”five giants on the road to reconstruction . . . Wan/t"r is . . . in some ways the easiest to attack. The others are DiseaSe, Ignorance, smelt}; and ldlenes‘s' (u. K. 1942, 6). In order to defeat all five giants, the report proposed the section of a comprehensive, social service state including: a free national health service, allowances for families with children, and the maintenance of full employment (U. K. 1942).5 Over 635, 000 copies of the Beveridge report were sold to the general public, placing it on par with best- selling works of fiction of the early 19403. A Gallup survey in 1943 revealed that nineteen out of twenty people had heard about the Beveridge report (Hennessy 1993, 73-76). Such enthusiasm for Beveridge's collectivist proposals continued during the early phase of postwar reconstruction. In 1946, Parliament approved a fundamental transformation of the organization and delivery of health care within a national service, the NHS. This new health care system would be established on the basis of five principles: egalitarian justice, collective 21 responsibility, comprehensive care, universal access, and professional autonomy. The 1946 NHS Act expected the NHS to institutionalize an egalitarian conception of social justice. All members of the health care system should have equal opportunities to access health services of the same range and quality. As Rudolf Klein put it, the NHS had an ”ethical imperative: its proclaimed aim is to achieve equity in the distribution and use of health care" (Klein 1983, vii). A central goal of the NHS was to make equality of health care a collective responsibility of the state. Aneurin Bevan, the Minister of Health in the Labour government that came to power in 1945, argued that a the hallmark of civilized society was complete confidence that everyone would be cared for if they became ill: Society becomes more wholesome, more serene, and spiritually healthier, if it knows that Its citizens have at the back of their consciousness, the knowledge that not only themselves, but all their fellows, have access, when ill to the best medical skills can provide (Allsop 1984, 12). Health care must be guaranteed by the centralized state, not left to the whims of the marketplace and accidents of privilege. ”A free Health Service”, insisted Bevan, ”is a triumphant example of the superiority of collective action and public initiative applied to a segment of society where commercial principles are seen at their worst" (Bevan 1952, 85). This vision of collective obligations to render equitable access to health care reflects an egalitarian notion of social justice. 22 The NHS also intended to provide comprehensive health care services. The Minister of Health was given the duty to ”promote a comprehensive health service for the improvement of the physical and mental health of the people . . . for the prevention, diagnosis and treatment of illness” (UK 1946, 4). The 1946 NHS Act nationalized the fragmented system of hospital care that had developed out of the nineteenth century. Furthermore, the NHS established a tripartite structure of comprehensive health care delivery. The components of care included: hospital, primary, prevention, education, and emergency health care services (UK 1946, 14-17). The NHS was mandated to provide comprehensive health services to every member of British society without consideration of their ability to pay; that is, access should be universal. Minister Bevan insisted in 1948, ”medical treatment and care . . . should be made available to rich and poo‘rij‘ialil‘te/ in accordance with medical need and by no other criteria” (uk. DHSS 1978, 1). Medical judgment rather than ability to pay should determine what health care was needed. According to a 1944 White Paper that preceded the actual legislation, the availability of necessary medical services shall not depend on whether peeple can afford to pay for them, or any other factor irrelevant to real need . . . to bring the country's full resources to bear upon reducing ill-health in all its citizens . . . money should not be allowed to stand in the way of providing advice, early diagnosis and speedy treatment (Allsop 1984, 16). The principle of universality meant the health service would be available without charge at the point of entry, whenever and wherever they were needed (Allsop 1984, 15-16). The NHS should 23 also be designed to ”secure a much better geographical distribution of general practitioners, of specialists, of dentists and of opticians" than existed before the war (U.K. DHSS 1978, 6). Health Minister Bevan argued in the House of Commons In April 1946, ”we have got to achieve as nearly as possible a uniform standard of service for all- only with a national service can the state ensure that an equally good service is available everywhere” (Allsop 1984, 16). In short, the NHS expected to eliminate disparity in the provision of health care in Britain. In fulfillment of the final founding principle, physicians were to retain their professional autonomy to protect their role as trained decision-makers. Bevan argued in April 1948: As I conceive it, the function of the Ministry of Health is to provide the medical profession with the best and most modern apparatus of medicine, and to enable them freely to use it, in accordance with their training for the benefit of the people of this country. Every doctor must be free to use that apparatus without interference from secular organizations (Allsop 1984, 17). Easier said than done, however. During the implementation phase of the NHS, Bevan had considerable difficulty preserving the other four principles against organized medicine's sense of professional autonomy. During the 1943 House of Lords debate on the medical services provision in the Beveridge report, Lords rising in opposition often 24 framed their arguments in terms of the liberal tradition. The central theme of Lord Derwent's opposition to the addition of medical provisions in the committee report was the ”attempt to sidetrack, or rather to bypass, as we now say, the liberty of the individual”. He was particularly concerned about the "dangers of excessive planning and State control" (U. K. 1943, 729). He feared general practice under government control would be “degraded to ‘penny in the slot' medicine“, and the medical profession would become the ”equivalent of a band of salaried functionaries, of what I hardly hesitate to call State lackeys" (734-736). The influence of liberal values can even be found in the speech delivered by Viscount Dawson of Penn, a committed advocate of a national health service. Regarding the proposal of a salaried medical service, Dawson said: . . . there is one part of the medical practice where you must have individualism. Where the doctor is dealing with a sick man there is a relationship that is peculiarly intimate. There is individual responsibility on one side and reliance and confidence on the other. Can it be supposed that these qualities would be as forthcoming from the State salaried doctor who arrives on duty at 9 am. and leaves at 6 pm. as from a doctor whose good work brings reputation, and later, maybe, material reward? (746) Dawson's colleague, Lord Geddes, rose in agreement, ”this is a country of individualists, and one of the really cherished relationships in countless homes is the relationship which exists between the family and the family doctor" (754). Lord Geddes‘ conclusion best illustrates the influence of liberal values in British health care: 25 [The doctor-patient relationship] is one of the great cherished possessions of British medicine and also one of the great possessions of the British public. I am certain that, with their individualist minds and characters, they intend to hold on to it and will not allow any Government to destroy that relationship (756). Lord Geddes highlighted the tension within the proposal of a national health service. The tension between the individualist minds and characters of the British public traditionally and the burgeoning «5 sense of a national collective will cultivated during the war. The NHS inaugurated on 5 July 1948 reflected the give and take of historical antecedents of health care delivery, the bargaining between enactment and implementation, and the sum of ”what was possible rather than what might have been desirable” (Ham 1985, 17). Its structure was tripartite, consisting of primary health care, various services managed by local authorities, and hospital care. An executive council administered primary care services provided by GPs, dentists, opticians, and pharmacists. Medical officers of health assigned to existing local authority committees were responsible for maternity and child welfare services, health visitors, midwives, health education, ambulance, vaccination and immunization. Most hospitals were nationalized and grouped as teaching and non- teaching entities. The distinctive status of teaching hospitals, administered by boards of governors, was a concession made by Bevan to gain support from elite members of the medical profession. 26 The majority of hospitals were administered by Regional Hospital Boards (RHBs), which appointed Hospital Management Committees (HMCs) for every non-teaching hospital. In order to launch the NHS, Bevan was forced to reconcile the tension between the lingering liberal values of the British public and libertarian-minded representatives of organized medicine. The National Health Service Bill was fiercely debated in Parliament and opposed by the medical profession. The Conservative Party opposed the Bill's plan to nationalize the hospitals and infringe on physician independence. These objections were outlined during Parliamentary debate: the Bill discourages voluntary effort and association; mutilates the structure of local government; dangerously increases ministerial power and patronage; appropriates trust funds and benefactions In contempt of the wishes of donors and subscribers; and undermines the freedom and independence of the medical profession to the detriment of the nation (Watkin 1978, 18). The Conservative Party was not alone in voicing reservations about the proposed national health service. The medical profession also shared these liberal views of the proposed health service. In a November 1945 letter to Minister Bevan from Dr. Charles Hill, deputy-secretary, the BMA outlined their fundamental principles from which there would be no concession: 1 In the public interest, the profession is opposed to any form of service leading directly or indirectly to the profession as a whole becoming whole-time salaried servants of the State or of local authorities. 27 2 The profession should be free to exercise its skills, the individual doctor being fully responsible for the care of his patient, with freedom of action, speech and publication, and no interference with his professional work. 3 The citizen should be free to choose his family doctor and (in consultation with that doctor) his hospital, and to choose whether to use the service or not. 4 Doctors should be free to choose their form and place of work without government of other direction . . . (Pater 1981, 112). In order to mediate this tension between the liberal values of the medical profession and the collectivism of the proposed national health service, Bevan was forced to make numerous concessions to the medical profession: distinct GP administration through Executive Councils, autonomous teaching hospital administration in the Board of Governors, the creation of distinction awards for hospital consultants, and the decision to allow the continuation of limited private practice. Bevan's concessions to the medical profession, although necessary, established a tension within the operation of the NHS. The fulfillment of the fifth founding principle of professional autonomy introduced a pressure in the service buttressed against the more collectivist-oriented principles of egalitarian justice, collective responsibility, comprehensive care, and universal access. 3 The Liberal Tradition in British Health Care The liberal values of British organized medicine--their desire for professional autonomy, their sense of social justice, and their belief in free competition--emerged in a context of fierce debate between ardent classical liberals and moderate reformers, beginning in the early nineteenth century. The argument that the state should occasionally intervene in public health matters to preserve individual liberty can be largely attributed to the influence of moderate Benthamites. Jeremy Bentham (1748-1832) was a classical liberal, utilitarian philosopher who argued for the greatest happiness of the greatest number. Yet, it was a philosophy strongly rooted in individual liberty. Bentham argued the burden of proof falls on those who wish to restrict the private pursuit of happiness. Benthamite reforms were free of a collective definition of the common good, and, in fact, his reforms consistently aimed at removing restrictions of individual freedom (Merquior 1991, 47-49). Benthamism entailed the strong classical liberal belief in non- interference or negative freedom. Yet, the nineteenth century public health crisis surrounding the recurring typhoid and cholera outbreaks raised serious questions for some liberals about the legitimacy of this position. 28 29 In a movement away from the classical liberal Benthamite position of negative freedom, moderate liberals, like John Stuart Mill and the Philosophical Radicals, advocated positive freedom; a limited conception of state intervention with the goal of maximizing personal liberty. The epidemics of typhoid and cholera obstructed personal liberty and, therefore, moderate state intervention was deemed appropriate. This moderation of classical liberal philosophy allowed for the first significant effort by the Government to improve the health of its citizens. In 1848, Parliament passed a Public Health Act. The objective of the Act was to enable the construction of water and sewerage facilities as a means to control the spread of infectious disease. Before the discovery of antibiotics, the medical profession was powerless against the epidemics of cholera and typhoid common to the period of the industrial revolution. The only recourse available to British society was improving living conditions through public health measures. However, the implementation of the 1848 Public Health Act required a lengthy struggle. Edwin Chadwick, Secretary to the Poor Law Commission and committed moderate Benthamite, was instrumental in preparing the Commission's 1842 Reeee ef an Iirinh nir iinfh rinPlinf Great Britain. The contents of the report coupled with the reoccurring outbreaks of cholera led to the passage of the Act. However, the implementation of the Act depended largely on the ”attitude of local interests” and the Act itself was "permissive rather than mandatory” (Ham 1985, 9). Only after thirty years of successful public health experience did a 1872 Act create sanitary 30 authorities who were obliged to provide public health services. In fact, the successful implementation of public health measures were largely a product of local political pressure and activities of health care providers at the local level.8 The best example of this tension between classical and moderate liberals in British liberalism is found in the hospital services. Two types of hospitals emerged during the nineteenth century in Great Britain: Poor Law workhouse infirmaries and voluntary hospitals.9 Voluntary hospitals relied on the charitable contributions of the benevolent rich. As medicine became more effective in treating acute illness, voluntary hospitals began focusing on the treatment of acute illness. Eventually nearly all care of chronic illness and infectious disease was confined to Poor Law workhouses. However these Poor Law workhouses were often overcrowded and unhygienic, in fulfillment of the Poor Law aim of deterrent. The "less eligibility principle" of the 1834 Poor Law Amendment Act ”depended on the creation of workhouse conditions so unattractive that they would discourage the working and sick poor from seeking relief“ (Ham 1985, 12). The 1834 Act also limited charitable relief provided to workhouses. Development of infirmaries separate from the workhouses did not occur until passage of the 1868 Poor Law Amendment Act. This Act, reflecting a moderate liberal position, represented the first explicit recognition of a state duty to provide hospitalization for the poor. The moderate liberal Lloyd George was instrumental in the passage of the first major government measure to address the general health care needs of the working class, the National 31 Insurance Act (1911). As the British industrial revolution forced families to become more dependent on the laborer for income to cover the costs of medical treatment, it became increasingly possible that an unforeseen illness could irreparably disrupt the family's steady source of income. The growth of industry created an economy dependent on a steady work force; consequently, illness began to affect the economy as a whole. Working class illness became a burden to employers by causing direct costs in lost production. In this context, Lloyd George was able to enact the 1911 National Insurance Act Ieglslating the development of compulsory health insurance for the working class. As moderate liberal legislation, the Act provided insurance for general health services, but it excluded the dependents of manual workers. General practitioner services were offered to the membership of select groups of laborers whose annual income was no greater than £160. The insurance scheme provided nearly half of the population with general practitioner care and the drugs prescribed (U. K. DHSS 1978, 1). The Act also provided income during sickness and unemployment benefits. The service was financed through contributions from the worker, employer, and state. The Act was implemented in 1913 after Lloyd George was able to overcome considerable opposition from organized medicine. Many physicians expressed fear that the state sought to control their work, and that they would suffer financial hardship from state intervention. In order to bring the doctors onboard, Lloyd George was forced to accept the doctors' proposal of a capitation system of reimbursement. The capitation system based physician 32 compensation on the number of patients affiliated with the physician's practice, rather than implementing physician salaries as George hoped would be the outcome. Furthermore, GP demand for independence from government control was realized when George agreed to allow the measure to be administered by independent insurance panels rather than local authorities. In order to preserve professional freedom, George granted the physician demand of voluntary participation in the Act. The final step toward reaching an agreement was the mitigation of the financial fears of the physicians. Generous levels of compensation were negotiated and higher income patient groups were excluded from the plan. Such exclusion permitted the GPs to maintain private patients and a continuation of the traditional competitive market scheme of fee- for-service reimbursement, albeit in a truncated form. By the mid 19403, approximately 21 million people (about half the population of Great Britain) were covered by some national health insurance and two-thirds of GPs participated in the insurance scheme (Ham 1985, 11-12). While the implementation of the Act represented a major expansion of government involvement in the provision of health care, the Act only provided primary health care to insured workers. The exclusion of treatment received in hospital and the number of uninsured dependents provided reform-minded liberals with an argument for expanding the insurance scheme. While the terms of this reform debate would change to reflect the developing collectivism of the World War II period, moderate liberals would be influential in the organization of the NHS. 33 During the collectivist era of post-World War II reconstruction, liberal values resurfaced in the NHS. Ironically, the Beveridge report that was so instrumental in creating the health service also set the stage for what would become a gradual retreat from collectivism long before the 1990_reforms. Beveridge reasoned that if high social insurance benefits were to be offered during sickness, ”every effort should be made to reduce the number of people needing them” (Pater 1981, 44). Thus the proposal of a national health service was seen as a way to reduce government spending, not expand it. In fact, the committee assumed that there existed a fixed quantity of illness in the community which the introduction of a health service, free at the point of consumption, would gradually reduce (U.K. 1942,158-163). Thus in accordance with this reasoning, the Government expected NHS expenditures to decline as the population became healthier. However health service spending soon surpassed parliamentary estimates, consequently, the Government demanded an explanation. The Guillebaud Committee of Enquiry was appointed in 1953 to provide this explanation. Three years later, the committee surprisingly reported finding no evidence of extravagance or inefficiency in the NHS and, in fact, expressed as proportion of glossifi'national product, the cost of the service had - ./' , _.--—.4—-.—-.— 1953-54 (UK 1956, 9-10). The Guillebaud committee further argued that expenditures needed to increase to improve the physical structure of many NHS hospitals. Previously, the NHS budget limited 34 expenditures on capital improvements, thereby failing to meet the demands of the medical profession for the construction of updated, high-technology hospitals. [11959993 to this growing demand, the Government passed the 1962 Hospital Plan, resulting in the expenditure of over £500 million to create modern District General Hospitals (Ham 1985, 20). Nevertheless, some advantages of a national health service were evident in the 19503 even to those who had opposed it a few years earlier. The amalgamation of voluntary hospitals and local authorities improved the effectiveness of secondary and tertiary services. Hospital Management Committee (HMC) oversight helped reduce shortages, and the regional planning of the HMCs began to eliminate redundancy. The introduction of salaried hospital physicians resulted in greater equity in the distribution of specialists throughout Britain. On the other hand, an inequitable distribution of GP3--who remained independent, unsalaried practitioners--wa3 an indirect argument In favor of the NHS. A 1971 study revealed the extent of the disparity of access to primary care. the broad pattern of staffing needs have not changed dramatically over the last twenty to thirty years. Areas which are currently facing the most serious shortages seem to have a fairly long history of manpower difficulties, whilst those which are today relatively well supplied with family doctors have generally had no difficulty in past years in attracting and keeping an adequate number of practitioners (Bulter, Bevan and Taylor 1973, 42). 35 The 1966 financial inducement created to attract GPs to under-served areas was largely unsuccessful. The disparity of equality in the distribution of hospital consultants compared with GPs underscored the compromise of liberal and collective values. GPs, free from the necessity to work within state controlled hospitals, were able to utilize their professional autonomy as independent contractors and cultural authority as physicians to influence political decisions and thereby remain free from political control. While consultants, necessarily dependent on the state controlled hospital, are placed in a compromised position. The influence of political decisions in the operation of state hospitals diminished the professional autonomy of hospital consultants. The state's control of the hospital and the salaried position of the consultant are countervailing forces against the ability of consultants to assert their cultural authority as physicians in an attempt to widen professional autonomy. The stronger collective organization of state controlled hospitals and the relative lack of consultant autonomy allowed for greater equality in the distribution of specialist care. However, the liberal organization of independent GP contractors undermined the attempt to reduce disparity in primary care distribution. The strong professional organization of GPs, in conjunction with this cultural authority in the lives of the British public, allowed GPs to preserve their professional autonomy and resist political attempts to move them into under-served areas.1 0 36 Three major problems with the NHS becameindisputable, even to its champions, during its first quarter century of operation: difficulty in integrating services, the questionable quality of care being provided to the elderly and mentally handicapped, and inadequate administrative control of in NHS. The issue of the lack of coordination among the three different branches of the NHS was frequently documented In the 19603. It seemed the existing system of administration was {incapable of providing a comprehensive, coordinated range of services. The frequent exhortations from the central government that the hospitals, local authorities, and executive councils should plan and work together were never fully realized. The provision of care for the elderly was a constant reminder of the lack of coordinated services. Care for the elderly often requires a transition between different branches of the NHS. Elderly patient care frequently shifts from the hospital to the home, thus demanding flexibility in the provision of both hospital and home health care support. The local authority, hospital, and social service agency need to regularly coordinate their services to prevent deIpéliction of patient care. Yet this degree of coordination provided difficult to achieve. The lack of coordination in the NHS was an obstacle to implementing national policy at the local level. The independence of the local health authorities disallowed the guarantee that national policies would be implemented. Local health authorities "had their own aims and objectives, and, equally significant, they were 37 responsible for providing services where professional involvement was strong“ (Ham 1985, 25). Furthermore, the dependence on physician involvement meant the influence of medical interests on national policies, and the interests of the medical profession largely resides with the acute specialties. The primary health care needs of the elderly and the mentally ill did not have priority within the medical community at large. Yet, the primary health care needs of the British population was of central importance to the Government of the early 19703. Together these challenges resulted in a complete overhaul of the health service. Integration of the tripartite structure was seen as a significant part of the solution. In 1962, the Porritt Committee, a high status body representing the medical profession, argued for the unification of health services under the control of area boards. In a 1968 Labour Green Paper, the Government outlined its intention to implement the suggestions of the Porritt Committee. After this decision to create area boards, the debate focused on the source and breadth of the area health board administration. The two prevailing points of view were either to allow local governments to administer the NHS or to implement a reformed system of national government involvement in regional planning. A 1970 Labour government Green Paper decided against turning the administration of the NHS to the local governments. It was decided that there should be "around ninety area health authorities as the main units of local administration, together with regional health councils carrying out planning functions, and some 200 district committees as a means of local participation" (Ham 1985, 26). The following year the 38 Conservatives published a consultative document strengthening the administrative role of the regional tier and creating community health councils for greater community participation. These reforms were intended to emphasize the importance of improving management efficiency in the NHS. The reform proposals culminated in the 1973 National Health Service Act. The reformed NHS began operation on 1 April 1974. The reorganized NHS had three primary objectives: unification of health services under one authority, improved coordination between health authorities and local government services, and improved management. All services were unified under Regional and Area Health Authorities with the exception of GPs who remained independent contractors, separately administered through the Family Practice Committees. Also, some teaching hospitals retained administrative oversight within the boards of governors. In order to improve the coordination of both health and social services, the boundaries of the Area Health Authorities mirrored those of the local social service authorities, and the 1973 NHS Act created joint consultative committees (JCCs) to coordinate services at the local level (Ham 1985, 28). In addition, this unification of administrative “ma... ~a..._z.__....-- across the nation. It was argued that resources could be more easily shifted in favor of neglected groups under the new structure. While the motivation behind these reforms was the development of a more effective strategy to fulfill national priorities at the local level, another primary intention of the reforms was improved management. The Conservatives stressed the 39 need to continue improving management in the health service. In an attempt to fulfill this goal, the Government published Management Arrangemente fer the Reorganized NHS, known as the 'Grey Book'. It detailed the functions of each of the new reorganized tiers of the NHS, and it provided job descriptions for health authority officers. New administrative concepts Included the use of a multidisciplinary health care team approach to patient services, the development of consensus management, and a new explicit role for medical professionals in the management system. The attitude driving the new administrative structure was described in the Grey Book as ”maximum responsibility delegated downwards” matched by ”clear lines of accountability upwards", which would be exercised through the creation of sound management structures at every level (U. K. DHSS 1972, 10-11). This attitude of running the NHS as a large business blossomed into an overall corporate planning system, introduced only two years after the structural reforms. The Conservatives believed that ideas borrowed from the private sector could be successfully implemented in the NHS resulting in improved health care sector performance. In fact, the new administrative arrangements were devised with the assistance of the management consultants, McKinsey & Co. Ltd. (Levitt 1977, 32). The areas of concern in the reorganized NHS centered around the continued delays in making decisions, the slow development of strong relationships between the administrative tiers, and the pervasive belief of the existence of too many tiers and too many administrators. A3 evidence, the DHSS acknowledged in the House of Commons Public Accounts Committee an increase of 16,400 40 administrative and clerical staff as a result of reorganization. Although, many of the new staff members were previously employed by local authority health services. Yet the most damaging impact of the new NHS structure was the unexpected "high cost of reorganization, both in terms of finance and, more particularly, of the impact on staff morale” (Ham 19185, 30). In order to address these issues, the Merrison Royal Commission on the NHS was established in 1976. The commission was charged to "consider in the interests both of the patients and of those who work in the National Health Service the best use and management of the financial and manpower resources of the National Health Service” (UK 1979, 1). The commission reported that three tiers of administration were unnecessary; the NHS can more efficiently operate with only one level of administration below the RHAs. In addition, the commission argued to eliminate the Family Practitioner Committees and expand community participation in the Community Health Councils. More importantly, it concluded structural reforms were no panacea for all of the administrative problems facing the NHS. When the Conservatives assumed power in 1979, they responded to the Merrison recommendations in a consultative paper entitled Patiente Firet. The paper endorsed the proposal to remove a tier of administration in the health service. It called for the creation of District Health Authorities (DHAs) to combine the functions of existing AHAs and DMTs. The recommendations of Patients Fitet were largely enacted in July 1980. 192 DHAs were created on 1 April 1982. District managers were expected to 41 maintain spending within the budgets set by the DHSS. As a result, the Government estimated that by 1983 the amount spent on management in the NHS had fallen from 5.12 per cent of the total budget in 1979-80 to 4.44 per cent in 1982-3, representing a saving of £64 million (Ham 1985, 31). Soon after the 1982 reorganization, Roy Griffiths, Deputy Chairman and Managing Director of the Sainsbury's grocery chain, was appointed to lead a small team to review the use of management, staff, and resources in the NHS. The Griffiths Report was preposed to develop a series of recommendations to be immediately enacted upon in order to improve the management style and efficiency of the health service. The October 1983 report made proposals to rectify the perception of significant weakness in NHS management. The primary critique of management was the lack of a clearly defined objective. The report stated: Absence of this general management support means that there is no driving force seeking and accepting direct and personal responsibility for developing management plans, securing their implementation and monitoring actual achievement. It means that the process of devolution of responsibility, including discharging responsibility to the Units, is far too slow. (U. K. 1983, 12) According to Sir Roy Griffiths, 'lf Florence Nightingale were carrying her lamp through the corridors of the NHS today, she would 42 almost certainly be searching for the people in charge" (U. K. 1983, 23-24). In order to address this absence of general management support, the report recommended appointment of general managers at all levels of the NHS. These managers were charged with providing leadership, engaging in a continual search for positive change, reducing costs, motivating staff, and developing a dynamic management approach. Furthermore, the report stated physicians ”must accept the management responsibility which goes with clinical freedom” (U. K. 1983, 18). Another significant recommendation of the Griffiths Report was the establishment of a Health Services Supervisory Board and a NHS Management Board within the DHSS. The function of these two administrative bodies was to improve managerial efficiency and strengthen the administrative power at the center of the service. The chairperson of the Management Board must be drawn from outside the NHS and the civil service. The intention of the proposal was a redirection of the style of management, heightened concern with the strategic direction of the health service, and reduced involvement in detailed management issues (Taylor 1984, 25). The conclusion of the report stated, ”action is now badly needed and the Health Service can ill afford to indulge in any lengthy self-imposed Hamlet-like soliloquy as a precursor or alternative to the required action” (UK 1983, 24). In reaction to the reforms, organized physicians and support staff resisted the appointment of general managers. They feared the introduction of general managers would undermine the decisions of the health care team, or possibly, lead to autocratic decision- 43 making by general management. It was also argued that because of the large number of different occupations in the NHS, management would have to operate with the agreement of those affected by their decisions and thus lack independence (Taylor 1984, 26). However, the end result of this debate was the June 1984 Government decision to appoint general managers at all levels of the service by the close of 1985. This liberal policy remained in force until the Conservatives decided to up the ante in the National Health Service and Community Care Act of 1990 with the introduction of competitive market principles. 9. 44 EPILOGUE The collectivist tradition of the NHS has remained in tension with the liberal tradition in organized medicine. From the "positive freedom“ spirit of the public health movement to resistance against the imposition of a collectivist health service in the twentieth century, organized medicine has been motivated by the desire to protect this notion of professional autonomy, this conception of libertarian social justice, and this belief in a marketplace for health care. Yet, organized medicine eventually came to support a national health service founded on the belief that some collectivist, egalitarian institutions were necessary for the welfare of the nation, even at the expense of free trade and competition. Since 1948, a collectivist health service has often struggled to resolve problems in delivering costly modern medicine; in these struggles, the implementation of liberal values has gradually reformed the NHS to the point that the 1948 version seems anomalous. The highly centralized administration of the service, the implicit rationing of health care, the emphasis on shared sacrifice, and a collectivist commitment to provide holistic social services eroded as the experiences of wartime have faded. This resurgent liberal tradition also means that a more individualist British society may have renewed hope in a limited conception of government. The- liberal trends influencing the 1990 45 reforms may be understood as a positioning of the NHS so that it conforms with dominant cultural and historical values. But dominant does not mean exclusive. The argument in this thesis is that the 1948 NHS was the product of collectivist and egalitarian elements in British society in a particular historical context. Although that context is changing, these elements remain with the NHS (even though reformed) as the most visible reminder of that worldview. The delivery of health care has become more efficacious, complex, and technologically advanced since the founding of the NHS, but modern therapeutic procedures still require the collective efforts of health care professionals. Moreover, the rising cost of delivering modern health care demands collective decisions about the goals of medicine and the limits of medical care (Callahan 1990). The British people, for whom rationing and queues remain symbols of fairness in the distribution of scarce resources, seem intent on maintaining the communitarian values reflected in the original NHS, no matter how effective the 1990 reforms turn out to be in containing costs and inCorporating market values. It seems likely that the long-standing tension between British liberalism and collectivism, which I have posed as an historical-philosophical continuum, will be palpably evident in the future of the NHS. ENDNOTES 1In Norman Daniels' moderately egalitarian conception of justice, illness and disease are deviations from ”the natural functional organization of a typical member of a species”. Thus health care is needed to achieve or maintain ”species-typical normal functioning”. Health care is understood as necessary to provide ”a normal opportunity range consistent with the pursuit of an array of life-plans which reasonable persons are likely to construct for themselves” (Daniels 1985, 26-33). Thus, fair access to the equitable provision of health care is seen as necessarily facilitated by society. 2Health care expenditures in the United States measured 14.5% of gross national product in 1994. 3British liberalism emerged during the political struggle that culminated in the Glorious Revolution of 1688. British liberalism was born with the cries for religious toleration and constitutional government. Soon the Scottish Enlightenment thinkers (David Hume, Adam Smith, Adam Ferguson) were writing of the advantages of limited government and free opinion and their connection with economic growth and scientific progress. In time, a British school of liberty developed out of the writings of Thomas Hobbes, John Locke, David Hume, Adam Smith, Jeremy Bentham, and John Stuart Mill. Classical British liberalism consists of three fundamental elements: maximum individual freedom, constitutionalism, and free competition (as described by Adam Smith). The classical liberals taken together introduced and developed two major themes in liberal thought: democracy and libertarianism (Merquior 1991, 37). Since 1688, these two liberal themes have influenced British social policy, and the theme of libertarianism is central to an explanation of the 1990 NHS reform. A3 a point of clarification, liberalism refers to the historical political philosophy of individual freedom, individual rights, and civil liberties; while libertarianism refers to the philosophy of social justice couched in classical liberalism. 46 47 4Tristram Engelhardt translated a libertarian conception of social justice into medical terms. In an elaboration of the tension between the principles of autonomy and beneficence, Engelhardt endorses the primacy of autonomy. "The principle of beneficence is not required for the very coherence of the moral world. It is in this sense that this principle is not as basic as what I term the principle of autonomy. The principle of beneficence is not as inescapable. One can act in nonbeneficent ways without being in conflict with the minimal notion of morality" (Engelhardt 1986, 68). For libertarians, autonomy is a fundamental right; the only acceptable social obligations are those freely entered and explicitly outlined in contracts. Therefore, freedom and the right to exercise individual autonomy are understood as fundamental rights, justly limited only if the exercise of one's autonomy directly interferes with the autonomy of another member of society. 5Since differences between the White Paper, Werking fer Patiente, and the NHS and Community Care Act of 1990 are largely semantic, I use the two sources interchangeably hereafter and refer to them as the 1990 reforms. The 1990 Act simply legislated the proposals within Werking fer Patiente. 58ir William Beveridge defined full employment as less than 8.5 percent unemployment (U. K. 1942, 164). 7A strong paternalistic philosophy of health care delivery resulted from the fact that the NHS provision of health care is based on a determination of patient need by the health care provider. It is argued that this favored assumption of medical authority arose out of the Emergency Medical Scheme established at the start of World War II (Taylor 1984, 6). In addition, the established British system of implicit health care rationing emerged from the acceptance of health care provider authority in decisions of patient need (Aaron and Schwartz 1984). 8Abel-Smith (1964) offers a detailed description of the variety of institutional forms of health care delivery developed under voluntary organizations, local authority, and poor law authority during the nineteenth century in Great Britain. 9Wohl (1983) provides a more complete history of public health in Victorian Britain. 48 10Starr (1982) argued that ”cultural authority” contributed to physician sovereignty in the United States during the late nineteenth and early twentieth centuries. BIBLIOGRAPHY BIBLIOGRAPHY Aaron, Henry J., and William B. Schwartz. The Painful Preecrietion: Ratiening Heeeital Care. Washington, DC: Brookings Institution, 1984. Abel-Smith, Brian. The Heeeitale, 1899-1948. London: Heinemann, 1964. Allsop, Judy. Health Peliey and the Natienal Health Serviee. 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