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The United Kingdom National Health Service

A personal (and probably biased) guide to its history, trials and tribulations for anyone interested. Where possible, dates and figures have been verified but what follows is best taken as a personal view. It is intended as a guide and introduction to a health care system that intrigues and confuses many in the UK, and even more abroad.

All currency figures in this document are in Pounds Sterling, so beware if your computer converts the Pound symbol: to a Dollar:$ .


The NHS began in 1948 by act of Parliament in 1946, under the guidance of Aneurin Bevan, then a Minister of the incumbent Labour (=left wing or Socialist) Government, and in response to the Beveridge Report on The Welfare State of 1942. Most hospitals in the UK had previously been operated as non-profit making concerns. About two-thirds of them had been run by Local Authorities (the bodies also responsible for local Fire Services, Schools, Roads etc), with about one third of them run independently as Voluntary Hospitals. With the NHS act, these were all compulsorily acquired and subsequently administered by the State, and all treatments became universally available at no cost at the point of provision, the whole being centrally funded by taxation. From 1948 on all hospital doctors, hospital nurses and all other hospital and staff became salaried employees of the State.

By contrast the community-based staff, such as District Nursing, Midwifery, Ambulance and School Health Services remained the responsibility of the Local Councils under the supervision of the local Medical Officer of Health.

At the same time, General Practitioners (Family Doctors or Primary Care Physicians) managed to remain completely outside the direct employ of the State. Instead, countrywide primary health care has always been subcontracted out by the State to UK General Practitioners acting as individual private businesses. This means that, even though the State is effectively the monopoly employer of GPs, they are individually classed (and taxed) as self employed. The State has no employer-type control over what individual GPs do: the only influence it has is in deciding centrally what services it will or will not contract to buy from GPs as a group.

A single, centrally negotiated and centrally priced contract is instantiated between individual GPs and their local contracting authority, acting as agents of the State. The details of this contract are set out in a document known as the Red Book, which lists those core General Medical Services that each GP agrees to provide as a consequence of the contract, together with a long list of optional services which the government agrees to pay extra for but which GPs are under no obligation to provide. Failure to provide the core services agreed in the contract (e.g. refusing to see a patient) is an offence which results in a disciplinary hearing with the contracting authority. Failure to provide some of the additional services - such as Cervical Smears - is not an offence but does not go down well with the patients.

There are a few GPs in the UK who choose to practice exclusively privately (that is, they do no work at all on contract to the Government) but they are presently very few and far between. In October 1995 BUPA, one of the largest UK private health insurance companies and providers, announced that it was setting up a private Primary Health Care service. This venture has made virtually no impact on the pattern of provision of Primary Care.

The original ethos behind the NHS was the belief that, through the provision of universal and complete health care, free at the point of provision, the NHS would eliminate significant disease and thereby work itself out of a job. Clearly a naive view by today's standards, this ethic remains one of the problems of the NHS today: the electorate still believes that there is intrinsic value in a universal and complete NHS, although no-one can agree on exactly what constitutes 'complete' health care, and none can say what the actual benefit of attempting to provide this (rather than rationed care) might be. Politicians have found the NHS a useful political football, any accusation that the opposition party's policies might damage this ethic carrying great political value. This allowed an unworkable idea to become a sacred cow, and no politician dared question the practicalities (until recently).

Another significant problem that the NHS inherited at its inception, and carries forward today, was its infrastructure. Prior to the NHS Act, hospitals had been constructed generally in places where there was sufficient private custom to make them financially viable as individual going concerns, rather than in response to pure local need. This resulted in a significant excess of hospital service provision, for example, in and around London and a relative dearth in less well off parts of the country. In the less well off provinces, many of today's hospitals are contained in buildings that began life as 'poor houses', often situated geographically in less than ideal sites for their current use. Although many would like to see 'Green-Field' redevelopment and relocation of acute services, the cost is prohibitive.


The original management structure of the NHS, which persisted from 1948 until 1974, had 14 Regional Hospital Boards and 35 Teaching Hospital Boards reporting direct to the Ministry of Health. Between them, these Hospital Boards supervised about 400 Hospital Management Committees, who in turn supervised the hospitals. Primary Care services were run by 117 Executive Councils, and Community Care by the Local Authorities.

In 1974 this was reorganised into 5 tiers of management: Area Health Authorities (AHAs), controlled by District Health Authorities (DHAs), in turn controlled by Regional Health Boards which were finally accountable to the four Departments of Health and Social Security (one each for England, Wales, Scotland and Northern Ireland) and thereby, parliament. Individual hospitals were administered by AHAs, with day-to-day running performed by Hospital Management Committees. GPs and Dentists were employed by Family Practitioner Committees, which were answerable direct to the DHSS. The hospital Consultants were employed, and had contracts held by, the Regional Health Board. Lastly, a small number of highly specialised hospitals - about 5 - became Special Health Authorities, being answerable direct to the DHSS.

Since 1948 there have been several reorganisations of the NHS, notably those in 1974 and 1989. Some of the more significant changes have been the abolition of Area Health Authorities, the introduction of general management in 1983 in response to the Griffith's Report, the GP New Contract of 1987, the introduction of the Nursing 2000 plan and The Community Care Act.

One of the most important changes centred on the algorithm for distribution of central NHS funding. Until the mid 1970s, the amount of money allotted to individual Regional Health Boards/Authorities had been calculated as 'Last Year's plus a percentage', thus perpetuating the particular carve-up of resources decided upon at the inception of the NHS, 30 years earlier. In 1976 a Resource Allocation Working Party (RAWP) was instituted, charged with the task of deciding how to reallocate the total NHS budget across the country. This resulted in a relative diversion of money away from London to the Provinces, but this was based largely on demography rather than any assessment of differences in actual local need. In 1977 a report was commissioned to study the interplay of social class on Health Needs. This led to the publication of the Black Report 'Inequalities in Health' in 1980, and ultimately to some form of social weighting being added to resource allocation calculations.

Immediately prior to the 1989 Government White Paper :'Working For Patients', the broad structure of the NHS was:

   Parliament (1)  
   Departments of Health for England, Wales, Scotland and Northern Ireland (4)  
 Regional Health Authorities (17)    Family Practitioner Committees (117)
 District Health Authorities (217)    General Practitices (9000) & Dentists
 Hospitals (2005 in 1988)    

Note that each District Health Authority has an average of 9 hospitals. The typical pattern is for these hospitals to comprise:

One District General Hospital (DGH) which has full on-site diagnostic and investigative laboratory and radiology services to support an A&E department and several hundred beds. They provide a more or less common core service of all in-patient and out-patient facilities for general surgery, orthopaedics, ENT, general medicine, elderly care, paediatrics, psychiatry, obstetrics and gynaecology. Most DGHs also provide a wide but typically not quite complete range of additional speciality services such as opthalmology, urology and neurology. Patients within the geographic catchment area of a particular DGH who require a referral to a speciality not provided by the local DGH will be referred instead to a neighbouring district. Service planning for certain highly expensive services, or services where it is not sensible to train many practitioners (for example Neurosurgery) are coordinated to some degree by the Regional Health Authorities.

Any number of small outlying hospitals, usually each with less than 100 beds, and mainly catering for continuing psychiatry or long term care of the elderly and ESMI. They usually also include at least one for mental handicap. District Health Authorities covering a large (and geographically diffuse) rural population will usually also have a number of outlying 'Cottage Hospitals' which provide minor surgical and/or obstetric services and usually some out-patient services operated as branch clinics by the same consultants that inhabit the DGH.

The 'typical pattern', however is oft departed from and there may be two or even three DGHs in a given DHA and both may have an A&E service whilst only one site has Orthopaedics. These less-than-rational patterns of service planning are part of the NHS historical legacy: local opposition to closure of any hospital is usually severe.


Sources: The Independent newspaper 13.08.99, The NHS Data Book


The Government White Paper of 1989, entitled 'Working for Patients', was the precursor to the radical changes that have taken place in the NHS in recent years. It's origin was in a one-to-one television interview with the Prime Minister, Margaret Thatcher, a few years previously. Under some heavy interview fire she announced, quite unexpectedly, that the Government was going to undertake a fundamental review of the National Health Service. Whether or not she had been thinking of this for some time is not known, but certainly it would appear that this very public announcement was the first that any of her Ministers had heard of the plan. Having made the announcement, political expediency required that not only the review, but also any implementation of its recommendations, should be completed in a very short timescale - before the next election, then three years away. The review was placed under the stewardship of Kenneth Clarke, Minister for Health. Renowned as someone who relishes a political fight and possesses an aggressive and provocative style, Mr Clarke chose to tackle the review phase by assembling a task force comprising a small number of managers and doctors sympathetic to the idea. The introduction of some form of market forces into health care provision was dreamt up by this group, whilst GP Fundholding itself was the creation of Mr Clarke personally, whilst he was on holiday in Portugal.

The fundamental changes introduced by the White Paper are embodied in the concepts of Trust Hospitals, Fund-Holding General Practices and the Purchaser/Provider Split:


Meanwhile, unrest at the coal face increased until, at the 1995 summer conferences of the Royal College of Midwives and of the Royal College of Nursing, both bodies voted by substantial majorities to revoke their respective vows never to take industrial action. The Nursing body subsequently reached a successful bargain with the Department of Health, but in Spring 1996 strike-ballotted a group of its members in a Welsh Hospital over a local pay dispute.

The General Practitioners in particular became locked in dispute with the Department over the pricing of their Out-Of-Office-Hours duties. Throughout the years of implementation of The NHS Changes, GPs had experienced a steady increase in demand for their time, both from administrative paperwork and from increasing patient attendances. The Patient's Charter was widely thought to have been a catalyst of this explosion of patient demand. A particular problem was the rise in the number of requests for GPs to visit patients at home 'after hours', with the majority of GPs reporting that the reasons for these requests were usually trivial. One GP was called to see a patient because they had run out of Baby Milk, another to supply a Condom.

A ballot was taken with a view to taking Industrial Action if the GPs demands were not met, and a mandate was obtained. In the end, the incumbent Secretary of State for Health (Virginia Bottomley) was moved to Secretary of State for National Heritage as part of a Cabinet reshuffle, and Stephen Dorrel was promoted into the vacant hot seat. Shortly after this, an agreement was struck between the DoH and the GPs representatives (the GMSC). This includes:

Less than a month later Mr Dorrel described his vision for GPs, and UK Primary Care generally (which he characterises as 'The Jewel in the NHS crown'), as including their being the prime providers of emergency care. This suggested further changes were planned for the nature of Primary Care in the UK, and signalled publicly the intention to shift it further towards the provision in the Community of selected Secondary Care services. It remains to be seen whether all GPs will have, want to have, or be able to afford the technical experience, equipment and time to provide this sort of care. In March 1996 the GP's negotiators unilaterally issued a description of what they thought General Practitioners should provide as a core servive. Pressure grew to seek two separate contracts with the government: one for the core services so identified, and one for other optional work, including Out of Hours calls. Many GPs believed that this was now a requirement, both to provide for that significant proportion of GPs who wish to provide only the core service and also to obtain acceptable pricing of the contracts separately.

The 45M pounds for OOH care has since catalysed an extremely rapid and radical change in the way OOH care is provided: in most cities now, care is provided by groups of 10 to 20 practices joining together as a co-operative to finance and manage a single OOH service for all their (100,000+) patients. In addition , the Department of Health provided clarification of the terms and conditions of service for GPs regarding patients' requests for home visits. This included the revelation that a doctor is not in breach of contract (as previously believed) if he refuses to visit a patient at home on request provided the visit is judged by the clinician 'to be inappropriate'. A set of guidelines for what is and is not considered appropriate was subsequently drafted locally by one pioneering cooperative, but this has since been published widely and become a de facto national guideline. Most co-operatives now operate by requesting the patients to travel to the night doctor, located at a special night clinic, rather than having the doctor visit the patient at home as was previously the norm. Some co-ops provide free transport to the clinic for patients without their own means. Some also employ an extra doctor specifically to work nights all year round, with only the second-on cover being provided by members of the cooperative on a rota basis. The result of all this is that many daytime practicing GPs no longer 'work' after 7 or 8 O'clock in the evening, and often for only four hours at weekends, having contracted the remaining hours of on-call work out to the cooperative.

In September of 1996 the Department of Health announced plans to allow hospitals to contract and employ General Practitioners to to provide Primary Care, raising the interesting possibility that General Practices as businesses and health care commissioners might find themselves in commercial competition, as Trusts already are as providers of care. In the context of the stated goal of merging Primary Care closer with the provision of both emergency care and 'simple' secondary services it makes sense that, whilst trying to persuade traditional 'primary care' providers to take up more traditionally 'secondary care' work, the reverse should also be true. It is unclear how this system will operate, however.

At the present time there are planning constraints which prevent qualified doctors (and, similarly, pharmacists) simply setting up new practices in an area of their choosing. These constraints exist to prevent competition for a limited number of patients (and thereby associated capitation payments) resulting in list sizes too small to produce viable income for each competing practice. The number of practices and GPs in an area has, up until now, been controlled by the FHSAs (as monopoly employers) so as to maintain lists at around 2000 patients per GP. It is unclear how or if these rules might apply to hospitals seeking to expand into primary care provision.

Another difficulty with the proposal is the significant infrastructure advantage hospitals would enjoy by virtue of on-site, direct access to advanced diagnostic tools, which would seem to offer at least a potentially unfair competitive advantage. Further, since referral for such costly investigations would certainly be easier, and might possibly be income-generating for the hospital as a whole, there is a risk that hospital-based primary care medicine will become more technological or defensive than is currently the case in the community.

There is clearly popular demand for, and willingness to consume, 'technological' healthcare even if there is no evidence that any long term health benefit results (and plenty of empirical evidence in the USA that it does not). Certainly, it would be more expensive. Should hospitals move primary care down this path, it is difficult to see how 'traditional' primary care will be able to avoid popular pressure to follow.


The winter of 1995-6, as every winter, saw high profile stories in the press of a seasonal NHS Bed Crisis. General Practitioners found themselves unable to find local hospitals with beds free into which to admit urgent patients. The phenomenon of patients lying on trolleys in Casualty for hours until a bed was found seemed to be spreading. Several ill patients were transferred a hundred miles or more to an available bed, only to die shortly after arrival. In particular, the press latched on to the problems of finding Paediatric Intensive Care beds. Because such stories are a recurring seasonal event, it was difficult to objectively interpret their significance. Day time TV became full of Nurses or Doctors saying that their impression was that, this year, the crisis had started earlier than usual. Several possible factors were put forward to explain the overall problem: hospitals were running with higher average bed occupancy - usually 95% or more - which meant there was no slack to take up the predictable seasonal increase in emergencies. There is a Nursing shortage, partly due to demography (fewer young people). The division of the NHS into individual, competing 'Businesses' militates against any sort of cooperation to make the best use of limited wider resources.

In May of 1997 the Conservative government was defeated in a landslide victory to the Labour Party. The manifesto on which this election had been won included affirmation that their policy on health would include abolition of GP Fundholder status, on the grounds that the two-tier system it engendered was unfair. However, they stated that they believed that the Purchaser-Provider split had been useful, especially combined with a greater input from GPs in a contracting role.

Exactly what structure the new government envisaged to replace The 1990 Changes remained unclear through the election and for some months afterwards. They recognised that a further, major upheaval would not be popular amongst healthcare workers, who had only just got used to the last changes. They were also keen to avoid accusations from the Conservatives that they were simply trying to turn back the clock.

Late in 1997 the Labour Party policy was crystallised into a new white paper for England called 'The New NHS'. Scotland, meanwhile, had always had a different system for its NHS in any case but with the imminent arrival of a devolved Scottish parliament a separate white paper (along the same lines) called 'Designed to Care' was published.

The government wishes to see six principles upheld. The NHS should be:

To achieve this, the total NHS budget will be divided among Health Authorities who in turn will pass the money to primary care groups (PCG) each made up of around 50 GPs. In time, these PCGs will be encouraged to assume complete control of all commissioning/purchasing decisions, and Health Authorities will merge to cover larger populations.

Annual contracts between purchasers and providers will be replaced with three- to five- year agreements.

The social and clinical services will be encouraged to work together, instead of using the boundary between each other to resist referrals and thereby contain costs. Measures including common budgets will be considered, and ideas are to piloted in a number of 'Health Action Zones'.

As promised, Fundholding was stopped from April 1999 and replaced entirely by PCGs. Hospital and Community Trusts continue as before, but they are strongly encouraged to devolve budgetary responsibility to clinical teams, and to involve senior professionals more in management. Contract negotiations between purchasing and providing bodies should increasingly take on the form of a dialogue between primary and secondary care clinicians rather than between managers.

A major part of the white paper is given to quality inititiatives. A number of new national bodies came into existence from April 1999:

Commission for health improvements: aka CHIMP. goverment appointed, charged with ensuring that local systems are implemented to 'monitor, assure and improve clinical quality'.

National Institute for Clinical Excellence: aka NICE. body of patient representatives, managers, economists, academics and health professionals giving 'new coherence and prominence to information about clinical and cost-effectiveness'. The aims of NICE are:

The current vision for NICE is that it will issue 10-15 evidence-based guidelines each year covering all aspects of existing medical and prescribing practice. In addition, NICE will make judgements on 30-50 healthcare interventions each year in order to pronounce on their clinical and their cost effectiveness. The judgement will grade each intervention as either (A) for clinically cost-effective use in the NHS (B) for clinical trials only (C) not for routine use.

Health Improvement Programmes: locally produced strategies for improving health and healthcare, drawn up in consultation with hospital and community trusts, patients, primary care groups etc. Must be updated annually, and GPs must ensure that the care they provide - as well as the care they purchase - fits within the overall local plan.

NHS Information Authority out of a restructuring of the old NHS Information Management Executive. The Authority will be responsible for ensuring that the new NHS IT strategy is followed, with the aim of providing an information infrastructure to support the activities and aims of, for example, NICE. The Authority will subsume bodies such as the National Casemix Office and the NHS Centre for Coding and Classification.

The timetable for implementation of 'The New NHS' was given as around 3 years.

The NHS Plan

In January 2000 Tony Blair (the Labour Prime Minister) promised to bring the funding level of the NHS (currently 6.81% of GDP) closer to the European average (8.61%) within five years, equivalent to about 10bn a year recurrent. This followed strong public criticism from Lord Winston (a fertility specialist and a prominent labour supporter) regarding chronic underfunding. However, it was also made clear that this money would not come without strings. Funding would be conditional on demonstrated improvements in service quality, exemplified by the controversial incentive of increasing funding most for those areas where service was already improving and so penalising those where it does not.

In June of 2000 it became clear that progress in improving the quality of service provided by the NHS continued to be too slow for the politicians. A summit meeting was hosted by the Prime Minister, who was reported in the media to be contemplating more radical restructuring of the NHS that could amount to its dissolution.

On 27th July, 'The NHS Plan' was released - a blueprint for a 10 year overhaul and modernisation of the NHS.

(Extract from the BBC)

The NHS national plan includes proposals to: