Origins of the NHS

Origins of the NHS
The NHS began in 1948 as a result of an act of Parliament in 1946, under the guidance of Aneurin Bevan, then a Minister of the incumbent Labour 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 onwards all hospital doctors, hospital nurses and all other hospital staff became salaried employees of the State.

The NHS was created as one of the pillars of the welfare state, however, it was soon consuming a large proportion of welfare spending; this issue of cost has remained an important factor throughout the history of the NHS.
(Lowe, 1993)

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.

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 affluent 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.

One of the biggest obstacles to successful management of the NHS, and also to any analysis of its current well being, remains the significant lack of any valid information as to what the NHS does, how much it costs and where the money is spent. Indeed, it is perhaps surprising that \'the 1990 changes\' were conceived and implemented as fast as they were, given the lack of information that was available in 1988. (Ham, 1996) Attempts were made at the start to ensure that hospitals began from a \'level playing field\' so that they were in fair competition with one another, but the sometimes 10 fold differences in the early quoted costs for identical services in different hospitals had as much to do with differing costs of maintaining buildings as it had to do with a lack of agreement on accounting methods. There remains very considerable discrepancy in pricing. Different amounts are being charged for the same procedure in different facilities, even if they are in close proximity to each other. Further, because the NHS evolved organically since 1948 as an integrated provider of Health Care, the attempt to fragment it into different units, cross-charging one another, rapidly became beset by boundary disputes and uncertainties. There was much Cost-Shifting occurring, for example patients being discharged following Day Case Surgery with instructions to attend the GP for removal of stitches.

The NHS and Community Care Act 1990 was a fundamental reshaping of the economic environment in which the health service operates. The proposals contained within the white paper Working for Patients and the subsequent Act held the prospect of a radically reformed, market-based NHS.
(Appleby, 1993: pp 113-114.)

It soon became apparent that the NHS continued to suffer from difficulties despite