The NHS was created in 1948 with money borrowed from the Americans. The Americans had given Germany and Japan money (they called it Marshall Aid) to rebuild their countries after the destruction of the second world war.
“The NHS needs reform.” You hear that all over the place. But is it reformable? It’s consuming more money than ever, but productivity, which is the state of your health and mine, is steadily declining. People are dying earlier and younger people are dying unnecessarily. Prevention and screening are well below international averages. Here’s my opinion why.
The NHS was created in 1948 with money borrowed from the Americans. The Americans had given Germany and Japan money (they called it Marshall Aid) to rebuild their countries after the destruction of the second world war.
When Prime Minister Atlee asked for a similar deal, he was refused an outright gift on the grounds that Britain was broke and couldn’t afford a welfare state. “Get your economy right first”, they said “and then buy a national health service”. But we didn’t heed the warning, so the Americans gave us a loan, on which they charged interest. The debt was not paid off until about 2001 and we still haven’t got what we really want in the way of health care.
The man who dreamed up our NHS was Lord Beveridge, a Liberal, not a Labour, politician. What Beveridge envisaged, however, was nothing like what we got. He wanted an insurance scheme in which you were able to draw out services on the basis of contributions you had paid in. Self-employed people, long term sick and very high earners were amongst those who were at first excluded, but the exclusions proved to be so politically unpopular that the NHS was designed instead for everybody to draw out of, even if they hadn’t paid anything in. Those in work would subsidise those who couldn’t work.
This was alright until those without work began to outnumber those in work. The scheme began to falter and the government never even tried to keep a separate fund for health and welfare. Everybody’s NI contributions went into the general taxation pot and the government stopped trying to balance the books. No subsequent government tried either. There never was, and is not now, a national insurance fund, nor even genuine national insurance contributions.
So, created out of a loan from the Americans, our welfare state was short of money from the start. Add to this the fact that it was designed for a country with a population of 45 million people, that medicine was much less complicated – and therefore cheaper – then than it is now, and that we had more hospital beds then than we do now and you have a recipe for trouble.
The welfare state took over a system that catered more or less for everybody. Before the NHS there were very few people who did not have some sort of payment plan. Medical charities and religious organisations ran hospitals for people without medical insurance of their own. There was definitely a two-tier system of treatment, but few people, if any, were totally without medical care. Added to that were cottage hospitals and convalescence homes that catered for the long-term sick who did not need medical intervention, and huge mental hospitals that looked after the mentally ill.
Public health departments in every local authority employed armies of public health nurses health visitors and home helps who made sure that new mothers, the elderly, terminally ill people and anyone else who was ill at home was visited regularly and taken care of (the nurse Gladys’s of Open All Hours, the midwives of Call The Midwife).
Doctors were on call 24-hours a day. They visited you at home if you requested it and it was the doctor who called the ambulance if you needed one. This helped to avoid the nuisance or hoax calls that plague the ambulance services today. Fights were few and far between. Youths of 18 went into the army for two years and matured with strict discipline there.
There were policemen on the beat who lived in police houses on their patch and every village had its “bobby”, so violence was usually diffused before it started because the police were embedded in their community. They knew not only what was happening, but what was likely to happen, when and where. Crime needing hospital emergency treatment was rare. So, what went wrong?
Well, as soon as a state creates welfare services and bases a high standard of living on them, resources are finite. Even the United States is unable to live up to the ideals written on the Statue of Liberty of welcoming in the poor of the world because they no longer let people live or die by their own efforts. They have schools and hospitals and water and sewage and roads and trains and this is all carefully geared to the needs of a certain number of people. People no longer succeed or fail by their own efforts. Everybody now relies, to some extent or other, on services provided by the state – and none of them come cheap. They need to be planned for, financed, built and maintained, or they collapse.
In Britain there has been no attempt to build infrastructure to match the rise in population, which has grown from 45 millions to nearly 70 millions since 1950 and there are fewer hospital beds now than there were in 1948. The lack of a ring-fenced pot of money means that there is nothing to draw on in times of stressed resources.
There is no excuse for this. From 1948 to the first years of 2000, there was a surplus of contributions over expenses. In other words, for close to 50 years, the government made a profit out of the national insurance contributions. Sometimes the profit was as high as two billion pounds a year. Instead of saving that money or building new hospitals and training new staff, successive governments spent it with no record of where it has gone.
Someone at some time, has got to introduce a national insurance fund so that medical services pay for themselves. A sensible way to set up the fund would be to assess the annual need for medical treatment, then divide that amount by the number of contributors. You then have the cost per person.
People would only be able to draw out what they put in so there would need to be a surplus for those people who could not contribute but need constant medical services. This, presumably, would need to be a government-backed fund. The government has all this information already, it’s not hard to work out. I would suggest we find out how much the government has taken out of national insurance over the years, and create an emergency fund out of that. I bet nobody takes up my suggestion.
We have got to stop regarding the NHS as something very special and apart. It is not apart, it is embedded in our social system and if other parts of the system fail, then the NHS will be brought down with them. You’ve only got to look at care for the elderly to see the truth of that.
Care homes cost about £800 per resident per week. Nursing homes cost much more. When people can’t afford the fees and there is no government money to help them out, hospital beds are taken up by people who can no longer live alone but have no money for care homes fees. So critical care hospital beds are full of elderly people costing nearly £2000 per night because there is no money for anything cheaper – while the national insurance fund has made enormous profits for years and years. Did you ever hear anything as daft as that?
You can see, too, that because the NHS is in meltdown, so is the rest of the country. Or perhaps it’s because the rest of society is in meltdown that the NHS is too. It’s too difficult to separate. I do know that nothing, anywhere, seems to work efficiently anymore and nobody seems to care.
Can I ask you a question? If countless people are brought into a country and they come expecting a better life, are they going to put their backs into a struggle to make things work properly, or are they going to move on for an even better life if they can find it? What would you do in their shoes?
In the NHS 60% of doctors were born and trained abroad. To earn a good living, they don’t need to make house calls at 3 am, so they don’t. They don’t need to assess emergency treatments because the ambulance service has taken that over for them. They have gone on strike for better pay and they have got it, (even though they earn much more money than people who work far harder at more dangerous jobs than they do). They’ve got lots of extra money without reinstating any of the services we used to enjoy. My dentist saw patients face to face during COVID lockdown but my GP didn’t. Many earn enough to work part time, citing “stress at work” as the reason. There is real stress in accident and emergency departments in hospitals, but not anywhere else.
There are ways we could devise for training to be available to anyone, from porter to surgeon with a direct ladder for promotion, rewarding enthusiasm and dedication, retaining staff and promoting loyalty. That requires a whole new way of thinking about education and training which I will go into in another paper. And no, I don’t think the NHS is reformable or retainable and I think we shall probably lose it quite soon. This will not only be a tragedy. It will be a stain on us all.
Joan Bridge-Taylor
Reform UK Advisor