What factors affected the NHS in the 1980s and how was health care affected - Essay Example

What factors affected the NHS in the 1980s and how was health care affected Introduction Since 1980s, the UK has accomplished a range of extensive structural rearrangements with the aim to enhance the economical flexibility through increasing the part of competitive forces, and concerning itself with realized market failures through developed regulation. A new reform package is the reform of the National Health Service. The NHS has continually changed since its foundation. The changes showed up in different forms. Treatment of the changes, and keeping to them, has been connected with the main function of the NHS: rendering free and unprejudiced health care. The factors affected the NHS in the 1980s and their influence on the health care The NHS was founded in 1948 in order to adjust the out-of-balance conditions in health care provision. Before it was established, only a half the population of the UK had been insured for health care. During the days of its foundation, NHS doctors had received more than 97% of the population. Financed by taxation, it was stipulated that the service would provide with the equal admission to health care (Tuohy 1999:45). Doctors would have a free opportunity to receive or refuse a patient, and the patients, certainly, could change a doctor if they so liked. The 3 operational aims were perceived important to NHS policy: 1) the supply of rational and proper public financing of services; 2) efficient control of funding and distribution of the services; 3) adequate coordination and planning of working load and service provision grounded on an efficacious doctor-patient relationship. There was a hope not just to modify the provision and volume of services, but to modify all the services themselves (Newdick 1995:80). The NHS is organized in accordance with the National Health Service Act 1977 and the National Health Service and Community Care Act 1990. The 1977 Act gives the Secretary of State wide powers to fulfil his or her statutory obligations and a duty to establish regional health authorities (RHAs), district health authorities (DHAs), family health service authorities (FHSAs) and special health authorities (SHAs) in order to promote these purposes. The major functions of these authorities are to advance the policies adopted by the Secretary of State and to commission care on behalf of patients by means of ' NHS contracts' with hospitals (Webster 1998:77). Throughout the 1980s, the government expressed concern at the increases in public real expenditures on health care services. In the period 1978-9 to 1991-2 there was a 22-percent increase in expenditures in real terms, without any perceptible impact on the length of waiting lists for surgery and time spent thereon by patients (Flood 2000:112). There was a concern that without change the aging population and increasing technology would exert continued upward pressure on growth in health care expenditures. In contrast to the government's concern over rising costs, there was a strong outcry, on the part of providers and others, that the NHS was under-funded. Discontent grew amongst providers as growth in public expenditures, historically set at 2 percent per annum in real terms, was curbed over the 1980s (ibid). Whereas the US has consistently spent more on health care than would be predicted from its real level of GDP, the UK has consistently spent less. For example, in 1990, the UK spent 6.2 percent of GDP on health care services compared with an OECD average of 7.6 percent (Button & Roberts 1997:149). This fact coupled with the government's continued desire to cut costs suggests that the UK government has successfully used its monopsony (single buyer) power to control costs. However, stringent cost control is not necessarily a good thing! Stringent cost control may detrimentally affected the quality of the system, or result in cost-shifting, or result in inefficiencies such as losses in improved health care outcomes from slow rates of technology introduction, reduced innovation, or deterring the best and brightest from training to be health care professionals. Let's consider the questions more detailed. Hospitals were given powers to generate revenue for themselves and health authorities were expected to invite tenders from private business for the provision of certain services. In 1987, however, during a television interview the Prime Minister, Margaret Thatcher, announced her intention to chair a working party to reconsider the funding of the NHS. The announcement coincided with the publicity which surrounded a child with a heart defect who was refused intensive care facilities because of shortages of staff and other resources (Loudon et al. 1998:51). The Prime Minister's statement came as a surprise because less than a week beforehand the Secretary of State for Social Services, John Moore, had delivered a major speech on the future of the NHS in the House of Commons in which no reference to such a review was made (ibid). There was nothing new about talk of financial crisis in the NHS. 'The rhetoric of imminent disaster was almost as old as the system itself.' On the other hand, the NHS was (and still is) facing increasing demands on its resources and the decision to review its operation was consistent with similar reassessments of health care systems elsewhere in the world. Two features of expenditure in the NHS prompted the government to reconsider its system of funding (Pierson 2001:217). The first was a method of distributing financial resources to hospitals largely according to the perceived 'needs' of a resident population, to its mortality and morbidity, without considering the 'efficiency' of the hospitals responsible for providing treatment. This became known as the 'efficiency trap' (Newdick 1995:28). Those hospitals which reduced their unit costs and became more efficient were unable to admit more patients because they were limited by their financial allocation. Arguably, hospitals which are funded simply according to the requirements of their population's needs may feel no incentive to manage their funds as effectively as those whose funding is performance-related. Indeed, when there is no relationship between the amount of money allocated to a district and the number of patients it is able to treat, the more efficient hospital appears to suffer a penalty. By treating more patients it spends its allocation more quickly and exhausts its funds before the end of the financial year. One commentator, who influenced the eventual shape of the health service reforms, wrote of the NHS in 1984: The NHS runs on the ability and dedication of the many people who work in it. . . . But other than the satisfaction of a job well done--which I do not wish to minimise--the system contains no serious incentives to guide the NHS in the direction of better quality care and service at reduced cost. . . In the non-competitive NHS, the manager who attempts to implement efficiency-improving changes is more likely to be seen as a cause of problems (cited in Pierson 2001:39). In fact, the structure of the NHS contains perverse incentives. For example, a District that develops an excellent service in some specialty that attracts more referrals is likely to get more work without getting more resources to do it. A District that does a poor job will 'export' patients and have less work, but not correspondingly less resources, for its reward . . . management and consultants in a District risk weakening the case for a new hospital wing they have been campaigning for by solving their waiting list problem by referring patients to other districts with excess capacity . . . [and] GPs have weak or no incentives to reduce referrals. They have neither the incentives nor the resources to make extra efforts to keep people out of hospital (Wall & Owen 2002:102). One solution to this trap is to enable efficient hospitals with spare capacity to offer their services to larger numbers of patients. Obviously, an incentive is required for such a hospital to fund the additional work and logic suggests that the money ought to come from those hospitals which work below full capacity. Those hospitals which achieve most, at least cost and at highest quality, ought to receive more funding than those that do less (Webster 1998:156). The second feature of the system which gave cause for concern was that those responsible for spending had no direct interest in controlling costs. The argument was: so long as GPs and consultants are not asked to account for the medicines they prescribe or the procedures they recommend, there may be a tendency to over-treat patients (Webster 1998:178). Why refuse to prescribe antibiotics to a patient who mistakenly expects that they will cure his cold, or anti-depressants to the patient who, for entirely nonmedical reasons, has good reason to be depressed Not only might it cause the patient upset and distress, but also doctors are increasingly concerned about the time, expense, and anxiety caused by patients' complaints. On one view, it makes more sense to satisfy patient's misplaced expectations than to spend time trying to explain the medical risks associated with pointless treatment (Button & Roberts 1997:157). Both features were thought to work against efficient use of resources. The solution proposed was the creation of an 'internal market' for the National Health Service, in order to enable purchasers of health care (DHAs, GPs and patients) to choose freely between providers (the hospitals), who would thus be forced to compete with one another on price, quality, and value for money. Conclusion The purpose of all the changes represented in the NHS as well as those of the 1980s was to develop the efficiency of the system in general as well as to heighten patient satisfaction providing an element of competition and at the same time saving the benefit of the centrally financed system to control total costs. The experience suggested that those changes were encouraging. Works Cited Button, Wendy J., and Graham Roberts. "Communication, Clinical Directorates, and the Corporate NHS." Journal of Public Relations Research 9.2 (1997): 141-162. Flood, Colleen M. International Health Care Reform: A Legal, Economic, and Political Analysis. London: Routledge, 2000. Loudon, Irvine, John Horder, and Charles Webster, eds. General Practice under the National Health Service 1948-1997. London: Clarendon Press, 1998. Newdick, Christopher H. Who Should We Treat Law, Patients, and Resources in the NHS. Oxford, England: Oxford University, 1995. Pierson, Paul, ed. The New Politics of the Welfare State. Oxford, England: Oxford University Press, 2001. Tuohy, Carolyn J. Accidental Logics: The Dynamics of Change in the Health Care Arena in the United States, Britain, and Canada. Oxford: Oxford University Press, 1999. Wall, Ann, and Barry Owen. Health Policy. London: Routledge, 2002. Webster, Charles. The National Health Service: A Political History. Oxford: Oxford University Press, 1998. Read More