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Gareth Jenkins

On the critical list

(April 1994)

From Socialist Review, No. 174, April 1994.
Copyright © Socialist Review.
Copied with thanks from the Socialist Review Archive.
Marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Attacks on health funding and closure of hospitals are continuing despite Tory protests that they are spending more on the health service. Gareth Jenkins looks at the facts and Labour’s alternative

Anyone who uses the National Health Service knows the reality of long waiting lists, ward closures and an increasingly decrepit service.

Yet the Tories in general, and Virginia Bottomley in particular, continue to stress that more money than ever is going into the National Health Service.

So what is happening? Are the Tories pumping money into the NHS? And what is the effect of their reforms? Labour has pledged to ‘set aside the chaos and waste of the internal market and to take up the challenge of a health service for the new millennium.’ But will it?

First, the funding question. The Tories are right when they say that expenditure on the NHS has been rising. Since the early 1980s gross NHS expenditure has risen from £16.3 billion (1983–84) to £33 billion (1991–92) and is projected to rise to £40.6 billion by 1995–96. Even if we express that as a percentage of gross domestic product, the amount spent on the NHS has still risen – from 5.3 percent in 1983–84 to 5.7 percent in 1991–92 (the projection for 1995–96 remains at 5.7 percent).

The doctors’ British Medical Association (BMA) has been forced to admit that in the context of the government’s attempt to control public expenditure, health has done relatively well. ‘Health expenditure as a percentage of general government expenditure (excluding privatisation proceeds) has increased steadily so that between 1978–79 and 1991–92 it has improved its share from 10.4 percent to 12.9 percent.’

There is no particular mystery as to why this has happened. The Tories are acutely aware of the perils of an all out assault on the NHS – and not just for electoral reasons. They only have to look across the Atlantic to see the dangers of letting private medicine run rip. Far from decreasing health costs, the opposite occurs. The US spends 12.2 percent of its gross domestic product on health. The rising cost of this policy is beginning to make recession hit industry squeal with pain. Even so, the figures the Tories brag about are highly misleading. They do not spell out whether the increase is enough nor whether it is being spent on the right things.

One obvious test is to compare Britain with other advanced countries. Britain is clearly low down the international league of advanced countries. It spends less proportionately than any of its European Union partners. It devotes 6.2 percent of its gross domestic product on total health care expenditure. That is 1.7 percent below the average for the OECD countries (7.9 percent).

There are fewer doctors per head of the population. Britain has only 1.4 specialist doctors for every thousand of the population. France, on the other hand, has 2.6, Belgium 3.3 and Germany 2.9. And for every £5 spent by these countries on health care Britain spends £2 less.

Using this benchmark of international comparison the BMA reckoned last October that Britain ‘could and should be spending around another £4.5 billion on the NHS’. This calculation, it should be remembered, is no starry eyed socialist estimate – it simply compares this country with other capitalist nations of the advanced world.

Then there is the question of what the extra money has been spent on. Between 1990–91 and 1991–92 the total gross expenditure on the NHS went up by over £3 billion. After deducting the increases in prices and pay, a record £l. l billion of development money remained. It could have been spent on patient care. In fact, much of it wasn’t. The exercise to review how the NHS expenditure was spent alone absorbed nearly £400 million. The trust hospitals and GP fundholders also kept some money back (though how much has not been disclosed).

Far from eliminating waste by introducing the cut and thrust of the market the whole new system of management has itself spawned a far more wasteful and greedy bureaucracy than ever existed before.

That is evident not just in the scandalous rise in top management salaries which hit the headlines earlier this year. The Labour Party has calculated that the increased costs of management and accounting that followed the introduction of market style competition have doubled since they were last in office:

‘Nearly 11 percent of the NHS budget is now spent on administration, compared with 6 percent before the Conservatives came to power. Even since 1979, annual bureaucratic costs have increased by 110 percent from £1.44 billion to just over £3 billion.’

And most staggering of all: ‘NHS senior management costs have risen 1,800 percent since 1987, from £25.7 million to £494 million in 1992.’

That might be bearable if there had been a comparable rise in money going to patient care. Instead the opposite is the case.

‘Since the Conservatives came to power in 1979, one in five hospitals have closed and one in three beds have been lost. In addition, the number of nurses in training has been cut by almost 20 percent in the present financial year [1993–94].’

But if nurses have lost out, administrators have not:

‘Since the imposition of the government’s changes the number of nurses employed in Britain has been cut by 27,000, while those designated to senior management, administrative and accountancy posts has increased by 36,000. The spending on cars for senior management has risen by 30 percent to £70 million in the last year alone.’

Little wonder that people’s experiences differ so markedly from the rosy picture drawn by Virginia Bottomley and that opinion polls give the government a 13 percent confidence rating and the secretary of state the lowest sincerity rating out of all the Tory ministers.

Little wonder too that the government has resorted to the most elaborate smokescreens to disguise this reality. Where once success might be reckoned in terms of numbers of patients entering and leaving hospital, now we have it reckoned in numbers of ‘episodes of care’ – which can amount to no more than a patient moving to a different ward (or even a different bed in the same ward!) after an operation.

Waiting lists are also being deliberately distorted. The government has invented the notion of getting onto a waiting list to see a consultant for the first time as a way of claiming real improvements. There is now an all time record of over one million on the waiting list – an increase of more than 100,000 since the last general election.

The reality of what the Tories have done to the NHS became painfully clear to thousands of people when routine surgery in hospitals up and down the country had to be cancelled last autumn because the contracts had run out and there was no money for the rest of the financial year. All Virginia Bottomley could say was that hospitals hadn’t paced themselves properly.

Even the flagship of the new trust system of hospital, designed to pull the NHS out of stagnation, has been sunk. Guy’s Hospital in south London is to be shut, its specialist services transferred elsewhere, leaving behind a brand new state of the art building worth £140 million.

The introduction of fundholding for GPs, which was also trumpeted as improving patient care, is resulting in a two tier service. Fundholding is an idea imported from the US, where a tendency to shy away from taking patients who are going to demand a lot of health care in exchange for little money and to concentrate on patients who will leave a surplus at the end of the day is common.

The Bristol model is producing its own version of this problem. As resources are squeezed, the fundholding GP takes precedence over the non-fundholding, traditional GP. The Tories deny this happens but a BMA and Labour Party survey in December last year showed that ‘two out of every five hospitals across the country were offering preferential access to treatment for GP fundholders’. Even the president of the Association of Fundholding Practices has warned that unless extra funding is provided he would not accept patients with learning disabilities.

Health is a class issue. The gap between rich and poor has grown since the Tories came to power in 1979. The incomes of the poorest 10 percent of families have fallen by 14 percent. The incomes of the top 10 percent have risen by half again. Infant mortality for the richest in Britain is five per 1,000 live births, for the poorest it is 11 per 1,000. Ill health affects just under 30 percent of the richest but nearly 50 percent of the poorest.

The imposition of VAT on fuel will lead to an estimated extra 2,500 deaths in winter. The Department of Health’s own statistics show that every 1 percent increase in unemployment shows an increase of between 0.2 and 0.5 percent in prescriptions.

As Labour’s document on health proves, unless the causes of ill health themselves are tackled there can never be an adequate health service.

In the mid-1940s, in the wake of the Beveridge Report, the demand for a national health service was not just about providing free medical care. It was about proper protection from cradle to the grave; about prevention as much as cure; about tackling unemployment, housing and welfare. The idea of free health care had at its centre the need to abolish the distorting effect of profit on the quality of people’s lives. In short it was about the need for socialism.

Then British capitalism was prepared to go some way in allowing a strong element of socialisation to enter private medicine – if only to make sure that a relatively healthy workforce, having won the war, could now rebuild the economy. Today British capitalism neither wants nor is able to make the kinds of concessions it made in the late 1940s. So Labour faces a more acute choice at a time when defending and improving the NHS is more urgent than ever.

Yet about the only concrete thing Labour promises to do is to abolish fundholding and abolish tax relief on private insurance. Much of what else it has to say is concerned with generalities. It says it will abolish waste and improve democracy. But on the vital issue of extra cash its voice is muffled. Whether it will commit itself even to the type of money the BMA thinks necessary, let alone the money required to meet needs, is unclear.

That is not just because Labour buckles under the Tory taunts of where is the money going to come from. It is because increasingly Labour has accepted the priorities of the system, including the idea that the market can be persuaded to provide. This is a retreat even on 1945, when at least Labour was prepared to use the state to reorder priorities.

Everything Labour points to as inseparable from tackling the causes of ill health also points to the need for socialism. In its own distorted way that was recognised in the 1940s. The fact that nothing comparable is raised today shows how little Labour will in effect be able to halt the offensive against the NHS.

It will be down to those who work in and use the service to fight. That fight is part of the struggle for something much larger: the creation of a genuinely free society in which no one will be prevented from developing their potential because of lack of health care.

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