These questions go to the heart of what democratic planning looks like in practice anywhere, not just with respect to healthcare. For if we want a more egalitarian system to apply the best of human technical knowledge more effectively, without having to sit through interminable meetings or cast an unending string of votes, then we’ll have to give up some decision-making power—whether to experts, (elected) managers or representatives. At the same time, while healthcare should be delivered by experts, it should not be run exclusively by them. The question of whether people should be passive consumers of medicine or instead its active cocreators is a common theme throughout the history of public healthcare, wherever it has emerged. Veteran British physician Julian Tudor-Hart describes the seeds of transformation later developed by the NHS: “This embryonic new economy at the heart of the NHS depends on the growth of an element it always contained, which has only recently, and slowly, been recognized: the power and necessity of patients as co-producers … Once released from deference, public expectations become an irresistible force, providing initial elements of democratic accountability can be retained and rapidly extended.” This is a call for a new system—one based on mutual accountability, democratic control over resources and input in decision making from all affected—a struggle already taken up by British workers in the early twentieth century.
The Second World War transformed everything, not least the prospects for true public healthcare. As war engulfed Europe, the British government introduced planning across major sectors of the economy. There were limits on markets, including the market for healthcare. Profit, while ever present, was at least within certain bounds, temporarily made secondary to the goal of winning the war. In this darkest of times—this “midnight in the century,” as libertarian socialist Victor Serge described the period—the whisper of new, more democratically planned institutions was a signal of what was possible. The government-run Emergency Medical Service (EMS) demonstrated to ordinary people that medical provision could be allocated according to human need—even the skewed and limited set of needs dictated by war conditions—instead of for private gain.
The British working class emerged from the war emboldened. Planning had worked. Capitalists were forced to sacrifice profit to win the war, and the system didn’t collapse. The country needed rebuilding, and the war had also shown that with enough intervention into the economy, everyone who needed a job could get one. This sense of potential propelled the Labour Party to a landslide in elections held at war’s end. Labour’s program was reformist but sweeping: the institutions of a new, extensive welfare state would hem in the market. Although it would take until 1948 to be officially established, the new National Health Service was the postwar government’s greatest achievement. Healthcare was made free at point of service, paid out of taxation and universally available. Distinct from some other public healthcare systems, hospitals were not merely publicly funded but nationalized.
Doctors, led by the British Medical Association (BMA), protested ferociously at the coming public system, afraid of losing their privileges. They called Bevan a “medical Führer,” and the NHS “creeping Nazism.” They threatened to paralyze the new system. But with medicine still a lucrative profession and public opinion firmly against them, the doctors’ threats were mostly hollow. Nye Bevan, who had experienced firsthand the system of medical mutual aid in Tredegar, the Welsh mining village where he was born, declared: “We’re going to Tredegarize you.”
The BMA did, however, win on one point. Labour had resurrected the old demand of the friendly societies—that doctors become salaried public servants, rather than independent small-business people that contracted with the state—but the BMA insisted doctors remain an independent power, formally beyond the remit of immediate democratic direction. In the face of the BMA’s dogged opposition, Bevan ultimately conceded that family doctors, unlike those in nationalized hospitals, would remain independent contractors—“ stuffing their mouths with gold” in his words. Within a few months of the NHS being established, the vast majority of doctors, however reluctantly, signed up. Public planning won out over private interests.
How the NHS Planned
The first task of the early NHS was turning an inadequate patchwork of clinics, hospitals and other services into a functioning, properly joined-up and universal public healthcare system. Early planning was rudimentary. In 1948, while the UK, like much of Europe, was still recovering from the bombardments, demolitions and ruination of the war, detailed statistics were effectively nonexistent. The world’s first truly universal (as opposed to specialist) computing device, the Small-Scale Experimental Machine (SSEM) at Manchester University, ran its first program on June 21 of that year. By the end of the 1949, the world was home to a total of still just four similar devices, and even these were in stubbornly tentative operation. Widespread computer use was still decades away. The Ministry of Health set budgets and priorities but planned little else. Annual budgets for hospitals were very simple: take the previous year’s numbers and increase them by however much the entire NHS budget was increasing. The NHS did grow, but this method of annual, proportional increases locked in and perpetuated inequalities that existed on the eve of its creation.
Much like today, where less populated regions suffer a lack of high-speed internet because telecommunication companies cherry-pick the most profitable areas to service (and let the rest of a country rot, for all they care), great chunks of the country came into the era of the NHS hospital-less, or at best with hospitals in poor shape, a situation that would not be corrected for years. The first major planning initiative at any serious scale would not come till the 1960s. Its aim was precisely to tackle these inequalities by building more and better hospitals, especially in poorer areas. The 1962 Hospital Plan of the then–Conservative government was a grand promise, but it almost immediately ran into chronic underfunding—presaging much of the history of the NHS to come.
A decade later, however, under another Labour government, meaningful planning appeared to be on the horizon. In policy documents, the aspirational goal of the NHS was now “to balance needs and priorities rationally and to plan and provide the right combination of services for the benefit of the public.” In practice, three changes pointed to the potential for more thoroughgoing, democratic planning.
First, the NHS expanded the horizons of health. A reorganization in 1974 created “Area Health Authorities,” whose boundaries neatly coincided with those of local governments. AHAs were intended to better integrate healthcare into local planning of other kinds, whether this meant sewers, roads, community centers or schools. The potential was, in principle, enormous: healthcare could be more than just a reaction to illness and begin to have bearing on those broader social determinants of health.
The same 1974 reform changed how healthcare was managed. New local management teams integrated the three parts of the NHS that had been run independently since 1948: hospitals, family medical clinics, and community health centers for the elderly and those with severe mental health difficulties. For better or for worse, these teams made decisions by consensus (extending something that had been part of the NHS since its founding in the three-person consensus boards, consisting of a doctor, a manager and a nurse, that ran individual hospitals). Working alongside these consensus management teams were “Community Health Councils.” Local organizations representing seniors or the disabled were given the right to elect one-third of each CHC’s members. When created, CHCs had no direct decision-making authority, but they held genuine promise to democratically transform the NHS. With community representation, CHCs showed that it was possible to open the opaque NHS hierarchy to bottom-up voices of patients and citizens.
Finally, in 1976, the NHS committed to distributing resources in line with health needs, a potentially radical transformation. Taking into account regional differences in age and morbidity, the Resource Allocation Working Party (RAWP) greatly expanded upon past faltering attempts to correct baked-in inequalities
from the pre-NHS era. Regions with bigger needs (which were often poorer as well) would now receive bigger budgets. The Priorities for Social Health and Service document, from the same year, incorporated rationing and priorities into the budgets set by the central NHS. By identifying key areas of spending, the politicians and managers who ran the service could finally wean doctors from some of their inherited power in a way that Nye Bevan had only dreamt of.
The reforms of the 1970s maintained a naive faith in top-down technocrats, reinforcing the paternalistic notion that expertise can overrule democracy that had also in part animated the creation of the NHS—one shared by both Labour and Conservative politicians. Many of these reforms simply created new layers of citizen-phobic, under-democratic bureaucracy. But these reforms also carried in them the seeds of a more radical remaking of the NHS. Rather than planning only how much healthcare there was, and where—the important questions that the 1960s planners had to tackle first—these reforms could also have laid the groundwork for planning that tackled how healthcare was produced and, most importantly, who participated in decision making.
However, instead of ratcheting up democracy within the system, most of the 1970s reforms failed in the face of brewing economic crisis. The oil shock of the early 1970s saw both prices and unemployment spike at the same time—something that economists of all mainstream stripes had said was no longer supposed to happen. The regime of boom and bust was supposed to have been solved by Keynesianism, delivered by the postwar compromise between capital and labor. In response to the new crisis, throughout the 1970s and early 1980s, elites in the UK (as in the United States and much of the West) launched an assault on the postwar economic settlement that had guaranteed higher wages and expansive public services for workers in exchange for high growth rates and high profits for business. With profits threatened, higher wages and expanding public services came under attack from the right in the UK and across the global North. UK unions launched one last major strike wave, which reached its height in 1979. It wasn’t enough. Worker expectations for more and for better were firmly in the crosshairs when the most right-wing Conservative government since the war, led by Margaret Thatcher, came to power that same year. The tide had turned against the welfare state; capital had decided it was time to break the postwar compact with labor.
The reforms of the 1970s fell, one by one, to the Right’s vision for healthcare. Norman Fowler, Thatcher’s secretary of state for health, scrapped the area health authorities in 1982, before they even had a chance to integrate with local governments. A year later, Fowler eliminated management by consensus and reinstated individual responsibility for managers, calling the policy “general management.” Community health councils outlasted AHAs by two decades—scrapped in England only in 2003—but even as they were allowed to limp on, they remained, more than anything, a vague protest body. The RAWP formulas stayed, but the principles behind them were soon transformed, by New Labour this time rather than by Conservatives. Under Labour Prime Minister Tony Blair, metrics that had been aids in planning slowly transmogrified into performance targets for managers.
Over the course of the 1980s, a business ethos crept into the NHS. It didn’t come out of nowhere: the right’s once-marginal ideologues had long blamed all NHS shortcomings on misspent budgets and a lack of “choice” by patients. While the problems of poor services and long wait times were real, fears about “out-of-control” budgets were largely manufactured. The NHS had been massively underfunded. Spending on health as a percentage of GDP had started out at a measly 3 percent of GDP in 1948, growing only to around 6 percent by the 1980s. At the time, France was spending about 9 percent of GDP on healthcare, and Germany 8 percent; thus, the NHS was and remains a relative bargain.
Even in 2014, the UK spent just over 9 percent of GDP on healthcare, still below the average for countries in the global North. By comparison, the market-based system in the United States consumes nearly double that figure, 17 percent of GDP, while still denying care to millions—a paragon of economic inefficiency. The right’s counterargument—that any budget, no matter how big, would never be enough—falls flat. Health budgets have remained relatively stable, except in the one country in the Organisation for Economic Co-operation and Development (OECD) that maintains a mostly private system.
But even 6 percent of GDP is still a big slice of the economy that holds relatively little opportunity for profit. Right-wing hand-wringing about cost control provided cover to the healthcare corporations that would gain, even if only part of the NHS were sold off. The barrier to overt privatization was that the NHS regularly topped polls of the most trusted institutions among the British electorate. Famously, even neoliberal revolutionary Margaret Thatcher had to promise that “the NHS is safe in our hands” in a speech to her own Conservative Party convention in 1983. But by 1988, when Thatcher announced a major review of the NHS, nearly a decade of hard-right rule and a much longer ideological battle against the welfare state left these words increasingly hollow.
Three years later, Thatcher’s successor as prime minister, John Major, introduced the biggest reform in the history of the NHS: the “internal market.” Although the Conservatives couldn’t put the NHS onto the market, they found a way to put the market into the NHS, with an end result that was neither fish nor fowl.
The big change was termed the “purchaser-provider split.” Before this reform, a doctor would refer a patient to a local hospital or clinic for any further service, such as a blood test, hip replacement or liver transplant. The NHS paid the doctor and funded the hospital, so no money explicitly changed hands between the two. Under the internal market, akin to the Sears debacle described earlier in the book, hospitals and community care clinics “sell” services. They are the providers. Doctors, local health authorities or other NHS agencies are purchasers who in turn “buy” these services in the name of their patients.
Over the course of the 1990s, a Labour-Conservative consensus around the allocative efficiency of markets and competition replaced the postwar consensus around planning and public service. Margaret Thatcher reportedly called Tony Blair—elected in 1997 as the first Labour prime minister since the 1970s—her greatest achievement. Nominally center-left, his business-friendly, pro-market New Labour government worked to expand the Conservatives’ market reform (although at this point only within the NHS in England, as Scotland, Wales and Northern Ireland were given more autonomy and largely turned away from market reform). In the English NHS, purchasers, now called “commissioners,” became fully independent of the NHS hierarchy, thus attenuating voter accountability. Alongside more markets, New Labour also created new institutions, such as the Monitor and the Care Quality Commission, to act as market regulators. In almost every case, such independent “expert” bodies were formally public bureaucracies, rather than market actors—not unlike independent central banks or the European Commission—nevertheless, they represented ever more impaired responsibility to voters, despite their location within the state. Once again, the Venn diagram of the set of state agents and the set of democratic agents shows overlap, but not coincidence, between the two. Public ownership does not by itself mean democratic ownership; and, as shown by the NHS’s market reforms, public ownership may not even mean decommodification. The state now oversaw a fragmented system rather than planned one that was more unified.
With the door to wholesale market transformation cracked, David Cameron’s post-2010 coalition of Conservatives and Liberal Democrats pushed it wide open. Their 2012 Health and Social Care Act now extended access to explicitly forprofit providers and introduced competition over commissioning contracts themselves—a contract for who gets to sign other contracts. By this time, even the British Medical Association—the same doctors’ organization that had initially fought Bevan to maintain space for private business and professional privileges—was now standing up to reforms that would be a gateway for healthcare corporations first to cherry-pick, then to take over, large sectors of the NHS. I
n the years immediately following this overhaul, over 10 percent of total NHS spending already went to for-profit providers.
Against the Market
The story of the NHS since the 1990s is not just one of a conflict between planning and markets; it is also a reminder that markets need to be made and sustained, a point well understood by the neoliberals who set out to do just this. Markets are human creations; indeed, Adam Smith’s prehistory of plucky Neolithic humans getting by through “truck and barter” is as inaccurate as the creationist Eden where humans rode dinosaurs. Rather than being natural and inevitable, markets are a planned institution. The NHS is a perfect example of such conscious effort going into the creation of something that is ultimately antidemocratic—where the strength of your voice is the size of your wallet—not to mention anarchic and often irrational. Three decades on, the central NHS is increasingly a rudderless vehicle for handing out money, as system-wide planning has eroded away. Competition was supposed to make the NHS more efficient, increase the quality of services and give patients a voice. On all counts, however, it has done little; and instead it has undermined the basic values of the NHS—that healthcare be universal, accessible and free.
Market reforms introduced plenty of new costs. Ostensibly about slimming down government bureaucracy, the dense jungle of contracts between providers and purchasers in fact required armies of new bureaucrats. Even by 1994, three years into the internal market, the NHS had hired 10,000 new managers. While administration costs made up just 5 percent of the total NHS budget in the 1980s, by 2005 they had nearly tripled, to 14 percent of the total. On these simple measures, planning was several times as efficient as the market. A 2014 report from the UK’s Center for Health and the Public Interest put the cost of just running the internal market itself at an estimated £4.5 billion per year—enough to pay for dozens of new hospitals.
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