Image: Birmingham Eastside, CC 2.0
Emerging from the ashes of the Second World War, the founding principles of the NHS – free to all, at the point of use, beyond the insurance principle – allowed Britain to win the peace. Universal health coverage - founded across the UK seventy years ago today - gave succour to a sick and dispirited nation, providing the conditions in which Fordist consumer-capitalism could mature by creating a “secret, silent column” of healthy and productive citizens who helped usher in the post-war Keynesian boom. For a nation bowed but unbroken, scuttling its empire in a new age of human rights, it may have seemed reasonable for Aneurin Bevan to proclaim that Britain, with its NHS, now had “the moral leadership of the world”.
This was an era of rapid and momentous change. Little less than a year before, at the stroke of midnight, the nations of India and Pakistan achieved freedom from a dying empire; in 1948, as 4th July turned to 5th, the British people could dream of freedom from fear.
Support for the NHS across the British state
The NHS was the archetypal child of its ideological time. The concept of public healthcare under the NHS model sat atop a new wave of political and economic ideas. Centralised state bureaucracies and Keynesian demand management washed away the failed political economy of the Wall Street Crash and the Great Depression. As Bevan pushed through his plan for a publicly provided rather than ‘publicly organised’ NHS, a former Conservative health secretary asserted that this “would destroy so much in this country that we value”. Precisely the opposite occurred.
However, contrary to some contemporary opinion, this revolutionary turn in the role and functions of government came with broad support from across the British state. This is not to disavow the achievement, merely a reminder that the time for a profound shift in political and economic ideas had come. When it came again, in the late seventies and early eighties, the vanguard of the new order identified themselves almost in direct opposition to what the NHS stood for, the ideas that justified it, and the objective reality it delivered.
The NHS has always been the target of opprobrium from the intellectual evangelists of incongruous market liberalism. This is the case whether they are set to gain from outsourcing and privatisation, or are merely captured by the shadows on the collective cave of our economic discourse. In the case of the former, from its inception, health insurance giants watched the NHS and pumped money into proto-neoliberal think tanks that criticised all facets of Britain’s public healthcare model with gleeful abandon.
proto-neoliberal think tanks that criticised all facets of Britain’s public healthcare model with gleeful abandon
It was in reaction to an attack on the principles of non-fee-paying blood donation that the sociologist Richard Titmuss wrote The Gift Relationship, his seminal exploration of the impacts of pecuniary incentives in social policy. Titmuss warned that the unabashed introduction of markets into previously untouched areas of policy would result in a destructive, pervasive “ideology to end all ideologies”. Into what future would we now head if it was this book that British prime ministers pulled from their bags, slammed onto tables, and over which they declared “this is what we believe”?
Neoliberal revolution strikes
As the post-war consensus fell, practical men, finding themselves quite exempt from intellectual influence, slaved away to deliver the assertions of defunct economists. The theoretical basis of neoliberal economic ideas considers markets the superior means of coordinating allocation of resources under conditions of scarcity. However, when applied to healthcare, market dynamics are profoundly inappropriate. This is not the case with, say, food, where you, endowed with sufficient information on which apple is appropriate for your own needs, can enjoy the benefits of a plurality of apple vendors, each optimising their products and prices to meet market demand. For serious heart problems, even a world-renowned cardiothoracic surgeon would suffer from incomplete understanding of her condition and treatment, opening up information asymmetries with the consultant sitting opposite.
It took until the nineties for the neoliberal revolution to strike the NHS. Market structures were the order of the day as the state sailed heroically into the End of History. The NHS, as with all areas of public provision, was now going to compete – by hell, high-water or penalty imposed from central government. That it has taken until now for the contradictions, inefficiencies and failures of marketisation to be recognised by elements of the political mainstream stands testament to the dangerous paucity of our policy discourse. One cannot look upon the collapse of Carillion and the eye-watering cost of the Private Finance Initiative – £310 billion for assets worth around £55 billion – without concluding that something is profoundly wrong with those economic ideas that justify such cruel, inefficient policies. Where does duty of care come in a contract that allows a private company to charge an NHS hospital£333 for a lightbulb?
Marketisation brings waste, moral hazard and structural risks
The NHS under neoliberalism has failed on its own terms. Firstly, inappropriate and unnecessary marketisation has delivered waste, moral hazard, and, ultimately, exposed the system to structural risks, imposing large costs on the taxpayer through the socialisation of failure. The Centre for Health and the Public Interest estimates that the annual cost of marketisation in the NHS is in excess of £4.5 billion per year, with additional start-up costs of over £3 billion per major market reform. Indeed, the benefits of market ‘reforms’ have always been hotly contested, with opposition across academics and health practitioners, who stress a high opportunity cost in forgone patient care and clinical innovation.
Secondly, privatisation – distinct to the wasteful outsourcing of healthcare provision to private companies – has seen the loss of assets built up over decades and paid for by generations of taxpayers, a particularly vindictive, socially and economically irrational policy. For example, the coalition government famously sold 80% of the UK’s blood plasma resource company to Bain Capital for £90 million, putting the security of blood supplies at risk. Bain soon enjoyed profits in excess of £700 million when the company was subsequently sold to Chinese investors. Into the future, the government is seeking to sell large quantities of NHS land, imposing the opportunity cost of missed public investment in productive assets, such as the construction of much needed hospitals and the installation of renewable energy that could power the NHS and reduce its carbon emissions.
the loss of assets built up over decades and paid for by generations of taxpayers
Thirdly, it has simply been a deliberate political choice to underfund the NHS over a period that now approaches a decade. Over the 2015/16 financial year, NHS trusts and foundation trusts fell into a combined deficit of nearly £2.5 billion, only three years after reporting a surplus of over £500 million. While the changing nature of ill health and demand for services plays a part, this gap has opened up due to a deliberate policy of underfunding: real terms increases in NHS funding were 0.9% a year between 2010-2015, in contrast to an average of 3.7% over its lifetime. There is now a near universal consensus that the NHS is underfunded and that the lack of resource is the greatest contributor to successive crises – something that even the government has begun recognised. In all, health and social care spending cuts have been linked to 120,000 excess deaths.
At best, the justifications for George Osborne’s ‘Age of Austerity’ were the spurious frenzies of a politician appealing to the polluted ideas of a discredited yesteryear to benefit wealthy vested interests. At worst, they have cost lives and halted the inexorable, centuries-long tradition of improvement in public health driven by the noble efforts of British academics and clinicians. Do not forget that life expectancy had been rising continuously for over one hundred years, a trend that has likely faltered because of the political choice to cut public expenditure, with the rate of increase in life expectancy having dropped by almost 50% since austerity began. If medical science has been of the greatest benefit to mankind, uncritical adherence to outworn economic dogma has been of the greatest detriment.
The human cost
For the neoliberal experiment, as in nearly all areas of policy, has imposed a wicked cost on our health. It has damaged systems that seemed to be working moderately well in the past and eroded the institutional basis upon which we can effectively respond to the challenges of the age. Take the future of the digital technology, which could alter social and economic relations at a pace and scale not seen since the Industrial Revolution. The manner in which digital technology is integrated into healthcare in the UK is and will always be a political choice. Smart phones, ubiquitous data collection and machine learning could be harnessed by the NHS to better realise its founding principles, creating possibilities beyond the wildest imaginings of Bevan, Beveridge et al. Instead, the digital frontier is dominated by multinational monopolists and speculators pumping money into consumerist start-ups that flood markets springing up in anticipation of continued underfunding and privatisation. We can do better.
Moreover, the very basis of our healthcare model is being shaken by demographic change and a shift in the nature of ill health. Underfunding is simply unsustainable in the face of these trends. Into the future, environmental change, already described as the greatest threat (and opportunity) to public health, will determine the parameters of our healthcare imaginations. There is no room for systemic waste, fragmented private providers, and the inefficient adoption of innovative technologies in a world that has warmed by 1.5C and in which the majority of soil fertility has been lost.
What is to be done?
What is to be done? Much of a post-neoliberal approach to the NHS must seek to repair the damage done over the last few decades. Primarily, the NHS needs to be adequately funded as part of a wider move away from the discredited policy of austerity. Ill health over the period of fiscal retrenchment has resulted from damage to the systems of the state, encompassing everything from transport to social care, that provide the foundations upon which good health can spring. It will be a tragedy if the number of lives lost during the application of these failed, pre-Keynesian ideas should not banish them forever.
The government’s recent pledge to up NHS spending by an average of around 3% a year to 2023/24 does not do this. It is below the 4.3% annual growth needed to keep pace with demand and much lower than that needed to recover from the damage wrought by the past eight years of underfunding. What’s more, the funding is delayed until next year, opening up a cavern across which the NHS must jump and into which much of it could fall, particularly if another cold winter pushes the service into collapse. The increase also leaves out public health, staff training and building and other key capital investments. It has nothing to say about the cost of debt repayment.
Marketisation can no longer be the first port of call for policymakers, as should be the case across the public sector. This includes needing to handle the growing burden of PFI debts, with options including the centralisation and renegotiation of contracts. Into the future, the social, environmental and economic power of the NHS should be brought to bear, with hospitals acting as ‘anchor institutions’ that provide a local basis for everything from the rollout of clean energy through building energy assets on NHS land, to improving employment standards by targeting local recruitment and procurement. These developments are already occurring, with, for example, some hospitals in London recycling their heat into local housing. Maximising the local socioeconomic role of the NHS could also present a more meaningfully democratised approach to decision-making.
Until then, be wise to what neoliberalism has done and will continue to do to the NHS. Born of war and strife, Britain’s health service celebrates its 70th birthday in a bad way – bowed, nearly broken, ill-prepared to suffer the burden of continued underfunding and held together by the goodwill of staff. All the while, foreign insurance giants watch with patient eyes for opportunities arising from Brexit trade deals. The NHS is about being civilised; as we dismantle it, we become less civilised.
The NHS is about being civilised; as we dismantle it, we become less civilised.
Over the course of the 70th anniversary, the official celebrations shall likely focus on NHS staff. Quite right. But do not forget that the NHS is and has always been about economics, politics and power. It is about multinational corporations getting richer while sick people die in corridors. It is about bright young management consultants repeating failed economic cantations to justify inefficiency. Alone in a society brutalised by years of austerity, the NHS is increasingly the first and last line of care for people up and down the country, and is kept going by the blood, sweat and tears of its staff.
The NHS is no longer national. Fragmented and sucked dry of resources, it cannot invest in responding to modern health problems. The NHS is increasingly becoming a logo under which private enterprise may suckle on the teat of the state, growing fat off our taxes. The predicament of the NHS at 70 is the result of a concerted application of failed economic ideology. Neoliberalism’s legacy is the private ambulance provider who bungles an emergency call because their staff are under-trained and poorly equipped; it is the baby who dies in the night, away from their parents, as the private provider of an out-of-hours service fails to adequately respond. Stand this no longer. If the Labour Party are to enter government in the near future, a test of their willingness to deliver a new society will be whether they create a post-neoliberal NHS.
The NHS can be all that its staff and its patients believe it to be. A harbour in which fear is kept at bay, in which everyone maintains the right to be relieved of the pressures of ill health. In the final analysis, the crisis of neoliberalism is inherently a political crisis founded on the inadequacy of a certain set of economic ideas. In the same way that the NHS has always proven there is an alternative, the orthodox approach to healthcare policy proves that we need, now more than ever, an alternative to neoliberalism.
This essay is a modified version of an article published in the Mint.