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    The House of Lords Select Committee on the Long-term Sustainability of the NHS has slammed the ‘short-sightedness’ of successive governments for failing to plan effectively for the long-term future of the health service and adult social care.

    The long-term future of the NHS is an increasing public concern, with a record 55% of people saying they expected the NHS to deteriorate over the longer term.

    The Committee makes it clear that a tax-funded, free-at-the-point-of-use NHS is the most efficient way of delivering health care and should remain in place now and in the future. For that principle to remain, however, many aspects of the way the NHS delivers healthcare will have to change. 

    The Committee concludes that “a culture of short-termism” seems to prevail in the NHS and adult social care and that the Department of Health has been unwilling or unable to look beyond the next few years. It recommends that a new, independent Office for Health and Care Sustainability should be established to look at health and care needs for the next 15-20 years and report to Parliament on the impact of changing demographic needs, the workforce and skills mix in the NHS and the stability of health and social care funding relative to demand. A political consensus on the future of the health and care system is “not only desirable, it is achievable” according to the Committee and they call on the Government to initiate cross-party talks and a meaningful \”national conversation.”

    The Committee says that in the past funding has been “too volatile and poorly co-ordinated between health and social care.” This has resulted in poor value for money and resources being allocated in ways which don’t meet patient needs. In the future health funding will need to increase at least in line with growth in GDP, and NHS financial settlements should be agreed for an entire Parliament to enable effective planning.

    Pressures in social care now pose a significant threat to the stability of the NHS so the Government needs to embark on a far more ambitious three-year programme to stabilise publicly-funded social care. The Committee asserts that, beyond 2020, a key principle of the long-term settlement for social care should be that funding increases reflect changing need and are, “as a minimum, aligned with the rate of increase for NHS funding.”

    The report says that the failure to implement a comprehensive long-term strategy to secure the appropriately skilled, well-trained and committed workforce that the health and care system will need is, the “biggest internal threat to the sustainability of the NHS.” The report highlights the problems of over-burdensome regulation, unnecessary bureaucracy, a prolonged period of pay restraint, low levels of morale and retention problems.

    The Committee points out that service transformation is at “the heart of securing the long-term future of the health and care systems.” They argue that the model of primary care will need to change, secondary care will need to be reshaped and specialised services consolidated further. A renewed drive to realise integrated health and social care is badly needed. 

    The Committee makes 34 recommendations for change including: 

    ·    The health and social care systems are interdependent but poorly-coordinated. To allow money and resources to be used more effectively the budgetary responsibility for adult social care at a national level should be transferred to a new Department of Health and Care.

    ·    The traditional small business model of GP services is no longer fit for purpose. NHS England should engage with GPs to examine alternative models including direct employment

    ·    Policy is now increasingly focused on integrated, placed-based care and so NHS England and NHS improvement should be merged to create a new body with simplified regulatory functions and strong local government representation.

    ·    There is an indisputable link between a prolonged period of pay restraint, over-burdensome regulation and unnecessary bureaucracy and low levels of morale and workforce retention. The Government should commission an independent review to examine the impact of pay on morale and retention of health and care staff.

    ·    There is a worrying lack of a credible strategy to encourage uptake of technology and innovation in the NHS. The Government should do more to incentivise the take-up of new approaches and make clear that there will be funding and service delivery consequences for those who repeatedly fail to engage.

    ·    Cuts to funding for the public health budget are short-sighted and counter-productive. National and local public health budgets should be ring-fenced for at least the next ten years. We also need a new nationwide campaign to highlight the dangers of obesity.

    ·    The Government should be clear with the public that access to the NHS involves patient responsibilities as well as patient rights. The NHS Constitution should be redrafted to emphasise this.

    Commenting, Lord Patel, Chairman of the Committee, cross bench peer and eminent obstetrician said: 

    “The Department of Health at both the political and official level is failing to think beyond the next few years. There is a shocking lack of long-term strategic planning in the NHS. This short sightedness stems from the political importance of the NHS and the temptation for politicians to reach for short-term fixes not long-term solutions.

    “To solve this we need a new body that is independent of government and is able to identify clearly the healthcare needs of a changing and ageing population and the staffing and funding the NHS will require to meet those needs. This new Office for Health and Care Sustainability should be a trusted, independent voice as the Office for Budget Responsibility has become on economic forecasting and on public finance matters. It will need to look ahead and plan for 15-20 years into the future.

    “We also need to recognise the NHS will need more money. NHS spending will need to rise at least as fast as GDP for 10 years after 2020. One area where more spending will be required is on pay for lower paid staff. We are in an increasingly competitive international market for health professionals and a decade of pay constraint in the NHS has damaged morale and made it difficult to train and recruit the staff we need.

    “We have heard much about the need to integrate health and social care and we think the best way to do that is make the Department of Health responsible for both health and adult social care budgets. We also think it is time to look at the way care is delivered. This may well involve changing the model where GPs are self-employed small businesses.  Delivering health care fit for the 21st century requires improvement in primary care to relieve pressure on hospitals. That change should be delivered by GPs.”


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    A repeated claim made by politicians and a justification for the Health and Social Care Act 2012 is that the NHS is ‘unsustainable’ in its present form because the UK’s ageing population is increasing costs to levels that we can no longer fund from taxation. But this is a myth. While the proportion of the population aged over 65 years is increasing in most of the developed world as people live longer, there is no evidence for the claim that ageing itself will lead to a funding crisis. Rather, the NHS funding crisis is due to cuts in funding for the NHS and social services coupled with the high costs of marketisation and privatisation leading to service closures such that NHS funded services including GP services and out of hours services and hospital services are no longer meeting needs.

    Reductions in funding and budgets for social services and long-term care and reductions in local authority provision add to the strain on NHS services. The volume of services provided is shrinking and these are not keeping pace with need. The amount spent on social care services for older people has fallen nationally by £1.4 billion (8.0%) from 2010-11 to 2012-13. The number of people receiving state-funded care fell from 1.8 million in 2008-9 to 1.3 million in 2012-13.

    According to Age UK, in the three years between 2010-11 and 2013-14:

    • Numbers of older people receiving home care have fallen by 31.7% (from 542,965 to 370,630).
    • Day care places have plummeted by 66.9% from 178,700 to 59,125.
    • Spending on home care has fallen by 19.4% from £2,250,168,237 to £1,814,518,000.
    • Spending on day care has fallen even more dramatically by 30% from £378,532,974 to £264,914,000.

    Older people are living longer, healthier and more productive lives

    The extent, speed, and effect of population ageing has been exaggerated by the government because the standard indicator—the old age dependency ratio  ( The old-age dependency ratio is the ratio of people older than 64 to the working-age population, aged 15-64) — does not take account of the fact that people aged over 65 years are younger, fitter and healthier than in previous decades. In fact older people have falling mortality, less morbidity, and are more economically active than before. Some forms of disability are postponed to later years.

    Currently over one million older people are still working, mostly part time, many with valuable experience or specialist knowledge. The spending power of the ‘grey pound’ has risen inexorably. Many do volunteer work vital to the third sector or look after grandchildren.

    Older people aged over 65 contribute more to the economy than they take out. It is estimated that taking together the tax payments, spending power, caring responsibilities and volunteering effort of people aged 65-plus,older people contribute almost £40 billion more to the UK economy annually than they receive in state pensions, welfare and health services.

    Most acute medical care costs occur in the final months of life, with the age at which these occur having little effect. It is not age itself, ‘but the nearness of death’ or health status of the individual in the ultimate period in the last few years or even months before death that matter most. According to this hypothesis health expenditure on older age groups is high, not so much because their morbidity or disability rates are higher, but because a larger percentage of the persons in those age cohorts die within a short period of time.

    Similar findings have been reported in other European countries where by 2008 it was shown that ‘contrary to popular belief, ageing is not an inevitable and unmanageable drain on health care resources.’ Indeed one study suggested that the cost of death declines with age because older ‘people tend to be treated less intensively as they near death.’ In fact, it is those dying between the ages of 50 and 60 who cost the most. If the cost of death declines with age then an ageing society could lead to lower health care costs.

    Life expectancy is an estimate of average expected life span, healthy life expectancy is an estimate of the years of life that will be spent in good health. The trend for healthy life expectancy at 65 in England for males and females has increased approximately in line with overall life expectancy at 65. For example, between 2006 and 2009, healthy life expectancy increased by 0.8 years for females and 0.5 years for males while overall life expectancy grew by 0.6 years for females and 0.7 years for males. This suggests that the extra years of life will not necessarily be years of ill health. There are important socio-demographic differences in healthy life expectancy. Not only can people from more deprived populations expect to live shorter lives, but a greater proportion of their life will be in poor health.

    When measured using remaining life expectancy, old age dependency turns out to have fallen substantially in the UK and elsewhere over recent decades and is likely to stabilise in the UK close to its current level. It is not age but nearness to death that accounts for health expenditure.

    Increased life expectancy means more years lived in good health.

    Politicians must stop blaming older people for their decisions to cut funding and close services

    The false premises of the ageing hypothesis provide a technical rationale for starving the NHS of funds. In July 2013 NHS England warned of a funding gap ‘of around £30 billion between 2013-14 and 2020-21’. A Lords select committee , the Office for Budget Responsibility , the Nuffield Trust and the Institute for Fiscal Studies published health spending projections on the assumption that ageing is a main driver of cost rises. The studies mainly relied on simple population projections. The connection between ageing and costs and chronic illnesses was simply assumed. They did not consider the fact that people are living longer, healthier and more productive lives.

    So the most remarkable thing about the ageing hypothesis or ‘demographic time bomb’ is its survival. The Canadian economist Robert Evans has described it as a ‘zombie theory’, one that refuses to die. It survives today only as a reason for explaining politicians’ bad policy decisions which have resulted in pressures on the NHS: as an alternative to the real reason which is the cutting of health budgets, and services for health care.

    In the UK, both the Royal Commission on Long Term Care (the 1999 ‘Sutherland report’) and the Wanless Inquiry (2001-04) rejected the ageing thesis. The 1999 Royal Commission found that, even though ‘the population aged 80 or over is growing rapidly and appears likely to continue to do so’, the UK was not on the verge of a “demographic time bomb” as far as long-term care is concerned and as a result of this, the costs of care will be affordable.’

    Wanless concluded: ‘Despite this significant ageing of the population, demographic changes have so far accounted for a relatively small proportion of the increase in spending on health care in the UK. While overall spending (between 1965 and 1999) grew by 3.8 per cent a year in real terms, the demographic changes alone required annual real terms growth of just 0.5 per cent a year. Less than 15 per cent of the growth in health care spending over the past 35 years can therefore be attributed to the cost of meeting the needs of an ageing population. This is in keeping with findings from other countries.’

    In Canada the Evans paper on the Romanow report into future health care costs declared: ‘All studies come to the same conclusion. Demographic trends by themselves are likely to explain some, but only a small part, of future trends in health care use and costs and in and of themselves will require little, if any, increase in the share of national health resources devoted to health care.’

    The European Commission report of 2010 found that it was ‘the health status of an individual (and – in aggregate terms – of the population), rather than age itself, which is the ultimate driving factor’ behind cost rises. Furthermore, ‘Over time, there is no clear link at the aggregate level between levels of spending on health care and the demographic situation of societies. In fact, several studies have found that the impact of ageing on increase in health expenditures is limited to as little as a few percentage points of this increase.’

    The connection between ageing and health care costs has also been rejected in studies and parliamentary reports in the USA, Canada, Germany and Australia.

    Examples of the ‘Zombie theory’ and how it is used to justify policy choices:

    “We’ve got a growing and ageing population now and this is having a significant impact. It’s down to the policy-makers to decide whether to change the policy or not.”  Rupert Egginton, director of finance at the Nottingham University Hospitals NHS Trust

    “An ageing population with more chronic health conditions, but with new opportunities to live as independently as possible, means we’re going to have to radically transform how care is delivered outside hospitals.” Simon Stevens, Chief Executive of NHS England

    “However, if the NHS is to meet the needs of an ageing population we need it to be more efficient so it can provide more and better treatments.” Lord Howe, Parliamentary Under-Secretary of State for Health

    Trends in numbers of people aged over 65 years and mortality rates and number of deaths:

    ageing population

    Figure 1: Age-Specific Mortality Rates, 1963 and 2013, England and Wales (Source: ONS24

    Figure 2: Age-standardised mortality rates (ASMRs) in England and Wales, 1942-2012 (Source: ONS25)

    Figure 2: Age-standardised mortality rates (ASMRs) in England and Wales, 1942-2012 (Source: ONS)

    ageing population

    Table 1: Number of deaths registered in England and Wales, 2004-2013 (Source: ONS)

    Age structure of the UK: 2011 Census data

    • Aged 65 and over: 10.376 million
    • Aged 85 and over: 1.394 million
    • Total population: 63.183 million

    This was first published by the Campaign for the NHS Reinstatement Bill

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    The health care industry nationally and internationally is vast and expensive. Insurers and governments worldwide spend a lot of effort seeking to control expenditure growth using rhetoric rather than evidence to improve the efficiency with which health care is delivered.

    Everybody now believes in “integrated care”. The Americans are obsessed with focusing their reforms on “value” i.e. improvements in the length and quality of life. All funders use the repetition of the religious cant of “prevention is better than cure”. There is agreement that primary care is “important” and should be funded properly.

    These “ideals” permeate all public and private health care systems. In the case of the English NHS they take the form of ill digested newspaper columns, superficial TV news and current affairs diatribes and a flood of Department of Stealth initiatives and NHS England missives about plans, and “innovations” galore. There is a ferment of advice and advocacy.

    All this effort is characterised by a reluctance to use evidence and add to the knowledge base by high quality evaluation. Earnest policy makers and daft politicians create floods of un-evidenced verbal diarrhoea. This wastes societies’ resources and create observable opportunity costs e.g. Lansley’s barmy NHS reforms of 2012 cost several billion pounds, thereby imposing avoidable mortality and morbidity on thousands of patients.

    The cry must be “where is the evidence?” when well-intentioned policy makers and managers commit scarce resources to “improve” the health service. Instead of believing in un-evidenced magic solutions, let’s “confuse” policy making with facts.

    Here are some popular policies which require much more careful evaluation.

     Primary care spending

    NHS England has announced increased spending of over £2 billion in the next five years. GPs, according to a recent survey, are not overly disenchanted with their pay or administrative burdens but are thoroughly disenchanted with the quality of their working lives.

    No wonder! Go and re-read the results of e.g. the Symphony work in Somerset to see how many patients have multiple morbidities and associated complexity and high costs. When I walk into my GP’s office with my multiple morbidities he has to catch up with my latest “events”, diagnose what is bugging me now and treat me. All to be done in 10 minutes! Quite a task and the risk is either corners are cut or appointment times go to pot. Hence GPs disillusionment with the pressures created by changing clinical needs of increasing numbers of patients who survive serious health events and proceed to make high demands on the NHS.

    So what to do with £2 billion plus from NHS England? More GPs, if they can be recruited from India and Poland, and slowly from UK medical schools, could reduce waiting lists and give more appointment time.

    Be careful! If the supply of GPs is increased will they detect increased need for hospital diagnostics and bed care? Supply creates its own demand as there is significant unmet need in all health care systems: the disguised iceberg of illness. But will increased supply of GPs always increase activity and costs? By how much? Where is the evidence?

    So maybe fund more practice nurses instead or as well as GPs? There is evidence, dating back to the 1970s that nurses can substitute for maybe 50 to 70 per cent of a GP’s workload. But again practice nurses can be economising substitutes for GPs or complements to them who increase the quality and quantity of care. Will more expenditure on practice nurses increase the demand for hospital diagnostics and bed care?

    The challenge for Sir Galahad Stevens is evidence based design of efficient ways of investing in primary care. Whatever policies are selected, evaluation would be valuable?!

    However efficient evaluation of primary care funding is impossible given the appalling lack of data about what transpires when GPs and practice nurses are busy caring for patients. If Sir G is spending more on primary care he and his merry fellow workers need to reduce our ignorance about what goes on in this “black box”.

    Competition and Hospital Mergers

    Venerable academics such Carol Propper in England and Zack Cooper with work in England and the USA have shown monopoly is associated with poorer outcomes and higher costs for patients. Competition challenges local monopoly making it a better deal in some contexts for patients, insurers and the NHS.

    However part of NHS rhetoric is the belief that hospitals should merge and form up into chains. Industrial economics indicates that take overs and mergers often fail to produce the improved efficiency projected by their advocates. Are NHS hospitals different? Where is the evidence?

    One effect of mergers will be that the potential for competition will be reduced. Dear policy maker how would you trade off the potential gains from mergers, if they exist, against the losses from reduced completion? Time for some joined up thinking comrades!

    ‘Prevention is better than cure.’ Is it?

    There have been some notable successes in prevention. The work of Sir Richard Doll over 50 years ago led to significant subsequent falls in smoking and the production of avoidable cancers and heart disease. The UK is now leading in its advocacy of e-cigarettes on the basis of some evidence that they are less harmful than tobacco “cancer sticks”.

    Excessive alcohol consumption continues to create ill health, particularly amongst pensioners. Scottish attempts to introduce minimum pricing is opposed by industry and the EU has “paused” the policy because of completion rules. As with the tobacco industry, alcohol producers resist the erosion of their markets with highly effective lobbying of political institutions

    Mortality from colorectal cancer has declined due to screening, complemented by improved treatments and the reduced incidence of the disease. In the USA where ‘poo screening’ reaches only 50 per cent of potential beneficiaries, death rates have fallen by over 45 per cent since the mid-1980s   (Welch and Robertson, NEJM, April 2016).

    But how should policy makers deal with excess salt and sugar in diets, and the consequent ill effects on obesity, kidney disease and hypertension? What are the likely costs and benefits of the proposed partial sugar taxation policy? Are these effects superior or worse than regulation of producers? Will the  Mars Corporation’s decision to put “health warnings” on some of their products result in loss of market share with few health gains, or lead to health inducing emulation?

    Sir Galahad’s Five Year Forward Plan rightly advocates vigorous prevention policies. But politicians, lobbied by corporate interests, move as slowly as investment in evidence production.

     Integrated care

    The fragmentation of primary and secondary health care and local authority social care has been highlighted as a problem for over four decades. Numerous re-disorganisations of the NHS have failed to bite the bullet of “integrated care” in large part because of each sector being reluctant to give up power and budgets to complementary competitors for public funding

    Recent investments in “Vanguard” projects and political initiatives such as the integrated Manchester “Poor House” are the latest manifestations of integration. Similar efforts are evident in the USA. In both countries there is investment in evidence, with US studies showing limited success. Given the failures over decade’s progress in developing efficient forms of integrated care remains slow with the need for healthy scepticism about the quantity and quality of evidence.


    Beware the high priests of evidence free policy making! They dominate choices about the allocation of scarce resources amongst competing patients. Prepare to be challenged by academic researchers whose role, as Mary Beard noted in the Guardian recently, is to make everything more complex! Simplicity is rarely the characteristic of health care reform!

    The health care market is very complex. Simple solutions rarely work. The latest wheeze of vote maximising politicians all too often wastes resources, thereby giving up potential health gains. Such behaviour is not only inefficient it is also immoral. Politicians and managers should think before they spout un-evidenced drivel!

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    Three months ago my wife contracted lobar pneumonia – out of the blue. One minute she was completely fit and healthy and the next she was in hospital with ITU outreach buzzing around. It was all very, very frightening.

    She received brilliant, timely treatment – intravenous antibiotics within an hour of arrival in ED, compassionate and skilled care from excellent doctors and nurses – and was home in three days.

    She made a good recovery and there was no paperwork to do or bills to pay. The NHS did what it does best. It was no more or less than I would have expected. My wife and I were both immensely grateful.

    But this is not main the point of this story. Please read on.

    Last month we were due to go on holiday to the United States. It was just over four weeks after leaving hospital but her consultant had given her the all clear to travel. She was well. Just before we were due to depart I realised that our annual travel insurance policy was due for renewal while we were away. It would run out three days before we were due to return home. We had used the same company for 20 years without ever making a claim.

    I attempted to renew on line as usual but immediately hit the question about recent hospital admissions. It was not possible to do it on line – I would have to make a phone call. Then followed the most difficult and upsettinging series of telephone calls that I have had to make for a very long time.

    It was just two days before our date of departure and we found the company would not renew the travel policy because my wife was now considered a “high risk”. An early question when talking to alternative providers is “have you ever been turned down for travel insurance”? You have to answer honestly and no surprise, they would you prefer to take your business elsewhere.

    Eventually I went back to my original company and told them we would cancel the holiday and claim back the cost against our existing policy. Only then did they agree to cover us for the extra three days until the end of the holiday, but they still refused to renew our annual travel policy.

    Insurance companies are risk averse. They only like to insure people they consider to be low risk. They can pick and choose who they take on and you, the customer, have no comeback.

    But this is not main the point of this story. Please read on.

    Have you caught up with recent advances in genetic testing yet? It is brilliant. Automated gene walking machines can map your DNA and can tell you your future risk of all sorts of diseases in a matter of days. For £125 you can find out if you are susceptible to everything from cancer to dementia. A bit pricey I know but the technology is developing so fast that in a very few years’ time you will be able to get a comprehensive health risk assessment for a few pence and a bit of spit.

    Imagine what the health insurance companies will be able to do with this genetic information. They can tailor your insurance costs to the actual risk of you making a claim. Great news for those with healthy genes but a bit of a blow if there is rogue DNA in the family.

    And don’t think they will not do it. They are in business to make the money and they will use any means they can to maximise profits. We are all vulnerable to the health effects of the random throw of our own genetic dice. The new technology will turn genetic bad luck into a personal financial catastrophe.  It will take very strong, new legislation to protect the public from exploitation – unless of course you live in the UK and have a National Health Service which is free at the point of need. For an up to date report on DNA Discoveries, please click this link.

    The NHS pools our collective health risk and shares the burden equitably. The cost to individuals is determined by their ability to pay and not their susceptibility to disease. Without the NHS we will be looking forward to a future of increasing inequality of health care provision.

    Do not underestimate the importance of this effect. In future our world will be populated by individuals whose wealth as well as health will be determined by their genes. The new technology will create huge distress and social upheaval across the globe.

    We in the UK are very fortunate to have the best answer to this problem already in place. We must not squander our NHS just when it is likely to become more import than ever before.

    First published on the Big Up The NHS blog

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    Andy Burnham has set out his vision for the NHS and at its heart is a commitment to a publicly funded and publicly managed service. The private sector would be confined to a “supporting” role while the voluntary or not for profit sector would be given preferential contractual treatment.

    His vision is one in tune with core Labour values and will resonate with the public who want the NHS to remain free at the point of delivery and available to all when and where they need it.  The NHS is a national treasure and is an institution that captures the sense of fairness that can be regarded as the essence of being British.  Its heart and soul should be preserved and be invested in.  But it should not be preserved in aspic.  It must move with the times and be confident enough to embrace high quality services wherever they may be located.

    I welcome Burnham’s plan for integrated care based from home and treating the whole person, and I welcome his commitment to greater homecare services for end of life care provided on the NHS.  However there are two serious flaws in his vision.  What does a “supporting” role for non NHS providers mean in practice and why should a voluntary organisaton be given preferential treatment over a private company.

    The notion that voluntary or not for profit organisations are somehow deserving of preferential treatment is misguided.  There is nothing intrinsically “better” about the service arm of a major charity than many private companies or statutory sector departments.  At present charities compete ruthlessly for contracts, poach staff from within the public sector and from each other and often have no better, if not worse, terms of employment.  The service arms are rarely delivered by volunteers and many charities are replicating the characteristics of both the public and private sectors.

    In my field of home medicines, it is currently only private companies that are able to deliver cost savings to the NHS through reclaiming VAT on medicines; only private companies that can meet the very high quality and governance standards needed for dispensing medicines; and only private companies that have the logistical networks to deliver medicines and services to peoples homes anywhere in the UK.

    It is hard to imagine any voluntary organisation being able to provide homecare medicines to the expected standards – it is hard enough for current providers to meet the demands – or to have the financial resources to underpin a high-cost, low-margin business, or to take such a business risk without contravening their charitable objectives. The NHS shows no appetite to directly deliver the service and would be unable to take advantage of VAT generated cost savings if it tried to do so.

    Clinical homecare provides high cost medicines and nursing services to people’s homes at no cost to the patient – in doing so it improves patient experience, reduces pressure on outpatient pharmacy and delivers real cash savings on expensive drugs – all of which are top priorities for the NHS.  Currently approximately 230,000 patients receive clinical homecare and while there are many pressures on services the sector is expanding and regularly generates very high levels of patient satisfaction. And it is 100% delivered by the private sector.

    Clinical homecare is an example of where using the private sector makes sense – where private firms can deliver a clinical service for the NHS and in doing so improve patient care and make real cash savings.  If the NHS is to become a service where staying at home is the first option then clinical homecare providers should be encouraged to do more not less.

    Private is not always bad, voluntary is not always good and an incoming Labour Secretary of State should be sophisticated enough to recognise this.

    Dave Roberts

    Dave is the CEO of the National Clinical Homecare Association but writes here in a personal capacity


    There cannot have been many occasions on which experts on health and experts on tax have come together to see how these two spheres of interest and expertise impinge upon each other and what scope for collaboration exists. A fascinating workshop organised by Medact last month provided just such a forum, demonstrating no shortage of possible synergies. Participants described investigations into the impact of taxes on unhealthy foods, the relationship between the LIBOR scandal and PFI schemes in the NHS, the role of Freedom of Information requests in getting complex financial information into the public domain and inequities in the distribution of the tax burden. One of the obvious connections between tax and health is the funding of the NHS and the workshop provided plenty of food for thought on the relationship between our ability to enjoy good services and the willingness and ability of governments to fund them.

    One dimension to the complex relationships between tax and health which attracts increasing attention concerns whether corporations engaged in trade worth many millions or even billions of pounds are contributing sufficiently to the wellbeing of those in whose countries they operate. Take for example, the development opportunities created by the tax revenues possible when a large corporation invests in a low income country. A growing number of studies have revealed what appear to be huge losses suffered by the people in such countries as a result of complex financial arrangements. Workshop participants from Oxfam and Save the Children both flagged this up and other development agencies such as Action Aid and Christian Aid have also raised the alarm. Through a combination of unequal information and unequal bargaining power, corporations in the extractive industry (for instance) are often able to negotiate contracts which are very beneficial to themselves while leaving only a fraction of the benefits which might have been expected for their low income country hosts, despite the fact that it is the latter’s natural resources which are being exploited. These contracts often entail financial incentives and tax breaks such as advantageous arrangements surrounding corporation tax, import and export taxes or royalties.  Further potential revenue for the government of the developing country is lost through the manipulation of profits which can be minimised through various mechanisms, particularly the mispricing of commercial transactions, and which results in less money remaining in the country.

    Such outward flows of capital deprive governments in poor countries of resources which might otherwise have been available for development purposes. Had these funds remained in the host countries, they could have been taxed and the revenues raised used for investment in health care, provisions targeted at improving the prospects of child survival and other programmes beneficial to health and wellbeing. The sums are eye watering: Oxfam believes around an average of £1billion per week has been lost to African countries for the past thirty years – or up to $1.4 trillion between 1980-2009 according to recent Africa Development Bank figures.

    It would be misleading, however, to consider that the practices of large corporations in aggressively reducing their tax liabilities are a problem for poor countries only. One contributor at the workshop described an investigation into Alliance Boots published last November. According to this analysis, Alliance Boots, which operates in 25 countries, is the UK’s main employer of pharmacists and pharmacy technicians outside the health service; it derives some 40% of its UK revenues from the NHS and is looking to secure extra work (and income) from the NHS. In 2008, Alliance Boots was purchased in the largest ever leveraged buyout in Europe. Some £9 billion was borrowed to buy the company in a transaction led by a private equity firm. Most of the debt was transferred to Alliance Boots in the UK and because it can offset the cost of financing its buyout-related debt against tax, and because the company has restructured with debt repayments being made to entities outside the UK, Alliance Boots has managed, the report claims, to reduce its UK taxable income by an estimated £4.2bn since the buyout. Despite the fact that Alliance Boots is thought to be the UK’s largest private firm and has remained profitable on an operating basis throughout the period, the report calculates that it has accrued a net tax credit of £130m since 2008.

    The practices of Alliance Boots comply with legal requirements – or at least appear to. In fact many of the company’s financial arrangements are not only highly complex but also shrouded in secrecy since its corporate structure includes entities located in tax havens, defined by Tax Justice Network as a ‘financial secrecy jurisdiction’. From prior revelations concerning the financial arrangements of other companies, we know that Alliance Boots is not alone. Again, the vast size of the corporations involved contrast with the tiny amount of tax paid. For example, it has been reported that Amazon had UK sales of £3.35bn in 2011 but disclosed a ‘tax expense’ of just £1.8m while Starbucks made sales in the UK of around £400m in the same year but paid no corporation tax at all. But again, these arrangements are defended by the companies on the grounds of their legality. And there are other companies, too.

    It is not just developing or low income countries which are being deprived of the revenues they need to finance development. A dramatic restructuring of health services in England is being driven largely by a funding squeeze which is worse than any the NHS has seen in the past half century. One does not need to be an opponent of radical restructuring to realise that the loss of huge amounts of tax revenue through avoidance, be it by large corporations or affluent individuals, is impinging increasingly on the services on which we all depend. Nonetheless, the closure of tax offices and loss of HMRC staff and the practice of seconding individuals from the big four accounting firms to the Treasury to advise on tax law when those firms design many of the tax avoidance vehicles, not to mention the sluggishness in modifying the tax rules to reflect the impact of global structuring and the use of the internet by large corporations, all point to a certain complicity by the state.

    Those investigating the persistence of poverty in developing countries and those struggling to sustain high quality health care in the UK have more in common than we think.

    This article was first published by the Centre for Health and the Public Interest

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    By Clare Bambra, Durham University and Alison Copeland, Durham University

    The north-south divide is a powerful trope within popular English culture and it’s also evident within the country’s health. A recent report by Public Health England showed that between 2009 and 2011, people in Manchester were more than twice as likely to die early (455 deaths per 100,000) compared to people living in Wokingham (200 deaths per 100,000).

    This sort of finding isn’t new; for the past four decades, the north of England has persistently had higher death rates than the south, and the gap has widened over time. People in the north are also consistently found to be less healthy than those in the south across all social classes and among men and women. For example, average male life expectancy in 2008-10 in the north-west was 77 years, compared to 80 in the south-east.

    A large amount of this geographical health divide can be explained by social and economic differences with the north being poorer than the south. Certainly, over the past 20 years the north has consistently had lower employment rates (for example this is 70% in the north-east compared to 80% in the south-east).

    This is of course associated with the lasting effects of de-industrialisation (with the closure of large scale industry such as mining, ship building and steel) and the lack of any replacement jobs or a strong regional economic policy.

    While the NHS clearly cannot address all the issues that cause the north-south divide, there have been attempts to increase NHS funding in areas that have the worst health – and many of these are in the north. The current NHS funding formula considers factors such as deprivation and ill-health indicators by area, so places with worse health and higher deprivation have higher NHS budgets.

    However, NHS England has a new funding formula out for consultation which fundamentally changes the way money is allocated to General Practitioners for the care of patients, and it appears that the north will lose out.

    In our BMJ letter, we mapped the new NHS funding data and this showed clearly that the more affluent and healthier south-east will benefit at the expense of the poorer and less healthy north. For example, in areas like south-eastern Hampshire, where average life expectancy is 81 years for men and 84 years for women, and healthy life expectancy is 67 years for men and 68 years for women, NHS funding will increase by £164 per person (+14%).

    This is at the expense of places such as Sunderland, where average life expectancy is 77 years for men and 81 years for women and healthy life expectancy is 57 years for men and 58 years for women, and where NHS funding will decrease by £146 per person (-11%). More deprived parts of London will also lose out with Camden receiving £273 less per head (-27%) under the proposed formula.

    While the objective of the new formula is to provide “equal opportunity of access for equal need”, these geographical shifts are because it has defined “need” largely in terms of age and gender, with a reduced focus on deprivation.

    It also uses individual-level, not area-level need, GP-registered populations rather than higher wider population estimates, and secondary care (use of hospitals and A&E) not primary or community care use. This means that areas with older populations have higher health care usage so they are getting money transferred to them from areas with fewer old people.

    However, areas with more old people are also areas that have healthier populations who live longer – hence there are more old people. These healthy old people are largely in the south-east so, within a fixed NHS budget, the new NHS formula can only shift money to them by taking it from others.

    The new formula appears to shift NHS funds from some unhealthy to healthy areas, from north to south, from urban to rural and from young to old.

    Many of the areas that will lose NHS funding if the new formula is implemented are the same areas that have also lost out from above average cuts to local authority budgets. The scale of the potential NHS funding shifts will add further stress onto these local health and social care systems and potentially widen the north-south health divide by reducing access to NHS services where they are needed most.

    The authors do not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article. They also have no relevant affiliations.

    The Conversation

    This article was originally published at The Conversation.
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    When Charles Frederick Thackray and Henry Scurrah Wainwright bought a Leeds retail pharmacy as a going concern in 1902, they could hardly have foreseen that their business would one day expand to employ more than 700 people, with markets all over the world. In less than a century, the corner shop was to grow into one of Britain’s principal medical companies, manufacturing drugs and instruments, and pioneering the hip replacement operation which has changed the lives of hundreds of thousands of people.

    The story begins with Charles Thackray’s predecessor, Samuel Taylor, who came to Leeds from York as a young man in 1862. He took over a fruit and game dealer’s premises in Great George Street to set up his own pharmacy. Leeds, suffering the effects of rapid expansion caused by the Industrial Revolution, might have seemed a surprising choice for a man from York, but against the background of smoke and grime was the spirit of enterprise and opportunity.

    Samuel Taylor’s pharmacy would have been familiar to Charles Thackray as a boy, as it was on the opposite corner to his father’s butcher’s shop at 43 Great George Street (then on the corner of Oxford Row), where Charles was born and where he lived until he was eleven. Charles’s father acquired three additional premises in the 1890s and business was doing well enough to enable Thackray to send his son away to Giggleswick School.

    At sixteen Charles began an apprenticeship in pharmacy at the Bradford firm of F. M. Rimmington & Son. He then went to work at the prestigious Squire & Son, Queen Victoria’s official chemist’s in the West End of London, and rounded off his education with a spell working on the Continent. Thackray qualified in 1899. By this time, the profession of pharmacy had clearly emerged from traditional herbalism, a change that had begun with the creation of the Pharmaceutical Society in 1841 and the Pharmacy Act of 1852 which made provision for the Society to keep a register of chemists and druggists.1

    In 1903 Charles married Helen Pearce, daughter of a leading Leeds jeweller. Their first son, Charles Noel, was born on Christmas Day two years later, followed by William Pearce (Tod) in 1907, then Douglas in 1909 and a daughter, Freda, two years after that. Charles and Helen Thackray had another daughter, but she was very frail and died when she was only ten. We can only guess at what effect the little girl’s death had on Charles, but it might go some way to explaining the ‘mental anxiety’ from which he was later to suffer.

    The Thackrays lived in Roundhay, moving to bigger houses as business prospered. A man in Charles Thackray’s position would be expected to join a professional men’s club. But the obvious choice, the Leeds Club, refused him membership on the grounds that he had committed the cardinal sin of being ‘in trade’. Along with others barred for the same reason, including Snowden Schofield, founder of the Leeds department store which was to bear his name, and a couple of others in the clothing business, he set up a club of his own, which they called the West Riding Club. It had its premises on the first floor of what is now the Norwich Union building in City Square.

    Much of Thackray’s time there was spent playing bridge which, along with golf, was his abiding passion. He was fond of singing, too, and the family often joined in singsongs round the grand piano at home.

    Thackray’s financial partner, Henry Scurrah Wainwright, was the same age as his friend Charles and, like him, was Leeds born and bred. On leaving Leeds Grammar School at the age of sixteen, he became articled to William Adgie, Junior, at Beevers and Adgie, a leading firm of chartered accountants in Albion Street (now part of KPMG Peat Marwick). He qualified in 1899, the same year as his friend Thackray, and became a partner in Beevers and Adgie in 1905.

    Wainwright, like Thackray, married a local girl, Emily White. Her father was an importer and manufacturer of botanic medicines—a herbalist rather than a pharmacist. The family business was built largely on the success of Kompo, their patent medicine for colds. Scurrah and Emily had one son, Richard, born in 1918, who was later to become financial director of the Thackray business and Liberal MP for the Colne Valley in the Yorkshire Pennines.

    Charles Frederick Thackray

    Plate 9.1 Charles Frederick Thackray, joint founder of the company and after whom the newly-established Thackray Medical Museum in Beckett Street is named.

    Scurrah Wainwright was actively involved in Leeds life: he became President of the Leeds Society of Chartered Accountants, was a long-serving director of Jowett & Sowry Ltd Printers and the Hotel Metropole and was Honorary Secretary of the Leeds Tradesmen’s Benevolent Association. But it was as Chairman of the National Assistance Board’s Advisory Committee in 1938 that he was appointed Officer of the British Empire, having achieved the monumental task of interviewing every unemployed man under 30 years of age in the city in an effort to help them find jobs.

    As young men, Charlie and Scurrah, as they were known to friends, lived within easy walking distance of each other’s homes in New Leeds—then a pleasant residential area on the east side of Chapeltown Road. As Scurrah’s diary for the year 1902 shows, he and Charles met at least twice a week with other friends to play cards, snooker and ping-pong in the winter and to go for walks and play tennis in nearby Potternewton Park in the summer months.

    Henry Scurrah Wainwright

    Plate 9.2 Henry Scurrah Wainwright, who with Charles F. Thackray bought a corner shop pharmacy in 1902 from which the Thackray Company grew.

    It was natural that the two young men, both recently qualified in their chosen professions, should have ambitions to start their own business. They saw their opportunity when Samuel Taylor’s pharmacy came up for sale.

    To assess its potential, as Thackray and Wainwright must have done, let us look at how Great George Street had developed since Taylor had opened his shop. By 1869 the Gothic facade of the newly built Leeds General Infirmary dominated the north side of the street—as it does today—and many medically-related businesses had grown up in the vicinity,2 including an oculist, a surgical instrument and artificial limb maker, a homeopathic dispensary, a drug com­pany and a ‘specialist in artificial teeth’. Number 70, on the apex formed by the junction with Portland Street, was a prime site.

    Many doctors at the Infirmary had consulting rooms in Park Square and would pass the shop on their way between the two. In addition, there were half a dozen private nursing homes in the vicinity, all providing potential customers. The dispensing side of the business looked healthy, too. Taylor’s prescription books between 1890 and 1901 record between six and a dozen prescriptions dispensed each day.

    Scurrah Wainwright’s diary entry for Friday, 25th April 1902 reads:

    ‘GET arranged price of Taylor business. £900 + 13 wks at £5.’ Then on 19th May, Whit Monday: ‘GET commenced business @ 70 Great George St.’

    Two days later, Wainwright records: ‘Opened bank a/c for GET. Gave him cq £100 deposit for Sam. Taylor; put £50 in his bank a/c. GET signed contract agreeing to purchase ST’s business (£900). Evg. Tennis on grass courts. 1st this year. At CFT’s shop re. books. GET stayed [at HSW’s] all night.’

    Several late evenings of bookkeeping are recorded in the ensuing weeks. One evening in August Scurrah notes: ‘Saw S. [Emily, his fiancée, known as Sis], then worked late at CFT’s shop, 7.30-9.30, then with Mr A. [Mr Adgie] until 11.30 pm’. The same month a partnership was officially agreed between the pair; the original pencil draft of the agreement states that Thackray was entitled to an extra £30 salary in lieu of living over the shop.

    The business traded under the name of Chas. F. Thackray. Wainwright might have added his name but for the fact that chartered accountancy was a relatively new profession and if accountants were seen to be involved in commercial ventures, their professional impartiality could be jeopardised.

    Although the shop was considered to be a high-class chemist’s under Samuel Taylor’s ownership, Thackray and Wainwright immediately spent just over £40 on painting and repairs (when the buying power of £1 was equivalent to £41 today) and a further £20 on an oak bookcase, display cabinet, linoleum and an electric bell. Two apprentices were taken on in the first year, too. In all probability they lived over the shop, as was customary, to judge from food, drink and coal orders recorded in the accounts.

    The first five years’ accounts show profits rising steadily, from just over £226 in 1903/4, to nearly £400 in 1907/8. They also show the first investment in equipment: £5 12s spent on a Humanized Milk Plant Separator in 1903 and £81 for a sterilizer three years later. Other purchases included a bicycle costing £2 14s, a typewriter for £7 and more than £30 on catalogue-printing.

    In 1908, for the first time, profits were split two-thirds to Charles Thackray and one-third to Scurrah Wainwright, as opposed to the equal division they had shared previously. No doubt the extra income would have been welcome to Charles, now a family man with a wife, two sons and domestic wages to pay.

    Advances in aseptic surgery in the early years of this century led to a new demand for sterilized dressings and instruments. The sterilizer bought in 1906 meant that Thackray could now develop another side to the business, supplying sterilized dressings to the Leeds General Infirmary, the nearby Women’s and Children’s Hospital and neighbouring nursing homes.

    Thackray's retail shop

    Plate 9.3    Thackray’s retail shop on the corner of Great George Street and Portland Street.

    Meanwhile, common preparations such as eye and ear drops, mouthwashes, nasal sprays and cough mixtures, dispensed at a cost of between 9d and 2/6, and the occasional pair of gold spectacle frames at 8/6, were the mainstay of the dispensing side of the business. Customers represented a wide range of social class, from aristocracy (Lady Harewood’s name is recorded in the ledger for 1910) to servants.3

    The first instruments Thackray sold were supplied by Selby of London in 1908. This side of the business grew so rapidly that two years later he set up an instrument repairs department in a converted stable at the back of the pharmacy. Compared to prescription fees, the income from instrument repairs was in a different league altogether.

    A large number of the physicians who patronized the shop, and sent their patients there, became lifelong friends of Thackray’s and their role in his success should not be underestimated. They helped the Thackray name to become known all over Yorkshire and they played an important part in the development of the surgical instruments side of the business.

    The early years of the firm coincided with major advances in surgical techniques. Leeds, in particular, was a renowned centre of high-calibre sur­geons, many of whom made their names at the Infirmary; best known of all was Berkeley (later Lord) Moynihan, who achieved worldwide recognition for his contribution to abdominal surgery. It was Moynihan who first suggested to Charles Thackray that he should make instruments; and the firm, with its experience in repairs at their premises just across the road, was well placed to do so.

    In 1908 Thackray bought the firm’s first powered transport—a Triumph motorcycle—and advertised for the first time in a national magazine. He also took on his first representative. By 1914, he had taken on two more, marking the beginning of a shift in emphasis from retailing towards wholesaling.

    Although the firm enjoyed regular orders for drugs and equipment from Yorkshire hospitals, they had to break into long-established names in the field if they were to expand.  Thackray’s insistence on employing only qualified pharmacists as salesmen resulted in a salesforce well above the average—and went some way towards overcoming any prejudice surgeons might have in talking to a sales representative.

    By the outbreak of the First World War, turnover was about six times that of the first financial year. Thackray’s was employing 25 people, including eight instrument makers and three full-time representatives. Salesmen visited customers over a wide area, supplying  wholesale pharmaceuticals not only to hospitals and nursing homes but also to general practitioners serving rural areas. Where chemist shops were few and far between, doctors did much of their own dispensing and therefore carried stocks of common medicines with them.

    The First World War brought with it an increased demand for dressings, many of which were sewn on to bandages by hand in those days. Thackray’s, looking to boost their production and not afraid to pioneer new methods, bought a machine which made the ‘Washington Haigh Field Dressing’ cheaply and quickly. Acceptance by the War Office of Thackray’s ‘Aseptic’ range as standard field dressings was important to the firm, both ensuring large contracts for drugs and sundries and, to a lesser extent, instruments. Ministry approval also provided a useful testimonial for potential customers.

    The Infirmary continued to place regular orders with the firm and in 1916 the hospital ordered sterilizers to equip its new operating theatres in the King Edward Memorial Extension.4 The total for ten items, including water,  instrument and glove sterilizers, dishes, copper cylinders and a cylinder sterilizer, came to more than £500 (worth about £17,500 today). The following year another substantial order was placed for theatre furniture, totalling £487. Instrument repairs for the hospital continued to be undertaken by Thackray’s at least until 1926, after which the Infirmary’s accounts stopped being itemized.

    By the end of the war in 1918, Thackray’s employed fourteen instrument makers, out of a total workforce that had risen to 32. The surgical equipment supply side of the business prospered, largely owing to the increase in surgery in Leeds and Thackray’s realization that there was a limit to the amount of wholesale drug business that could be obtained from doctors.

    The sales area for instruments now became greatly extended. Consequently more representatives were taken on and organized into a sales team. Unlike most, Thackray’s salesmen were not paid on commission, but given a share of the profits, a practice which encouraged them to win their contracts on the most favourable terms for the company. Thackray’s reputation in the trade for having a first-class sales network throughout the UK won them important distribution rights and they acquired agencies for various American products, then in advance of home-grown equipment in terms of design and gadgetry.

    The US company Davis & Geek, who manufactured soluble sutures and surgeons’ gloves, saw Thackray’s as an ideal distributor for their products. The sutures were Thackray’s first national distributorship. They were a superb product and were to be both profitable and good for the firm’s reputation. In due course, films were made of classic surgery being done with Davis & Geek sutures, and representatives were each equipped with a Kodak home cine projector to use with hospital audiences. Davis & Geek’s parent company, Lederle, front-runners in the 1920s in the production of serums for measles, whooping cough and other infectious dis­eases, also asked Thackray’s to act for them throughout the UK and provided, at their own expense, three or four more representatives for the purpose. Later, when sulphonamide drugs were introduced, Lederle again made Thackray’s their UK distributor.

    By the 1920s, the firm’s changing emphasis from Pharmaceuticals and dressings to surgical supply brought rapid expansion, and Thackray’s outgrew its Great George Street premises. By 1926, employees had doubled in number since 1914.

     The offices and showrooms of Chas. F. Thackray

    Plate 9.4    The offices and showrooms of Chas. F. Thackray, formerly the Old Medical School, Park Street, Leeds.

    Thackray was fortunate to find the extra space he was looking for just round the corner in Park Street where the Yorkshire Archaeological Society and the Thoresby Society (the Leeds historical society) occupied the Old Medical School. The Park Street building had been purpose built in 1865 for the Leeds School of Medicine.5 In the intervening years, it had been sold to the Yorkshire College of Science, precursor of Leeds University, then to the two historical societies. So when Charles Thackray made an offer the Societies considered ‘too good to refuse’, it was appropriate that it was to have a medical use.

    When Thackray’s took over the building in 1926, a lot needed doing to it. After alterations and repairs totalling more than £3,000, administration and most of manufacturing could be transferred to the new premises. Number 70 Great George Street was retained as a retail pharmacy and for the manufacture and fitting of surgical appliances.

    Early days at Park Street are remembered clearly by staff who worked there:

    “I left school at fourteen and joined Thackray’s in 1928. I used to pack parcels and take them on a handcart to the post office in Park Square. Often the wheels got stuck in the tramlines.”

    ‘Mr Thackray impressed me very much. He was a very likeable chap, always smartly dressed. There was no barrier with him. It was nothing to see him take his coat off to wash bottles—Winchesters, they were called, holding three or four pints—in the basement. I remember he had a massive office with a massive desk in it; a contrast to the petite person who sat behind it. He travelled in a chauffeur-driven limousine, an American car.’

    Though approachable, Thackray demanded high standards. As a sixteen-year-old apprentice in 1932, another employee recalls:

    “I was scraping enamel off a trolley to be re-enamelled—this was before the days of stainless steel—and Mr Thackray came to inspect the work. He asked for some paper to be spread on the floor and he went on his hands and knees so he could check the underside of the trolley…I finished my apprentice­ship when I was twenty-three.’

    A thorough training by any standards, but the firm’s reputation was built on first-class workmanship. It is fair to say that Thackray’s was rated as one of the best employers in the Leeds area, an essential element in the production of high-quality instruments. (Even during the Depression years of high unem­ployment, Thackray’s was able to offer a 58 3/4 hour working week for engineers, compared to the average 513/4.6) It is equally fair to say that the staff were exceptionally loyal and formed a closely-knit team who were willing to put themselves out on their employer’s behalf when necessary.

    “At holiday time, Whitsuntide and Easter, the firm closed for the Monday and Tuesday. We worked with a skeleton staff and one director on the Tuesday to open the post and despatch any urgent orders.”

    ‘Once, we had an order for six sterilizing drums—they’re about fifteen inches tall and a foot wide—at Harrogate. The director on duty had a sports car. It was raining and, with the drums piled in my lap, we couldn’t shut the roof, so we were wet through by the time we arrived. But you didn’t mind.’

    Recruitment of staff by recommendation rather than by advertisement meant that there were many instances of people from the same family working for the firm. A lively calendar of social events meant that everyone knew each other, whichever department they belonged to. A Social Committee, started in the 1930s and funded by weekly subscriptions and raffles, organized dances, outings and whist drives. It arranged cricket and golf matches with local organizations and started a football team which played at Roundhay Park.

    The Thackray football team competed in Sunday Combination League matches; success in a rather different league was achieved by Jim Milburn, the former ‘iron man’ of Leeds United and uncle of the famous brothers Bobby and Jackie Charlton. He worked as a labourer at Thackray’s from 1966 to 1982.

    The 1920s had seen sales in the home market flourishing. Turnover in wholesale Pharmaceuticals was brisk and increased instrument sales led to the opening of a London depot in Regent Street. Now Thackray turned his attention overseas.

    Much of surgery round the world at this time was British because Empire countries sent trainees and postgraduates to the UK. Therefore British products sold well in Empire countries and where there was a strong British influence, such as Canada, Australasia, South Africa, Egypt and Nigeria.

    To begin with, Thackray’s sent its own manufactured surgical instruments chiefly to the Mediterranean, the Middle East and West Africa; the firm were buyers for the Crown Agents, whose job was to buy for the Crown colonies. In those days, salesmen went on trips lasting, perhaps, six months, or up to two years. By 1930 the yearly total for exports was nearly £6000, about one-thirtieth of total turnover. Markets had been built up thanks chiefly to substan­tial leaflet advertising and to the increasing renown of the ‘Moynihan School’ of surgery.

    Thackray’s staff had increased to 100 by 1931. Since 1914 the firm had trebled its production and increased its turnover eightfold, despite generally slack trading conditions in most of the economy. Then international financial problems and a world slump led to devaluation of the pound. With fewer goods imported, it was opportune for Thackray’s to expand its own manufac­turing capacity.

    In the early Thirties the firm therefore began to make its own hospital sterilizers, operating tables and other items of theatre furniture. Packed ready for despatch, storage became a problem. Cases were stacked on stairways and in passageways; even in the front entrance sometimes.

    To make room for the extra manufacturing activity and storage at Park Street, the entire rear half of the building was demolished in 1933. It was then rebuilt to three storeys as a modern building of the time, with a fourth storey added shortly afterwards. The neo-Gothic front façade remained more or less unchanged.

    Although the firm rode the Depression years well, it suffered a major blow in 1934 when Charles Thackray died suddenly at the age of 57. He failed to return from an evening walk in Roundhay Park near his home and later his body was recovered from Waterloo Lake.

    His widow, Helen, had witnessed his mental anxiety for the previous two years and felt that his death would at last have given him peace. A tendency to anxiety that seemed to run in the family and the effects of his young daughter’s death were both likely to have affected Charles’s mental state. Nowadays, his condition would probably be diagnosed as anxiety neurosis.

    Thackray died when the two (of his three) sons who had joined the business were relatively young and inexperienced. Noel was twenty-nine and his brother, Tod, twenty-seven. The man best placed to take up the reins was Mercer Gray; he had been with Thackray’s since he was a newly qualified pharmacist before the First World War, and had become the most senior manager in the firm.

    Ownership of Charles Thackray’s share of the firm passed to Noel and Tod, and Helen Thackray was given financial security with an allocation of preference shares. (The business had grown by this time to achieve annual sales of about £200,000, equivalent to over £5million today). It was agreed that a limited company should be formed, with Scurrah Wainwright as Chairman, Mercer Gray as Managing Director and Noel and Tod Thackray as Directors of the Commercial and Manufacturing operations.

    The Thirties continued to be formative years in the field of surgery and Thackray’s were designing and making an increasingly wide range of instru­ments. It was therefore essential that the firm produce a comprehensive cata­logue to replace the handful of leaflets (not to mention competitors’ catalogues) they had relied on to date. In 1937, under Mercer Gray’s direction, two volumes containing line drawings of every instrument Thackray’s supplied were made available for the first time.

    Many instruments were made to surgeons’ own specifications—witness the number named after their inventor in any Thackray catalogue index. The close co-operation between surgeon and manufacturer shows up in the firm’s correspondence, such as this letter from Mr Cockcroft-Barker, MB, ChB, writing to Mercer Gray in 1938 about a dilator: The true secret of the instrument,’ which is not easy to decipher owing to Mr Cockcroft-Barker’s handwriting, ‘is the curve and also the length of the dilating portion.’ He suggests to Mercer Gray in a post script that this ‘might be a good thing to keep up your own sleeve’.7

    Surgeons could come to Park Street to buy their instruments; they could also get to know of new products at medical exhibitions. Thackray’s claims to have been first in its field to run an exhibition in conjunction with a surgeons’ meeting—a practice that is widespread nowadays with clear advantages to both parties.

    The pre-war instrument catalogue lists about 2500 different items (at least twenty of which were to Moynihan’s design). Park Street, where all design and the majority of manufacture took place, had become totally inadequate.

    A new factory would have to be reasonably nearby, so that the Managing Director could travel to the works easily; it should not be too expensive, and should be capable of expansion. A site fulfilling these criteria became available at Viaduct Road, about a mile to the west of Park Street.

    As a result of the government’s wartime policy of concentrating industry to make best use of resources, Leeds Dyers, to which Scurrah Wainwright was financial adviser, were looking for a buyer for their textile dyeing works. The three-storey building, alongside the River Aire and the Leeds-Liverpool Canal, was old but solidly built.

    While the Viaduct Road site accommodated increased instrument manufac­ture, production of pharmaceuticals and dressings continued at Park Street. Drugs were produced in what was known as ‘the lab’, although it would hardly be recognized as such today.

    ‘We used to prepare 20, 40 or even 80 gallons in large barrels stood on the floor. The mixtures were stirred with a big pole, filtered through asbestos and ladled by hand into buckets before being poured through funnels from the top of steps into smaller barrels,’ recalled one member of staff.

    The retail shop, meanwhile, dealt in smaller quantities. Apart from one or two stock items, such as cough mixtures, aspirins and ‘Thackray’s Pile Pills’, most preparations were made up individually from doctors’ prescriptions.

    A visit to the doctor was expensive for many in these pre-NHS times, so the pharmacist played a much more important role in diagnosis and treatment than his modern counterpart. Often, the customer would take the recommended remedy while still in the shop, sitting on one of two chairs provided. This practice could have its drawbacks. On one occasion, a customer came in complaining of queasiness and was given—reasonably in the circumstances— a seidlitz powder, a common remedy for indigestion. The customer drank the mixture and promptly keeled over and died. In fact, the man had suffered a heart attack and the pharmacist’s action was not to blame.

    The shop enjoyed a reputation as a high-class chemist; Thackray’s main­tained their policy of dispensing only private prescriptions, even after the introduction of the National Health Service. A high standard of service was maintained by a level of staffing that would be unthinkable today. Under the Manager were an Assistant Manager, two unqualified staff who dealt with nursing home orders, four apprentices, four errand boys and two cleaners. The shop was open every day of the year, including Christmas Day. Weekday closing at 7 pm (an hour earlier than many other shops in Leeds) meant that apprentices, whose evening classes began at 6.50 pm at Leeds Central School a little further up Great George Street, had to sprint up the road after clos­ing time.

    Great George Street pharmacy

    Plate 9.5    The interior of the Great George Street pharmacy.

    The Second World War inevitably created high demand for drugs, dressings and surgical instruments, with injured servicemen returning to Britain for treatment. Among the worst casualties were the burns suffered by airmen shot down in the Battle of Britain. Many of these young men, who included Canadians, Australians, Poles and Czechs, as well as Britons, were taken to East Grinstead hospital in Sussex—one of only four plastic surgery units in the country— which was under the direction of the gifted surgeon, Archibald Mclndoe.8 He was Consultant in Plastic Surgery to the Royal Air Force and was later knighted in recognition of his pioneering work. At East Grinstead, Mclndoe wrought miracles of reconstructive surgery; through this work he became a household name. It was Thackray’s who made many of the instruments for this delicate surgery, including dissecting forceps and scissors to Mclndoe’s own design.

    The fact that Mclndoe did not take his business to London firms—which, after all, would have been a more obvious choice for a surgeon based in the South East—underlines the importance of Thackray’s maintaining a presence in the capital: although it was expensive, they had to be seen as a national company, not just a provincial one.

    Without the London office, it is unlikely that Thackray’s would have been in plastic surgery at all. As well as fostering links with surgeons at the plastic surgery centres in the South East, the London representative won profitable accounts from major London teaching hospitals. The significance of instrument sales such as these was that orders for other Thackray goods tended to follow.

    One of the craftsmen who worked from surgeons’ backs-of-envelopes sketches for instruments turned his skill to providing life-saving equipment to servicemen who were to be dropped by parachute across the Channel. Folding scissors, saws and wire cutters were fitted into the heels of boots, compasses were hidden in tunic buttons and Gigli saws (a flexible saw rather like a cheese-cutter) were concealed in coat collars.

    Many members of staff were called up into the forces. Some of the older ones volunteered to join the Home Guard, and came to work in battledress, while at the retail shop, two firewatchers took turns to sleep on the examination couches in the orthopaedic department.

    The war brought a big influx of women into the firm, to train for jobs that men had had to leave for service duties. (The foundations of training laid in the war later grew into an Apprentices School, created in 1961 out of the difficulty in recruiting suitably qualified labour, especially in connection with surgical instrument manufacture, which was more of a craft than light engineer­ing. Latterly, sixteen-year-old school leavers served a four-year apprenticeship, of which the first year was spent at an Industrial Training Board college and the remaining three completing work experience at Thackray’s.)

    Hand work represented a large proportion of activity during the war and even into the 1950s. Some of the young female employees did a range of jobs: ‘We used to roll up catgut [for sutures] and put it in envelopes. My least favourite job was in repairs. Broken glass syringes came in, sometimes still with blood on, and we had to knock off the broken glass with hammers.’ Other duties included plaiting horsetail hair in groups of a hundred and cutting and rolling bandages from a large piece of lint. Today, it seems surprising that even as late as the 1950s so many jobs were carried out by hand, but the business—in common with the rest of the trade— had been traditionally craft-oriented; it was not until the 1960s that this labour-intensive approach was gradually modified in favour of more highly mechan­ized production.

    The closing years of the war saw the development of antibiotics, which was radically to change the treatment of a host of illnesses. Thackray’s was awarded the important new distributorship of one of these, Sulphadiazine, developed by the pharmaceutical firm May & Baker (M & B). Vaccines, too, were undergoing major advances. Soon after the war, Thackray’s were carrying stocks of Lederle’s new measles vaccine with approximately four times the potency of its predecessor. Such agencies were highly profitable: turnover for the Lederle account in 1946, for instance, was almost equal to the firm’s total exports.

    The introduction of the National Health Service in 1948 was the most import­ant single factor to affect Thackray’s after the war. The Ministry of Health took over all voluntary and municipal hospitals, and the extensive re-equipping that followed led to a busy and expansive period for all sections of the business. (The Leeds Postmaster remarked that Thackray’s generated one of the biggest parcel posts in the city.)

    Service has been described as the lodestone of Thackray’s. The firm had already established a depot to facilitate distribution in the South of England; now another was needed to supply Scottish customers promptly, and Glasgow was chosen for a second warehouse. At this time, too, a South African subsidi­ary was created, initially based in Cape Town. As a prosperous dominion, South Africa offered a potentially lucrative market, with the additional advan­tage that it had no major UK competitors.

    Exports, slowed during the war, began again in earnest immediately hostilit­ies ended. Yearly total export turnover, averaging about £50,000 during the war years, leapt to £120,000 in 1946 and continued to rise in the 1950s. Thackray’s sales force was once more increased, with some representatives travelling overseas full-time.

    The life of the overseas rep. was not always as glamorous as some of the exotic destinations might suggest:

    ‘On one occasion, in Sierra Leone, the booking clerk at a rest house told me I would have to share a room. I not only shared a room, but a bed—with an American agronomist.’

    It could be dangerous, too. One overseas representative contracted cerebral malaria in Africa, another tells of a narrow escape when caught in crossfire in Venezuela.

    A less hazardous way of promoting Thackray’s products was participation in international trade fairs. Frequently, orders for equipment would be taken at the exhibition stand but sometimes the fairs were not so much of benefit from a commercial point of view as to show the flag, encouraged by govern­ment subsidy.

    In 1956 Mercer Gray died and the second generation of the three families involved in the Thackray business now assumed new responsibilities. Mercer Gray was succeeded as Managing Director, jointly, by Charles Thackray’s sons, Noel and Tod. Richard Wainwright and Mercer Gray’s son, Robert, were elected to the Board the following year. A family firm, such as Thackray’s, presents special problems regarding its future financial security when share ownership is divided among the families involved. To avoid the pitfall of being forced into a sale by death duties, the heads of family had established family trusts, making over some of their shares to trustees for the benefit of their children. Although commonplace nowadays, such arrangements were then quite innovative and meant that the company weathered without difficulty the financial consequences of Mercer Gray’s death—and, later, Scurrah Wainwright’s and Noel Thackray’s.

    Noel and Tod took over the managing directorship of the company in the climate of post-war prosperity. Manufacturing continued to increase and the firm once again outgrew its premises. Unable to expand at Viaduct Road because it was discovered that there were major sewers underground, the company looked elsewhere. A factory in St Anthony’s Road, Beeston, in South Leeds, was up for sale. Although it had more space than required at the time, Tod Thackray was convinced that they should buy the site. He persuaded fellow directors and the Beeston factory was acquired in 1957 at a cost of £55,000 (equivalent to just over £600,000 today). It has proved to have been a shrewd investment in the light of subsequent expansion.

    Manufacturing and drugs moved to Beeston and the now-empty Viaduct Road building was put up for sale. It failed to attract a buyer, however, owing to a proposed plan to straighten a dog-leg bend in the road adjoining the factory (a plan which was never carried out). In the event, therefore, the Drug Department, together with the Wholesale Pharmacy, took over the premises. The removal of the instrument works from Viaduct Road was not without drama. A young man who had been employed at the works had been convicted of murder in 1945, a crime passionel, it seems. The victim’s blood stained clothing was only discovered twelve years later, when machinery was unbolted from the floor for removal.

    Thackray’s expansion in Leeds was followed by the acquisition of two specialist manufacturing companies, the British Cystoscope Co Ltd, in Clerkenwell, London, and Thomas Rudd Ltd of Sheffield, makers of surgical scissors. What both these companies had in common was a highly skilled workforce producing instruments to the exacting standards required of Thackray products.

    Although most sections of the business had been expanding throughout the 1950s, changes in the pattern of medical practice brought about by the National Health Service had led to a decline in business at the retail shop in Great George Street. Prescriptions from nursing homes and physicians with practices in Park Square, on which the trade of the shop had depended in the past, had declined; at the same time, profit margins on products had dwindled so that the shop was not even covering its overheads.

    Despite its popularity among customers, the Board could not ignore the shop’s balance sheet. In January 1962, it served its last customers, sixty years after Thackray and Wainwright had started their business there and a century since it had begun as a pharmacy under Samuel Taylor’s ownership.

    In general, however, the post-war reconstruction period of the 1950s and 1960s was highly profitable for the medical business, with large sums of public money directed towards new hospitals and universities.

    In 1961, for the first time since the National Health Service had come into being, Regional Hospital Boards were encouraged by the Minister of Health to make long-term plans for hospital building, with an allocation of more than £60 million capital expenditure for 1961-3 and further sums forthcoming by the mid-Sixties. This new attitude towards health spending virtually guaranteed Thackray’s a fast-expanding home market for the Sixties and made a sound base for increasing export trade.

    The 1960s were notable, too, for the important association Thackray’s developed with a remarkable surgeon whose name was to become as famous as Moynihan’s and Mclndoe’s. John Charnley, later knighted for his work in the field of total hip replacement, was an orthopaedic surgeon at the Manchester Royal Infirmary when he had first asked Thackray’s to make instruments for him in 1947 as an alternative to a long-established London firm.9

    However, his most notable collaboration with the firm concerned total hip replacement, an operation to reduce pain and restore movement to the hip by implanting a manmade replacement for the deteriorated ball-and-socket joint. Briefly, the artificial hip (or prosthesis) comprised a ball-ended stem which fitted into the patient’s thigh bone and a cup which took the place of the socket (or acetabulum) in the pelvis. Charnley refined his hip replacement operation throughout his long association with Thackray’s and was still working on improvements when he died in 1982 at the age of seventy.

    The close collaboration between surgeon and manufacturer is revealed in Charnley’s copious correspondence with the firm.10 Sometimes he would write three or four letters in a week, concerning himself with everything from the minutiae of design to broader, commercial issues. He was without question a perfectionist and could be forthright in his criticism of Thackray’s, but he was quick to apologize, too. Thackray’s, though tolerant of his demands, could reply with equal vigour and an understanding developed between them.

    In the pioneering days of the operation soon after the Second World War, Thackray’s made the stainless steel stems, while Charnley made the sockets himself, turning them on a lathe in his workshop at home.

    Sir John Charnley

    Plate 9.6 Sir John Charnley, knighted for his work in the field of total hip replacement, who collaborated with Thackray’s from 1947 until his death in 1982.

    This arrangement continued until 1963, when Thackray’s took over the socket production. Interestingly, the most suitable material Charnley found for the sockets was Teflon*11, better known for its non-stick properties in cooking pans.

    Charnley had set up his own workshop in the 1950s at the Wrightington Hospital near Wigan where he was Consultant Orthopaedic Surgeon. His technicians made instruments under Charnley’s close supervision and then Thackray’s manufactured them. As time went on, Thackray’s contributed their own design suggestions; this continual exchange of ideas was a significant factor in the advance of the hip operation.

    By 1962, it became evident that Teflon was not the ideal material for replacement sockets. Charnley was impressed by a new material, a high molecu­lar weight polythene, which he—characteristically—tested by implanting a sample in his own thigh. Only with no reaction discernible after six months did he begin to use the new material with patients.

    However, he was worried that other surgeons would take up his operation before the new material had been proven. Even after five years, he allowed Thackray’s to sell only to those surgeons whom he had personally approved— although the special instruments were available because they could be used for other hip operations. Such a restriction often put Thackray’s in the embarrass­ing position of having to refuse requests for Charnley implants from eminent surgeons.

    Charnley’s caution did not prevent considerable demand for the product, however, and the surgeon berated Thackray’s for not manufacturing in sufficient quantity. They responded by improving their manufacturing capa­bility, so that by the end of 1968, they could write:

    ‘As from January 1st next, we shall increase our rate of production of prostheses by 25% and our anticipated production will be 6000 per annum, which could be increased to 7000 by the end of the year. Additional production up to 10,000 per annum could be organized without too much difficulty.’

    Although the mechanics of the hip replacement operation had become established in the 1950s and 1960s, recovery in some patients was hampered by infection in the wound. With Charnley’s encouragement, Thackray’s created a model ‘clean’ area for the packing of prostheses, not simply meeting British Standard requirements but setting them.

    In due course, Charnley stopped making a personal selection of surgeons and any who had spent a minimum of two days learning the technique at Wrightington could buy his prosthesis. By the early 1970s, the product was made generally available and Thackray’s were fully stretched to produce the quantity of Charnley hips and instruments required.

    It was at this time that Noel Thackray died. The consequences of Noel’s death are described in more detail later but, in essence, it led to a reorganization of the firm’s management with Tod Thackray taking over his brother’s role as Chairman and becoming sole Managing Director. Tod’s son John became Deputy Managing Director and his nephew Paul (Noel’s son) was appointed Director responsible for Interplan Hospital Projects and much of the company’s purchasing activity.

    The changes coincided with a period when government was encouraging industry and universities to collaborate in order to make full use of the most up-to-date techniques available. In this context, Thackray’s approached Leeds Polytechnic Industrial Liaison Unit for advice on how to meet their increasing production demands. Accordingly, a general works manager was appointed in March 1971 and, shortly afterwards, Ron Frank, the management studies lecturer who had produced the works organization report, joined the company. Significantly, these two were the firm’s first professionally trained managers from non-medical industry.

    At the time they joined, manufacturing was craft-oriented, employing highly skilled men who could turn out excellent products. However, such craftsman­ship had two inherent drawbacks: there were difficulties in achieving precision consistency and there was little flexibility of volume. The 1970s consequently saw major capital expenditure in machinery. Computer-controlled, and oper­ated by only one technician, the new machinery could turn out large numbers of stems (50,000 a year in 1990) and a sophisticated electro-chemical process honed the metal to a high degree of accuracy.

    By far the biggest expenditure, however, was in equipment for ‘cold-forming’ steel. This process—whereby steel is compressed between dies at much lower temperatures than conventional forging—could dramatically in­crease the strength of stems without enlarging them. Although the incidence of stems fracturing in patients was extremely low, Thackray’s continuously researched stronger materials. A new steel was devel­oped, called Ortron 90*.12 It was calculated to prolong the life of the implant so that no further operation would be necessary during the patient’s lifetime. It also allowed Charnley to develop a new, narrow-necked stem.

    Demand for Charnley products was high and took the company into new export fields. In the US, Thackray’s was faced with building up sales against giant competitors; the volume required presented problems, too, and in 1974 an American company was granted an option to manufacture Charnley hip prostheses and sockets.

    What made Charnley’s contribution to orthopaedics exceptional was the combination of his undeniable skill with his gift for innovation and the will— including, as he admitted, acting as ‘the scourge and flail of Thackray’s’—to see it through. He was given due recognition in the citation that accompanied the honorary Doctorate of Laws awarded to Tod Thackray by the University of Leeds in May 1988:

    ‘He and his company have contributed to some of the greatest advances in orthopaedic surgery this century. Through his long co-operation and friendship with the late Sir John Charnley, Mr Thackray and his company confronted and overcame some of the major problems in orthopaedics….Though a skilled engineer as well as a surgeon, Charnley quickly outran the resources of his own laboratory and it was through his close co-operation with Thackray and his company’s engineers that low-friction total hip replacement was gradually perfected.’

    By the time Charnley died in 1982, thousands of hip replacements oper­ations were carried out annually. A huge number of implants therefore needed to be available. An exact fit for each patient would have necessitated keeping in stock literally hundreds of different designs and sizes at any one time. A revolutionary solution to the problem was devised by a Belgian orthopaedic surgeon, Professor Joseph Mulier, from the University of Leuven, who ap­proached Thackray’s with his concept of a made-to-measure stem.

    Mulier’s idea was for an implant that was manufactured while the patient was still on the operating table, using computer-controlled laser technology. The system had the additional advantage of not needing to be cemented in place, as the Charnley stem did, a factor which caused complications in unexpected revision cases. Together, Mulier and Thackray’s developed a system which they called Identifit. It took about 40 minutes for a titanium stem to be milled and delivered to the operating theatre. The first such stem was inserted in February 1987 with generally favourable results.

    Changes in the management structure of the firm were touched on in relation to Charnley, but we should now look in more detail at what took place as the 1960s gave way to the 70s. It was in the prosperous years of the 1960s that the third generation of the family, John and his cousin Paul Thackray, entered the picture. Tod’s son, John, had departed from the tradition of learning the business within the company by undergoing management training, both at Edinburgh University and with a market research company in Amsterdam. Paul, Noel’s son, had intended to work for Thackray’s only temporarily after Army service in a garrison medical centre abroad, but after a stint in the firm doing a range of jobs, his interest in Thackray products grew and he decided to stay on.

    When John rejoined Paul in the family firm in the 1960s, all was going exceptionally well for the business. The dramatic increase in demand at home coincided with a surge of new hospitals in the oil-rich countries where Thackray’s had won sizeable contracts. At this time annual exports were about equal to home sales, totalling £1,340,000 in 1971—chiefly due to Charnley products—compared with just under £250,000 in 1960. Success overseas was due in large measure to Export Director Bill Piggin, whose achievement was recognized beyond the firm when he was awarded the OBE for services to Britain’s exports.

    Towards the end of the decade, however, alarm bells sounded in the boardroom: the impending abolition of resale price maintenance would hit consumables and result in competitors’ taking over the wholesaling of general sundries, the bulk of Thackray’s business; and there was the threat of losing the US agencies which had been such a profitable source of income since the 1920s, as American companies set up their own operations here.

    First, the board recognized the need to update its methods. Computerization was clearly going to be an essential part of streamlining— particularly in stock control, with about 15,000 different items stored at three different warehouses as far apart as Leeds, London and Glasgow (a problem that was resolved with the building of a new warehouse at Beeston in 1974).

    Outside consultants were brought in to ease the transition to a computerized system, but most members of staff agree that, to start with, it was a fiasco. ‘If I had ordered what the computer said on day one,’ claimed someone in the purchasing department, ‘Thackray’s would have been bankrupt.’ The extra work over two years in putting right mistakes was considerable for some. Not least for Noel Thackray, who had been closely involved with the whole programme since its introduction. Members of his family feel that that period of stress made him ill and had probably even hastened his death in 1971.

    The bottom line of the company’s accounts at this time showed a healthy profit, but both John and Paul Thackray felt that administration was old-fashioned and inefficient. In this respect, however, Thackray’s was no different from any other of the major surgical houses. When John suggested bringing in management consultants, Tod welcomed the idea. It was at this point that Thackray’s had their first contact with Leeds Polytechnic staff, whose role has already been touched on in relation to Charnley.

    The appointment of a works manager and massive investment in machinery led to what unquestionably became the most efficient production line of Charnley stems in the world. Meanwhile, manufacture of replacement knees, elbows and external fixation equipment for bone fractures continued alongside, although in smaller quantity than the hip prostheses.

    John and Paul Thackray sought further advice from Leeds Polytechnic Department of Management, whose brief was to look at marketing. Their report made it clear that the firm had no concerted approach and that if action were not taken quickly, the healthy position that Thackray’s was in owing to a favourable market environment could soon revert to one of chaos or even decline.

    A solution to the general lack of co-ordination within the firm was to restructure the business. The old ‘shop’ system—in which, for example, each department had its own raw materials store even though many of these were common to other departments—was replaced by a new structure, in which the company was divided by function rather than product. To put the scheme into practice, ten new managers were appointed in the early 1970s and, as John Thackray put it, ‘The driving was left to them.’ Delegating management, so that the traditional linear structure was re­placed by a pyramidal one, represented a watershed in the company’s organiz­ation. It ceased to be a patriarchy, and for the first time a personnel manager was appointed.

    The revolution occurring within the company was mirrored elsewhere, with people working shorter hours and trade unions’ influence on industry increas­ing. The 1970s saw the company’s first strike. This was a remarkable event in a business with no record of industrial action throughout its long history, but less noteworthy when considered in the national context.Throughout the country, millions of workers had been given a cost-of-living increase in the high-inflation days of the mid-1970s. About 300 of the workforce at Beeston walked out in protest at the delay in payment of their threshold award. Union members agreed to return to work after twelve days when they were offered a cost-of-living safeguard.

    The otherwise good record of labour/management relations survived this hiccup and the Seventies continued to be a prosperous decade for the company. Widespread hospital building, with concomitant orders for new equipment, was good for business, and increasing profits from the sale of Charnley products were ploughed back into the company.

    Towards the end of the decade, John and Paul Thackray took over as Managing Director and Deputy respectively, while Tod remained as Chairman.

    A more vigorous approach to marketing led to substantial exports. Hundreds of thousands of pounds worth of equipment was sent to Middle Eastern hospitals and in 1978 the firm won a £2.5 million contract for a royal hospital in Abu Dhabi. This was the first time the firm had scheduled such a project from start to finish.  The largest volume of sales was still in surgical sundries for which there was now cut-throat competition. But, as Paul Thackray put it, ‘We were like a corner shop trying to compete with supermarkets.’ If Thackray’s were to remain competitive, they would have to specialize.

    Management decided to rationalize their agencies, retaining only exclusive ones or those that complemented their own theatre products. In addition, they began to subcontract some of the more common instruments and simple hospital furniture. This strategy left Thackray’s producing a minority of its own instruments for the first time and it opened the way for manufacturing to be concentrated on new winners, like Charnley, and medium-run items such as plastic surgery instruments. Foreign-made surgical instruments began to show undeniable quality as well as low prices and the company started to import a range of specialist instruments which they marked Thackray Germany.

    On the whole, the rationalization strategies worked, but the decision to retain only exclusive agencies could backfire, as Thackray’s found to their cost with an excellent American product, the Shiley Heart Valve. This agency achieved a turnover of £1 million; then, with little warning, it was withdrawn. Profits for the company were halved overnight.

    At the end of the successful Seventies, a strong pound hit exports, and cash limits were imposed on the National Health Service. For the first time, profits dropped to break even. In common with the rest of British industry, Thackray’s found themselves having to make staff redundant, dropping from a total of 750 employed to 500 over a period of three or four years—though the number of compulsory redundancies was low. The staff redundancies and the Shiley experience made John and Paul Thackray realize that they would have to take some radical—and sometimes unpopular—decisions, among them the closure of the London office and the firm’s canteen. But they acquired confidence and it was in the 1980s that they undertook what was to be the last major reorganization of the company under family ownership.

    They began by splitting the increasingly unprofitable Raymed division (Thackray’s drug department) into two: with Pearce Laboratories on one hand and ostomy and continence products, under the heading Thackraycare, on the other. By manufacturing fewer products and larger volumes, Pearce Laboratories, moved to a factory at Garforth on the outskirts of Leeds, could now outprice its giant competitors.

    The new policy, which could conveniently—if clumsily—be called div­isionalization, meant a return to division by product area, with each having its own manufacturing, warehouse, sales and marketing, but with the additional advantage of shared centralized services.

    In this context, Instruments were now separated from Orthopaedics, which represented the lion’s share of Thackray’s business by 1985, achieving a turn­over of £20 million. Expansion at Beeston took place on the proceeds of the sale of Park Street, which Leeds City Council had purchased to make way for additions to the Magistrates’ Court. The Council’s approach to Thackray’s fortunately coincided with the need to find larger premises anyway; and the company’s head office moved to a new leasehold office building in Headingley, on the edge of Leeds.

    The remarkable growth of Thackraycare was a success story in its own right. It had its origins in the orthopaedic department of the retail shop in Great George Street. But it was clear to Christin Thackray (who met her husband, John, while working for Charnley product agents in her native Norway) that patients were in need of far more professional help than was available to them. Her idea was for Thackray’s to employ trained nurses to work in the community, fitting the appliances and giving back-up advice. By 1980, Thackraycare took on its first two nurses to put the concept into practice. The old brown-paint-and-cracked-lino image of the orthopaedic de­partment was replaced by an attractive display in the basement of the Instrument Centre which had opened at 47 Great George Street two years previously.

    The success of the new appliance centre lay in word-of-mouth recommen­dation and by 1984, two more were opened, in Surrey and in Bristol. Others, in Oxford, Southampton and Wolverhampton, followed. Most manufacturers’ products were stocked and it was strict policy to recommend a Thackray product only where appropriate. Most patients were referred by healthcare professionals to the centres and the majority were seen in their own homes-an immeasurable improvement for patients.

    At the end of the 1980s the family shareholders had to consider how the firm was to continue into the Nineties and beyond. As a predominantly orthopaedic business, accounting for about eighteen percent of the total number of hips implanted internationally, John and Paul Thackray recognized that if the company were to succeed against giant competitors, they would have to develop a global presence. They could foresee potential inheritance tax problems arising for individual shareholders, too.

    Given these circumstances, most boards of directors would consider either going public or selling out. The first option was rejected because the family directors felt themselves to be unsuited to the different disciplines the stock market would have imposed. There was every likelihood, too, that Thackray’s would be undervalued compared with American prices. Selling the company did not appeal to John and Paul at that time either; they had not planned to retire for another five or ten years. Although a sale was not envisaged until the mid-1990s or possibly 2000, the company actually changed hands in 1990. What led to this unexpected turn of events?

    Orthogenesis was a major investment for the company requiring millions to develop and market it. Thackray’s drew up a list of some of the big names in orthopaedics and, early in 1990, approached them with a view to developing Orthogenesis as a joint venture, or possibly selling that part of the company. But no one was interested: all or nothing was the common response.

    In John and Paul Thackray’s view selling the whole company should be considered only if the following criteria could be met: that a high, US-level price was paid; that the buyer should have a similar ethos; that continuity of employment on the firm’s present sites could be assured for the foreseeable future; that the buyer would continue to expand the company.

    Among the international companies who showed interest was another family-owned business called Corange. With 90 percent of its business in diagnostic products, pharmaceuticals and biomaterials, but only ten percent of its worldwide sales in orthopaedics (through its subsidiary, DePuy), Corange found what they were looking for in Thackray’s. And Corange could provide the worldwide network and financial resources that Thackray’s needed to assure the company a future as successful in the twenty-first century as they had been throughout the twentieth.

    Penny Wainwright

    Originally published in “Leeds City Business”  by Leeds University Press 1993


    Chemist and Druggist, 14 January 1984

    Kelly’s Directory of Leeds, 1902

    Thackray Company Prescription Ledgers, West Yorkshire Archive service,  Leeds District Archives

    House Committee Minutes, Leeds General Infirmary Archive

    5.  S. T. Anning and W. K. J. Walls, A History of the Leeds School of Medicine; One and a Half Centuries 1831-1981, Leeds University Press, 1982.

    6.  Reality, vol. 1, no. 2, September 1961, Thackray Company Archive, Thackray Medical Museum.

    7.  Unpublished correspondence, Thackray Company Archive, Thackray Medical Museum.

    8.  H. McLeave, Mclndoe: Plastic Surgeon, 1961.

    9.  W. Waugh, The Man and the Hip, 1990.

    10 J. Charnley, Manchester Collection (Medical), John Rylands University Library of Manchester.

    11 *Registered Trade Mark.

    12 *Registered Trade Mark.

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    The late 1960s was a time of ideological confusion when the idea of social progress generally lost the association with science it had in the 1930s. The medical age of optimism began to seem an age of credulity. In 1971 Cochrane (Cochrane,  A.L., Effectiveness and efficiency,  London:  Nuffield Provincial Hospitals Trust, 1971.)  was the first of a series of authors presenting fundamental criticisms of the theory, practice and profession of contem­porary medicine in Britain and North America (Powles,  J.,   ‘On  the  limitations  of modern  medicine’, Science,Medicine and Man 1973; 1:1-30;  Fuchs, V.R., Who shall live?, New York: Basic Books, 1974;  Cochrane,   A.L.,   ‘1931-1971:   a  critical  review  with  particular reference to the medical profession’. In, Medicines for the year 2000, pp. 1-11. London: Office of Health Economics, 1979.) which were rapidly accepted by an unusually wide range of opinion-formers from both ‘Left’ and ‘Right’ traditions. In its most popular form, and with an irresponsible use of evidence setting it apart from the medical pioneers of this trend, it was presented by Ivan Illich in his book Medical nemesis, (Illich, I., Medical nemesis:  limits to  medicine, London: Marion Boyars, 1976.) which sold over 3 million copies worldwide. He accused doctors of expropriating the personal right of patients to control their own health, from a combination of greed and intellectual arrogance. He accused the medical profession of being the main danger to public health, as he had pilloried teachers as the main enemies of education in his previous book Deschooling society. Illich went to extraordinary lengths in pursuit of his medical enemy; here is a sample:

    Medical civilisation tends to turn pain into a technical matter and thereby deprives suffering of its inherent personal meaning. . . Culture makes pain tolerable by interpreting its necessity; only pain perceived as curable is intolerable.

    Like  any  intellectual fashion  achieving wide influence, Illich’s argument used some elements of truth, though nearly all his evidence was derived from medical sources, suggesting that medical science was more self-critical than his theory allowed. It still seems extraordinary that so weak an argument was taken so seriously, even in authoritative medical journals like  the  British   Medical Journal  and  the  Lancet, which devoted pages of self-doubt to an assault which would once have been brushed aside as a trivial impertinence. Ten years later, the Lancet still has space for random reflections of Chairman Illich, of a banality too complex and pretentious for analysis either as prose or scientific argument. (Illich, I., ‘Body history’, Lancet 1986; ii:1325-7.)

    The most credible explanation for this seems to be that many intellectual leaders of the profession were already looking for ways to justify their own retreat from the full social   implications of  making all important advances  in medical science available as a human right to the whole population. Assured of sponsorship, doctors still wanted to provide effective skills whatever the cost; but as the State set limits on its sponsorship for innovative medical science, the profession discovered new doubts about its mass applica­tion, though medical science itself was unquestionably in better shape than ever before.

    Common to all these intellectual critics were the following beliefs:

    1. That medical care has contributed little to improvements in health or expectation of life compared with nutrition, education, and conditions of life and work.
    2. That doctors and their public have expected too much from attempts to  restore  health by  surgical or bio­chemical  excision   or  substitution,  which  now incur increasing and eventually prohibitive costs for diminish­ing returns.
    3.  That personal medical care should therefore retreat to a more modest role in curing seldom, relieving often, and comforting always.

    This currently dominant set of ideas I shall refer to as the Liberal Critique, since it has all the historic qualities of Liberalism: scholarly backing, humane intentions, appeal to both Left and Right intellectual radicals without embarrass­ment to either, and ability to interpret defeat as victory. This is a savage description, but anger is justified; not because these three conclusions are untrue, but because of the increasingly obvious social and political context in which only these truths have been proclaimed, while others, less convenient to this scoundrel time, have been forgotten. The Liberal Critique has disarmed professional resistance first to revision, then to destruction of the post-war social settlement of which the NHS was an important part.

    Does Medical Care Matter?

    The view that medical care contributes less to health than nutrition, education and conditions of life and work is not new or original. It is difficult to think of any important innovator in medical thought who has not held this opinion. If you take a thousand people and lock them up, their first thoughts are of food, not doctors. The more primitive life is, the more important food and shelter become, but a society that is becoming more rather than less civilized gives more not less priority to education and health services, in that order. Even in specialized hospital medicine, outstanding innova­tors like Paget,  Osier, Albutt, Pickering and Platt always conceded the pre-eminent role of nutrition, education, and living and working conditions, compared with the salvage work they performed. Like pioneers in any field, they may sometimes have expected too much from attempts to restore health by surgical or biochemical excision or substitution, but again this is not new, and the general public, encouraged by press entertainers, has been far more credulous than its doctors. In Britain more than most countries there has been a vigorous tradition of medical scepticism ever since the Second World War, probably because until recently nearly all doctors were in a free public service rather than trade, and therefore had fewer incentives to deceive either themselves or their customers.

    The novel feature of the Liberal Critique is not this re­discovery of the dominant importance of environment for health, and our still limited ability to cure illness, but its emphasis on a diminishing role for medical care; not only the alleged pettiness of its actual contribution, but of its potential contribution in the future. The question would have been easier to understand around 1905, when the only major diseases in which medication influenced outcome were syphilis and heart failure, and effective surgery was limited to injuries and a few abdominal and obstetric emergencies. The rate of successful clinical innovation, far from levelling out or diminishing, is increasing every year. Seeds of a vast expansion of innovation in applied medical science were sown with the discovery of the structure of DNA in 1953, ‘a revolution in the biological sciences comparable to that in physics earlier this century’. (Weatherall,  D.,  ‘Molecular  and cell biology in clinical medicine: introduction’, British Medical Journal 1987; 295:587-9.) Medicine is applied human biology. It took about 40 years for nuclear physics to find a practical application; 34 years after Crick and Watson we are already beginning to see evidence that ‘medical sciences are about to enter the most exciting period of their development’.

    Undeniably, basic medical science is advancing with accelerating speed. Practical applications in teaching hospitals, though most of them still depend on basic medical sciences of the pre-molecular era, are already arriving faster than we can assimilate them within present staff resources.

    There is no real doubt that these new techniques are increasingly effective. Coronary artery bypass grafts (CABG) are a good example. When they began to be widely used in the United States in the early 1970s, thoughtful doctors had mixed feelings. On the one hand, CABG relieved the symptoms of chest pain from coronary heart disease (angina) almost completely in about 70% of cases, and increased survival by about 50% over the first seven years following operation for the minority of patients with angina who have left main coronary artery disease (about 13% of cases), with less than 3% mortality from the operation itself.

    CABGs may appear to support the view that effective medical care now incurs increasing and eventually prohibitive costs for diminishing returns, but this is so only if the technique is applied without an overall policy for control of coronary disease. Once-for-all surgical costs for CABG are £2,500-£4,500 at 1983-4 prices, not all that much more than the cost of modern medical care for the expected life­time of angina patients. (Williams, A.,  ‘Economics   of  coronary  artery  bypass  grafting’, British Medical Journal 1985; 291:326-9)  The difference in cost, around £2,500, is about the same as the cost of one total hip replace­ment operation. Surgical costs are more than twice as high in marketed, fee-paid care systems such as that in the USA, so in terms of cost-effectiveness, the case for CABG is stronger in a free public service, where surgeons are paid by salary. Like all new surgical treatments for common conditions, the technique becomes cheaper as it becomes perfected and standardized; the more advanced centres are now well into the next generation of surgical procedures for coronary salvage, coronary angioplasty, an essentially simpler pro­cedure which provides a rebore of the original vessel instead of replacing it, an even safer and much cheaper procedure. These techniques are effective and should be generally available without delay to those who need them, a policy which in no way contradicts the need simultaneously to step up health promotion, prevention and anticipatory care.

    One of the saddest recent developments in the NHS is the attempt to supplement inadequately funded NHS heart surgery by getting coronary surgery done privately under contract to the NHS, as my own Health Authority in West Glamorgan has recently decided to do. NHS units are still the sole source of training for the very specialized surgical teams which perform these operations, whether they ultimately work in the NHS or the private sector. Farming the work out to private contractors working for profit accelerates the destruction of the training, research and development facilities on which all progress depends.

    Though coronary death rates have fallen in USA, Australia, and New Zealand by about one-third over the same period that CABG has been in wide use in these countries, heart surgery has been estimated to contribute only 4-5% of this reduction. ( Goldman, L., Cook, E.F., ‘The decline in ischemic heart disease mortality rates: an analysis of the comparative effects of medical interventions and changes in lifestyle’, Annals of Internal Medicine 1984; 101:825-36.) It is still not clear why these big falls in coronary mortality have occurred, nor why they appeared first in the USA and Australia, and have hardly occurred at all in Britain and Sweden; on the whole, the most convincing evidence is for a reduction in average blood total cholesterol because of changes in the composition of quantity of fat in common foods, which have occurred in some countries and not others. There is no doubt at all that they do reflect changes in the way people live more than changes in medical care, except insofar as medical advice may accelerate changes in personal behaviour, on a scale sufficient to affect fashion. There has certainly been a stark contrast between the active advocacy of coronary prevention as well as surgical salvage by doctors in the USA, and the passivity of British doctors. (Beaglehole, R., ‘Medical management and the decline in mortality from coronary heart disease’, British Medical Journal 1986; 292: 33-5.) There is still much that is unexplained about coronary disease. Big reductions in coronary atheroma in young men preceded any big shifts in adult eating patterns, exercise, smoking or heart surgery by about ten years. They may at least in part have been caused by contrasts between childhood and adult nutrition in the entire cohort of men born between about 1910 and 1940. ( Marmot, M.G., Shipley, M.J., Rose, G.A., ‘Inequalities in death: specific explanations of a general pattern?’, Lancet 1 984; i:10003-6.; Forsdahl,   A.,   ‘Are  poor  living  conditions  in  childhood  and adolescence   an  important  risk   factor  for  arteriosclerotic  heart disease?’, British Journal of Preventive & Social Medicine 1977; 31:91-5.)  These questions are important, because molecular biology is going to give us weapons that act upon causal mechanisms in very large numbers of people, rather than the primitive strategy of salvaging advanced disease.

    There is no longer any doubt that CABG is a real advantage to patients carefully selected on clinical grounds, or that surgical salvage should have a useful, though relatively small and eventually diminishing part to play in any overall strategy for dealing with coronary disease. This was exactly the (unplanned) sequence followed for rheumatic valvular damage, the principal cause of early death from heart disease before coronary disease began to be common in the 1930s; a rapid but incomplete decline because of changed living conditions, accelerated and completed by surgical salvage. The difference between surgical valve repair or replacement in the 1950s and ’60s, and CABG today, is that free access to surgery on the basis of need alone is no longer expanding for the whole population.

    Studies in Sweden suggest that the justifiable annual demand for CABG would be around 300 per million popula­tion, if all suitable cases were accepted in the age-range 45-54. Reviewing the provision of CABG in Wales in 1983, the Royal College of General Practitioners found the opera­tion was being offered at 7% of this ideal rate in Wales, and 80% of it in the London (SE Thames) region, after subtracting cases ‘imported’ from other regions, ( Report   of  a Working Party. ‘Stitches in time’, Welsh Council, Royal College of General Practitioners, 1983.)  although male death rates in middle age from coronary disease in the South Wales valleys are about one-third higher than in England and Wales as a whole, and nearly twice as high as in the South East. ( Hart,   J.T.,  ‘The  marriage of primary  care  and  epidemiology”, Journal  of the  Royal  College  of Physicians  of London 1974; 8:299-314.)  Unlike facilities for open heart surgery for rheumatic valvular disease, regional availability of CABG is unrelated to need. In the absence of an active policy for preferential development in areas of high coronary mortality, there is a large element of social selection because of the lower expectations and therefore lower effective demand of poorer and less well-informed people, even in a system of free care. There is no evidence that any such policy is currently pursued or planned.

    Even if coronary surgery were available in proportion to regional need, no matter how successful it might be tactically, it could not be an effective mass strategy. Without organiza­tion of anticipatory care and prevention it only offers a personal short-term technological fix to a small high-risk minority, instead of tackling what is essentially a long-term behavioural problem for the whole population. Though molecular biology may give us alternative solutions, even these will probably have to be applied to whole populations at risk rather than to a few with advanced damage.

    The truth is that until we have successful prevention, we must have salvage; if we want to remain a civilized country, both strategies must be pursued, and for everyone. I have yet to meet any well-informed person who, having developed angina uncontrollable by stopping smoking, by medication and by minor restrictions in exercise, does not want a skilled surgical opinion. Whatever their views on grand social strategy, the experts all seem to make intelligent and dis­criminating use of high technology salvage for themselves and their families, and they still do this through the National Health Service whenever they can. In practice, even within the NHS we already have a two-tier system, in which a minority of well-informed people, and those with unusually energetic GPs, gain access to the best high-technology salvage, while the majority go by default.

    In an under-funded public service, as more people rightly make more sophisticated demands, waiting lists lengthen, and more people have to seek treatment privately. This is only beginning with CABGs, of which only 0.1% were done privately in 1981, but it is well established for hip replace­ment, 26% of which were done in the private sector in the same year. New techniques are either introduced reluctantly and inadequately, as with CABG, or in some regions abandoned almost completely to the private sector, as with vasectomy and termination of pregnancy. Using available data from various years from 1981 to 1984, private market penetration had reached 1% for obstetric care, 1.5% for mental handicap, 2% for chronic mental illness, 4% for acute mental illness, 13% for all elective surgery, 35% for long-stay institutional care of the elderly, and 47% for terminations of pregnancy.

    Paying More and More for Less and Less

    Of course, believers in the Liberal Critique deplore all this. They would like everyone to enjoy the same quality of care as themselves, but (they argue), Britain in its post-imperial state is becoming a poor country, in which painful choices have to be made;  to them it is obvious that with limited resources, the first things to go from a shorn public service should be luxury items like high technology medical care. The argument has even influenced people who consider them­selves Marxists. Writing in Marxism Today, Dr Steve Iliffe (Iliffe,   S.,   ‘The  painful  path   to   health’, Marxism Today  1986; 30:34-8)  has come to believe that:

    the guiding principles of the National Health Service are no longer workable. . . overall staffing levels should be kept constant. . . budget restraints on health authorities should be maintained. . . principled objections to charges for services should be overruled. . . Medicine is steadily becoming less cost-effective. . . money will come from different directions in different places, ending the pretence of a tidy monolithic institution. If this happens, we will be in debt to the Conservatives for the instability they once inflicted on the biggest institution in Europe outside the Red Army, and also on the traditions of the British Left.

    Iliffe gives CABG and total hip replacement as examples of rising costs with diminishing effectiveness. He can hardly deny that these procedures are effective in making thousands of lives enjoyable   rather than miserable.  As techniques become   standardized,   costs   fall, particularly if they are organized in a non-profit public service. The proportion of our Gross National Product spent on medical care has risen only from 4% in 1949 to 6% in 1981, is still less than any other country in Europe, and almost half that in the USA. The rate of fall of age-specific mortality has, of course, declined as more people reach a healthy old age, and more deaths result from natural senescence, but effectiveness of medical care in improving the quality of life has enormously improved.   There is no evidence that this tendency will diminish; on the contrary, the immense potential benefits of advances in basic biological science have hardly been tapped. It has been estimated that 25-30% of hospital beds, and probably an even higher proportion of all NHS spending, goes on care during the last year of life, ( Cartwright,  A., Hockey, L., Anderson, J.L., Life before death, p. 79. London: Routledge & Kegan Paul, 1973.)  either terminal care or more less unsuccessful salvage. In the light of current medical knowledge, this proportion is too high, but that means an increased investment in care in the community at earlier stages of disease, rather than a reduction in care of advanced disease and terminal illness.

    Social Causes of Disease

    Believers in the Liberal Critique nevertheless maintain that because in an ideal world each pound spent on better food, housing or education in deprived sections of the population would yield greater health benefits than each pound spent on medical care, public spending should follow the same order of priorities. Granted the unlikely premise (an ideal world), this would be true, and the argument is important.

    Although death rates at all ages have been falling ever since 1870, the difference between death rates for the rich and the poor has been widening since the 1930s (Fig. 2.1). Mortality differences for women follow the same trends, but are more difficult to interpret because women are classified by their husbands’ occupations.

    Fig. 2.1 Standardized Mortality Ratios (100 = average mortality across all classes) by social class, 1931-81, men 15-64, England and Wales.

    Class 1931 1951 1961 1971


    I professional



    76 (75) 77(75)


    11 managerial



    81 81


    III skilled manual and non-manual



    100 104


    IV semi-skilled



    103 114


    V unskilled



    143 (127) 137(121)


    *   Figures have been adjusted to classification of occupations used in 1951. ** Men 20-64 years, Great Britain.

    Source: Wilkinson, R.G., ‘Socio-economic differences in mortality: interpreting the data on their size and trends’. In Wilkinson, E.G.. (edA Class and health: research and longitudinal data, London: Tavistock Publications, 1986.

    Fig 2.2 Mortality of men  aged   15-64  by social class, 1971-75 and 1986-81.

    Mortality of men aged 15-64 by social class, 1971-75 and 1986-81.

    Fig. 2.2 shows data from follow-up of a 1% sample of the population of England and Wales, occupationally classified in the 1971 census, for the periods 1971-5 and 1976-81. (Fox,   A.J.,   Goldblatt, P.O.,  Jones,  D.R., ‘Social class mortality differentials:     artefact,    selection,    or   life    circumstances?’    In Wilkinson, R.G. (ed.), Class and health: research and longitudinal data, London: Tavistock Publications, 1986.)  It includes two further social groups, the ‘inadequately described’ (including many chronic sick with a high mortality) and the ‘unoccupied’ (including long-term unemployed whether or not they are able to claim unemployment benefit). Clearly there are even higher death rates for these groups than for Social Class V, the unskilled manual workers. Social class differences increased for all groups except the ‘unoccupied’, which fell from an SMR of 299 in the first period to 213 in the second. The authors of this study interpret this fall as an effect of ageing; men selected out of occupational classifica­tion by ill-health and who did not die in the first period, were less unlike those who remained classifiable in the second.

    Fig 2-3 Standardized mortality ratios for coronary heart disease in men aged 20-64, Wales, 1979-83.

    Standardized mortality ratios for coronary heart disease in men aged 20-64, Wales, 1979-83.

    Social and regional distributions of deaths from all causes differ little from social and regional distributions of death-rates from major specific causes, particularly premature deaths from coronary heart disease. Social class differences in coronary death rates for men in Wales aged 20-64 are shown in Fig. 2.3.

    Fig. 2 4 Percentages of Welshmen aged 45-64 who 1) thought it was impossible to reduce the risk of heart attacks; and 2) smoked cigarettes every day; by sex and social class, 1985.

    Welshmen- heart attacks and smoking

    Data from a recent survey of coronary risk factors in Wales based on a random sample of the whole population, (Nutbeam,  D., Catford, J.,  ‘Pulse of Wales: social survey supplement’, Heartbeat report no. 7, Cardiff: Heartbeat Wales, 1987.)  set out in Fig. 2.4, confirm that in Wales at least, with very high rates of unemployment, both fatalism about the possibility of preventing heart attacks, and the proportion who smoke the cigarettes responsible for many of the deaths, increase with descending social class, worst of all in those out of work. This picture of inequalities in distribution of actual disease, of informed confidence that disease can be prevented, and of avoidable precursors of potential disease, is true not only of coronary heart disease, but of all the main causes of pre­mature death and chronic disability. Worst of all, these inequalities are increasing. The available evidence was presented in the Report of Sir Douglas Black’s Committee on Inequalities in Health in 1980, powerfully reinforced by a wide range of subsequent research reviewed by Wilkinson, Marmot, Blaxter, Wadsworth and others. (Wilkinson, R.G. (ed.), Class and health: research and longitudinal data, London: Tavistock Publications, 1986.)

    Social inequalities in health are neither just nor inevitable. They are the result of social and economic policies adopted by governments, which clearly reveal the priorities of the social groups they represent. Fig. 2.5 shows the relation between inequalities of income and expectation of life for 11 developed countries.

    Fig. 2.5  Life expectancy  (male  and  female)  and gini coefficients of post-tax income inequality (standardized for household size).

    Life expectancy (male and female) and gini coefficients of post-tax income inequality (standardized for household size).

    The countries grouped on the upper left with relatively high life expectancy and minimal inequality of income, the Netherlands, Norway and Sweden, have strong egalitarian traditions which they still uphold. The countries grouped on the bottom right, with relatively low life expectancy and maximal inequality of incomes, the USA, Germany, Spain and France, have long been strongholds of social Darwinism. The war of every man against every man may be good for business, but certainly not for health.

    Paradoxically, the most rapid improvements in life-expectancy this century in Britain were concentrated in the war periods 1911-21 and 1940-51. (Winter, J.M. Quoted in Wilkinson, R.G., Class and health: research and longitudinal data, London: Tavistock Publications, 1986. , p. 110.)  Though these were years of relative austerity for the middle class, they were years of full employment and full bellies for the poor, with government policies of planned social intervention to create what was later called the ‘social wage’; free school meals, maternity and child benefits, sickness benefits, free access to museums, libraries, and parks, cheap municipal housing and public transport, and finally a free and comprehensive health service; the working model for the NHS hospital service in 1948 was the Emergency Medical Service scheme which effectively nationalized hospital resources during the war.

    Investment in a shared infrastructure of free services is a political choice, of proven effectiveness. Before the Second World War, infant mortality in Stockholm varied according to socio-economic group from 14 to 49 per 1,000 live births; today it is below 7 per 1,000 live births, with virtually no difference between socio-economic groups. (Dahlgren,   G.,   Diderichsen,  F., ‘Strategies for equity in health:report   from  Sweden’,  International Journal  of Health Services 1986; 16:517-37.) Governments, like our own in 1945 or in Scandinavia today, can choose to increase the social wage relative to personal incomes, or they can revert to sale and purchase of these elements of civiliza­tion, piece by piece, every man for himself, as Thatcher Conservatism does today.

    Fig. 2.6 Cross-sectional   relationship   between   occupational   earnings and standardized mortality ratios, England and Wales.

     Cross-sectional relationship between occupational earnings and standardized mortality ratios

    Redistributive    income   policies   are   another   way   of improving health selectively for least healthy social groups. Fig. 2.6 shows the relation between income and one indicator of health, the standardized mortality ratio. Wilkinson ( Wilkinson,   R.G.,   ‘Income  and mortality’,  p.   109 in Wilkinson,  R.G.   (ed.),   Class   and   health:   research   and  longitudinal data London: Tavistock Publications, 1986.)  explains the significance of this curve:

    successive increases in income bring diminishing health returns. The shape of the curve suggests that income transfers from the rich to the poor might be expected to bring substantial health benefits to the poor while having little effect on the health of the rich. Every pound transferred from people earning (in 1970) £60-70 a week to people earning £10-20 would reduce the death rates of recipients by five times as much as it increased those of the donors.

    The Black Report was commissioned by the last Labour government, but was completed and published in the early months of Margaret Thatcher’s first term as prime minister. In a foretaste of authoritarianism to come, everything administratively possible was done to smother the report at birth, but it quickly achieved the widest sales and press attention given to any similar document since the Beveridge Report. The Black Report is now being implemented in reverse; that is to say, government policies are, virtually without exception, the opposite of those recommended by the Black working party. By every measure of income, education, housing, availability of employment, nutrition, participative sport facilities, nicotine and alcohol depend­ence, and increasingly by access to sophisticated medical care (curative or preventive), Britain is becoming a more divided and unequal society.

    A Strategy for Advance

    The first step in devising strategies for more effective, and cost-effective, health services must be to oppose this policy of de-civilization. Scholars seeking solutions within limits set by the de-civilizers deceive themselves, and disarm and confuse what should be, and will become, a previously unimaginable social alliance of professional and public opinion for resumed social progress. Some advocates of the Liberal Critique have had useful things to say, and progressives can learn from them, but the essence of their strategy is retreat; an inglorious abdication from previous beliefs about the potential effectiveness of medical care, the potential value of medical science, the dignity and independence from the market of Medical Professionalism, and the feasibility of real social advance.

    Our health services have developed not in an ideal, painless world of armchair social strategies, but in the real, bitter world of injustice consciously and deliberately maintained by real, powerful people who gain from things as they are, in which the distribution of wealth and power is never changed without struggle. Priority investment in social infrastructure, redistributive personal income policies, and higher priority for health service spending rather than preparation for war or reduction in personal income tax, are not rival alternatives. None of them will be pursued by a government which assumes that what is good for the Stock Exchange is good for the nation; all of them would be pursued by a government concerned with the health and happiness of all of the people.

    On the other hand, realistic strategies for renewed advance must start from where we are, with the people we have. We cannot devise ideal solutions on a blank page, without regard to where we have come from, or where medical science is going. The content of potentially effective medical care has changed, both because of changes in public health, and because of advances in medical science, requiring big changes in the structure and staffing of care, most of all at primary care level.

    We have to consider a set of historical choices, in a way that has not faced doctors since they first began to define their professionalism in the early 19th Century. (Loudon, I.S.L.,  Medical care and the general practitioner 1750, Oxford: Clarendon Press, 1986. Together with Rosemary Stevens’ book, this is the best detailed account of the rise of British medical professionalism.)  If we wish to continue the association of Medical Professionalism with Medical Science, we must prepare to accept solutions outside the limits of professionalism as then defined.

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    Fabian occasional paper 8 

    This paper is based on the sixth Somerville Hastings memorial lecture delivered at Ruskin College, Oxford on the 7 March  1974 by Sir Richard Doll, Regius Professor of Medicine at Oxford University. The lecture was endowed by the Socialist Medical Association.

    This   pamphlet,   like  all  publications  of  the   Fabian   Society, represents not the collective view of the Society but only the view of the  individual who prepared it. 

     Fabian Society,  11 Dartmouth Street, London SW1H 9BN.

    November 1974  ISBN 7163 3008 3


    Few people who were not members of the organisations in which Somerville Hastings worked can have any appreci­ation of the contribution he made to British medicine, for he always preferred the background and was completely devoid of ambition, save for the welfare of the bodies which he served. These, however, were many—the Socialist Medi­cal Association, the constituencies of Reading and Barking, the London County Council, and the Middlesex Hospital. In these changed days, it is difficult to appreciate the uniqueness of his character. It is not just that he was a consultant who was in favour of the NHS in 1948, but, as an ENT surgeon at a London teaching hospital, he belonged to a group of ultra-specialists who were more closely identified with private practice than most other sections of the profession. Such men were seldom scientists, yet Hastings had won a gold medal at University College for botany and had been a cancer research scholar before taking his higher surgical degrees. They never entertained revolutionary students, nurses, and other health workers in their homes, yet Hastings invited them all to his home in Harley Street, gave them drinks (despite being a teetotaller) and persuaded them, by example, to work together, irrespective of faction. Those of us who were mem­bers of the Socialist Medical Association before the war knew him to be the father of the NHS and it is a great privilege to give a lecture in his honour.

    Monitoring The Service

    The Health Service, which of necessity fell short of Hastings’ ideal, has just been reorganised so we now have, for the first time, single authorities in each part of the country whose task will be ” to balance needs and priorities rationally and to plan and provide the right combination of services for the benefit of the public ” (National Health Service Reorganisation: England, HMSO, 1972). With this objective all will agree, but the machin­ery that has been devised to bring it about is novel and complex and it is not at all certain how it will work. Those of us who are interested in the standards of medical care for the public at large have, therefore, a particular respon­sibility to take stock of the present posi­tion and to try and assess the effect of the changes now being introduced. Attempts to measure progress are, of course, no new thing. They are made regularly in the Annual Reports of the Chief Medical Officer of the Depart­ment of Health, and, in a more limited way, by local Medical Officers of Health, university departments of social med­cine, and the Medical Research Council. But the bitter debates that surrounded the introduction of the NHS made doctors chary of discussing the larger issues and most health workers have ‘been content to play their part by dealing with the problems that were nearest to hand, secure in the knowledge that each year improved methods for the prevention and treatment of disease were introduced. Now the position is changed. The prin­ciple of a national service is uniformly accepted, study of the structure of the service has become a respectable academic activity, and the emphasis on evaluation which pervades the depart­ment’s proposals for the new method of management under the guise of monitor­ing (Management arrangements for the reorganised National Health Service, HMSO, 1972) constitutes a challenge to the health professions which it would be foolish to ignore. The only difficulty is that we have very little idea how the monitoring ought to be done.
    There are, it seems to me, three main aspects of the service that need to be monitored, each of which requires a different type of approach. These are medical outcome, social acceptability, and economic efficiency. We have, of course, always been interested in the first, but we have tended to ignore the others, believing that everything would be all right if only we were left alone to do our job in our own way—and, of course, provided with more funds. With an educated and interested public and health service that already absorb 5 per cent of the gross national product, this attitude is no longer tenable and we must either concern ourselves with social acceptability and economic efficiency, or let someone else do it for us.

    ANNUAL DEATH RATES IN 17 COUNTRIES :   1948, 1958 and 1969.

    country  infant mortality per 1,000    live births         1-4 years1948           1958   1969       1948      1958 1969 mortality per 100,000 persons aged :5-24 years                      25-44 years1948      1958   1969      1948       1958   1969 45-64 years1948      1958   1969
    Australia 27.8 20.5 17.9 1.8 1.2 0.91 0.95 0.78 0.72 2.35 1.78 1.82 13.0 11.2 11.2
    New Zealand 27.5 23.4 16.9 2.4 1.6 1.02 1.28 0.76 0.68 2.26 1.73 1.75 11.0 9.5 10.7
    Japan 61.7 34.5 14.2 10.9 3.0 1.09 3.55 1.18 0.65 7.03 2.73 1.83 12.3 9.1
    Canada 44.4 30.2 19.3 2.4 0.89 1.10 0.73 0.74 2.45 1.83 1.70 11.9 10.9 9.9
    USA 32.0 27.1 21.0 1.6 1.1 0.84 1.05 0.75 0.86 3.00 2.25 2.41 14.5 12.6 12.0
    Belgium 59.1 31.3 21.2 2.6 1.2 0.96 1.28 0.68 0.65 3.20 1.75 1.66 13.4 10.9 11.0
    Denmark 35.3 22.4 14.8 1.8 0.8 0.71 0.85 0.53 0.56 2.18 1.50 1.48 9.6 9.1 9.0
    Finland 51.9 24.5 14.3 3.7 1.6 0.80 2.35 0.68 0.63 4.70 2.45 2.34 14.9 13.0 12.8
    France 55.9 27.1 16.4 3.1 1.4 0.85 1.20 0.63 0.70 3.25 2.10 2.02 12.0 10.7 10.3
    Germany fr 68.1 36.0 23.4 3.4 1.4 1.04 1.53 0.78 0.76 3.15 1.93 1.87 11.0 10.6 10.5
    Great Britain 35.5 23.0 18.3 1.8 0.9 0.79 1.05 0.53 0.50 2.41 1.60 1.46 li.9 11.3 11.0
    Iceland 26.2 18.7 11.7 2.0 1.4 0.73 1.20 0.70 0.57 3.28 1.53 1.83 9.2 8.4 8.5
    Italy 72.1 48.2 30.8 6.8 2.5 1.07 1.60 0.75 0.61 3.10 1.83 1.60 11.3 10.0 9.9
    Netherlands 29.3 17.2 13.2 2.0 1.2 0.91 0.88 0.55 0.55 1.83 1.30 1.30 8.9 8.2 8.7
    Norway 29.6 20.0 13.8 2.1 1.1 0.91 1.10 0.60 0.58 2.33 1.38 1.39 8.2 8.0 8.3
    Sweden 23.2 15.9 11.6 1.3 0.9 0.56 0.88 0.55 0.52 2.05 1.43 1.44 9.8 8.2 7.8
    Switzerland 35.9 22.2 15.3 2.2 1.3 0.93 1.10 0.78 0.64 2.55 1.63 1.52 12.3 9.7 8.8

    Medical Outcome

    Consider first medical outcome. This, we have been accustomed to judge by the extent to which we succeed in pre­venting or curing disease, and in reliev­ing disability. We have been urged by the World Health Organisation to seek instead to increase “physical, mental and social well-being”, but the scales that have been devised are too artificial to be of any practical value. With Bradford Hill, I suspect that positive health is as impossible to measure as love, beauty, and happiness. Indeed we are only just beginning to measure morbidity, and we still have to rely to a large extent for the assessment of medical outcome on the old measure of mortality which has the advantage of being unequivocal and of overriding importance to the individual, I shall return to this problem later when considering economic efficiency, but meanwhile shall assume that changes in mortality and morbidity are the only practical measures available.

    Mortality: international comparisons     

    How, then, has Britain progressed in the years since the health service was intro­duced in comparison with other countries which have depended on other systems, by the simple objective criterion of total mortality? There are few things more frustrating than trying to make inter­national comparisons of mortality rates over a period of time. The figures needed are often missing for particular years or are given for different age groups, and the population base is changed by the inclusion or exclusion of particular ethnic or geographical groups. We can, however, make comparisons between the mortality rates for all causes in five broad age groups over the years 1948 to 1969 in 17 countries. For this purpose I have regarded England, Wales and Scot­land as one country and have combined the published rates in one set of figures. Had they been considered separately the results would have looked somewhat better for England and Wales and some­what worse for Scotland, but the trends would have been similar. The results are shown above.

    The infant mortality rate, which has long been regarded as a sensitive indica­tor of the combined effect of social conditions and health services, fell in Great Britain by 48 per cent. This is quite impressive until we note the much greater fall in Japan. In fact the British position deteriorated from ninth among the 17 countries to twelfth. Between ages 1 and 44 years the British rates did better, maintaining or improving their position and, indeed, becoming the lowest in all the 17 countries for the youthful ages of 5 to 24 years. In middle age few countries have shown much improvement, the aver­age decline being about 10 per cent. In Britain the decline was only 8 per cent and the British position deteriorated again from ninth to thirteenth.

    In the five age groups I have examined, Sweden now occupies one of the first four places in all; the Netherlands in four, and Norway, Iceland and British each in three. Despite the great contributions of American medicine, the position of the United States has worsened in all, becoming respectively sixth, fourteenth, sixteenth, seventeenth and seventeenth out of the 17 countries (the last two at ages 5-24 and 25-44 years).

    At older ages, crude mortality rates pro­vide an unsatisfactory measure and it is better to substitute the expectation of life at 65 years, Unfortunately, few such figures are available, but those that there are show that Britain compared un­favourably with most other countries and continues to do so.

    Total mortality rates are a tough criterion to apply to a health service, as they depend largely on cultural, economic, and environmental conditions that are not easy to control. For example, the rise in mortality at ages 5 to 44 years that took place in the USA between 1963 and 1968 can be attributed to an increase in motor accidents, suicides, homicides and cirr­hosis of the liver without postulating a decrease in the effectiveness of medical care (“Leading components of upturn in mortality for men. United States 1952-67, Vital and Health Statistics, series 20 number 11, us Government Printing Office). The health services, however, can no more ignore these causes of death and the effects of cigarette smoking and over nutrition than they could ignore the role of polluted water in the nineteenth century.



    Specific mortality within Britain   

    Much more can, of course, be learnt from examining the mortality from specific diseases, something that is par­ticularly easy to do in Britain thanks to the detailed publications of the Office of Population Censuses and Surveys. These data are used regularly by the Chief Medical Officer of the Department of Health and Social Security to measure the effect of medical intervention, and are too well known to require amplification. A few examples only are provided in the table below.

    The mortality from hypertensive disease, gall stones and appendicitis has fallen slowly and progressively due presumably to improvements in treatment and the facilities for it, as incidence rates are unlikely to have diminished.

    The mortality from tuberculosis fell dramatically from 507 in 1948 to 97 per million in 1958 and has continued to fall since, till it is now (29 per million) only a little more than that for asthma (24 per million). The decrease in the number of deaths is unfortunately compensated for by the increase in the number attributable to cancer of the lung, from 231 per million in 1948 to 623 per million in 1971. The overall level of the mortality from motor traffic accidents, which is one of the lowest in Europe, and the relative con­stancy of the rate in the last 12 years, despite the great increase in traffic, is a tribute to the efforts that have been made to prevent accidents and to the efficiency of the accident service. A 20 per cent reduction occurred in the year following the introduction of the breathaliser and the setting of an upper limit to the per­missible amount of alcohol in the blood; but the rate has been increasing slowly since. The reduction in 1962 was due almost entirely to a reduction in motor cycle accidents, as drivers turned for pre­ference to cars.

    The maternal mortality has been falling steadily and is now only a sixth of what it was in 1948. In 1971 only 134 deaths were attributed to complications of preg­nancy, childbirth and the puerperium; including 27 attributed to abortion. This last is about half the number that was recorded annually before the Act was passed which legalised abortion for social reasons, but it is difficult to be sure whether this is because of a decrease in the total number of abortions or an increase in their safety.

    Local fatality rates

    Much can also be learnt by comparison of mortality rates in different parts of the country. Such comparisons have often been used to obtain clues to causation, but hardly at all to examine the effec­tiveness of the service. With the development of hospital activity analysis we can now begin to study case fatality rates in different areas and units thus avoiding the difficulty of geographical differences in incidence. Heasman and Carstairs (personal communication) for example, used hospital data to compare the results obtained for a number of com­mon surgical conditions in teaching hospitals and non-teaching hospitals throughout Scotland. In contrast to a study that had been carried out by Lee and his colleagues 16 years earlier in England, fatality rates for appendicitis and peptic ulcer were practically identical in both types of hospital (Lee, Morrison and Morris, “Fatality from three common surgical conditions in teaching and non-teaching hospitals”, Lancet, 2, 1957). The fatality of hyper-plasia of the prostate, however, was again higher outside the teaching hospitals (4.3 per cent against 3.3 per cent). Further investigation showed that the difference was due, not so much to the type of hos­pital, but to the presence of specialists— the results obtained by urological sur­geons (2.3 per cent) ‘being appreciably better than those obtained by general surgeons (3.9 per cent), even after taking account of the fact that the general sur­geons tended to operate on a higher pro­portion of old patients and of patients admitted as an emergency.

    The data obtained from hospital activity analysis can provide many similar com­parisons but they are not easy to interpret and special enquiries are often needed before conclusions can be drawn. One difficulty is that the data refer to admis­sions and not to persons or events. Ache-son (personal communication) for ex­ample, found that the fatality associated with a fractured neck of the femur was 11 per cent and 23 per cent respectively in two hospitals in the same region. Further enquiry showed that patients were discharged from one hospital sooner than from the other and that the first appeared to have better results because half their patients who died, died at home or in another hospital to which they had been transferred. The results at similar times after the event were, in fact, almost identical for each. Acheson was able to show this because he had developed a system in the Oxford region for linking together in a single record the different medical events of a patient’s life, irrespective of where or when they occurred; and we shall need to develop a similar system for the country as a whole if we are to make any serious attempt to assess the results of the component parts of the service.

    Controlled trials

    Another difficulty is that a new facility tends to attract a new range of patients, so that the results may appear to improve because the type of patient has changed. Doctors have recognised this in relation to the evaluation of new drugs and new vaccines, and to a lesser degree in relation to new operations; and have, therefore, accepted the need to examine the effect of new treatments by means of controlled trials with random allocation of different treatments to different patients. It is still not widely accepted, however, as a means of evaluating new and expensive services, such as the provision of coronary care units or coronary ambulances, despite the fact that it is the value of these services that needs to be most precisely measured. Consider, for example, the provision of a screening service for premalignant con­ditions of the cervix uteri. The patho­logical arguments that lead one to believe that the detection and removal of carcinoma-in-situ would prevent subsequent disability and death from cancer are strong; but they are not conclusive. Examination of the trend in mortality in British Columbia, where screening has been conducted energetically since the 1950’s, shows a decline in the rate that is very little different from that in other parts of Canada where screening was introduced later and much less inten­sively. The possibility remains, therefore, that the most fatal types of cancer develop rapidly without going through a prolonged pre-malignant phase or that women who delay reporting symptoms until the disease is too far advanced for effective treatment are also resistant to the blandishments of screening cam­paigns.

    If screening is really effective, we must try to ensure that the service reaches the women who need it by, for example, routine examination of all those who are admitted to hospital, in the same way as routine x-rays of the chest were arranged when we had a national campaign to reduce the incidence of tuberculosis. To arrange this in the form of a controlled trial requires cool thought and skilled organisation. It would not be easy, but it was done with notable success in relation to the fluoridation of water (“The fluoridation studies in the uk and the results achieved after eleven years”, Reports on Public Health and Medical Subjects, number 122, hmso, 1969) and there is no inexorable reason why it should not also be done with clinical ser­vices. If practising doctors can carry the onus of deciding to allocate treatment to individual patients at random, before the general introduction of a new drug, medi­cal administrators should be prepared to allocate services similarly to different areas for a trial period before providing them for the country as a whole.

    Morbidity rates

    So far I have concerned myself entirely with mortality, and I have done so intentionally because it must remain a principal indicator of progress for many years to come. It has, however, two limitations which, demand that we should also attempt to measure morbidity and monitor progress by measuring the extent to which it is relieved.

    First, as mortality is controlled, we are left with a proportion of young people whose life has been saved but whose enjoyment of it is limited ‘by physical or mental disability, the result of congenital abnormality, accident or disease. Secondly we have to deal with an ever increasing -proportion of old people who have accumulated heavy burdens of irreversible disability and whose mortality rates are difficult to influence because they are determined partly by genetic factors that limit longevity and partly by the experience of the whole of their pre­vious lives.

    Unfortunately, we now come up against Finagle’s laws—propounded first in relation to radio communication but, as Professor Knon pointed out, equally per­tinent to the field of medical care : (a) The information you have is not what you want (b) The information you want is not what you need (c) The information you need is not what you can obtain. Of these laws, the first is almost always true; but there are occasional exceptions to the second and third.

    The information we have consists of a few facts about hospital discharges derived from hospital activity analysis, and about absence from work derived from claims for sickness benefit with their accompanying medical certificates.

    The former are of little value for medical purposes, apart from the examination of fatality rates, until we can link together the events that affect an individual. Our other main source of information, sick­ness absence, is of almost no medical value at all, partly because the diagnoses, being on open documents, are often nonspecific and partly -because sickness absence is influenced by sociological and economic factors that have hardly begun to be investigated. Between 1954-5 and 1962-3, sickness absence, as measured by days of incapacity per person at risk standardised for age, remained practically constant, although the number of spells per 100 persons at risk increased by 22 per cent (see below). In the next six years, and particularly after 1966, both measures increased sharply. Decreases occurred in absence due to tuberculosis, pneumonia and appendicitis, while in­creases occurred in absence due to diabetes, arteriosclerotic heart disease, rheumatism, non-industrial accidents, and residual groups of infective and ill defined diseases. During this time unemployment increased and so did the scales of benefit, and it seems more likely that the increase was due to disclosure of previously hidden need or to a change in attitude to work than to an increase in disability (F. E. Whitehead, “Trends in certified sickness absence “, Social Trends, number 1, 1971). It was, at any rate, not just a British phenomenon, but was shared by other western European countries (P. J. Taylor, ” Some international trends in sickness absence”, British Medical Journal, number 4, 1969).


    rate standardised for age  as per cent of rate 1954-5

    all causes excluding influenza

    •                                                                  1954-5 1962-3 1968-9
    • days per person male                           100     105         126
    • days per person female                        100      98           111
    • spells per 100 persons female           100     121          145
    • spells per 100 persons male               100     122         144

    If, then, the information we have is not much help, what should we seek? The sort we have provides a measure of need that has been identified and more or less met. What we lack, or have in only rudimentary form, are two other measures: one of need that has been identified and met inadequately, the other of need that has not been identified at all. We have, of course, a record of people waiting for admission to hospital, but how many withdraw from the list to get treated, perhaps, elsewhere; and how many are never put on it at all until they have to be admitted as an emer­gency? How long do patients have to wait before an appointment can be arranged—with a general practitioner as well as with a consultant—and how often does a doctor not ask for a service that he would like to recommend because it is too difficult to obtain? How many old people are there at home incapacitated by arthritis, blind, or deaf, who could be relieved by an operation or a hearing aid; and how many come under medical care, whether general practitioner or consultant, and continue to have their symptoms unabated ? It is this sort of question that we ought to be able to answer, so that we can monitor the progress of the service by the pro­gressive change in the extent of unmet need.

    Occasionally, it may be possible to obtain answers from the records of a general practitioner, geriatric physician, or medical officer of health, but more often surveys are required of random samples of particular populations. One such survey has begun to be carried out by the Office of Population Censuses and Surveys (The General Household Sur­vey: introductory report, HMSO, 1973) on behalf of government departments which is intended to be maintained on a continuing basis. This covers 15,000 households a year, selected at random from addresses on the electoral register. In the first round of enquiries, questions were asked about the employment, leisure activities, education, country of origin, smoking history, family size aspiration, and income of all adults in each of the selected households. The questions about health and the use of the health services were elementary, but the answers can be elaborated at a later date by further interview and the nature of the questions can be changed from year to year.

    A sample of 15,000 households will be large enough for many purposes, but several years’ data will be needed to pro­vide information about the less common events or to enable comparisons to be made between regions. A larger survey of some 250,000 households was needed to provide detailed information about the frequency of physical handicap, and the extent to which handicapped people were receiving the various health and welfare services provided for them. This survey, which was carried out by Harris, Cox, and Smith (Handicapped and impaired in Great Britain, hmso, 1971) on behalf of the Health Departments in England, Scotland, and Wales, found that some 8 per cent of people living in private households complained of some degree of physical disability, the pro­portion increasing from 4 per cent at ages 16 to 64 years to 28 per cent at 65 years and over. Of those who complained, the proportion who suffered a severe handi­cap increased from 10 per cent at ages 16 to 29 years to 24 per cent at 75 years and over. Half of those who were severely handicapped had regular attention from their general practitioners and two thirds were helped by at least one of the other health and welfare services. Arthritis was easily the most common cause of impairment, but the survey provided no information about how many of the dis­abled could have been relieved by for example, reconstruction of the hip joint. For this and other similar purposes more intensive enquiry is needed and regional and area authorities that are taking their job seriously will want to carry out sur­veys of their own making use of the existing network of health visitors and general practitioners.

    Social Acceptability

    Complementary to medical outcome and constituting with it the quality of the ser­vice is the patient’s reaction to the out­come and the way it is achieved. At present our knowledge of social accept­ability is obtained in a variety of ways: through Parliament, lay representation on boards and committees, complaints and the machinery to investigate them, and the sensitivity of the health service staff to the feelings of their patients. None of these could be described as scientific. From April 1974, the number of lay representatives on management commit­tees has been reduced and public opinion is to be expressed on Community Health Councils, parallel to but independent of the management structure. The responsibility of elected representatives has been modified by the removal of public health from the control of local government and the inclusion of a few Local Authority nominees on the Area Health Authorities. In my view these changes will not provide much improve­ment (if any) in our means of assessment. If we are trying to introduce scientific principles into management to achieve economic efficiency—as the new management structure is supposed to do—we should also try to use them to assess its effects. Otherwise we shall run the risk of creating a relatively cheap service that is good at preventing and curing dis­ability, but which fails to care for it to the satisfaction of the public.

    Survey of public opinion

    The appropriate method is, I think, the medical equivalent of ” market research ” by which patients are asked their opinion of the service they have received and comparisons are made between the results obtained at different places and at different times. A beginning was made by the King’s Fund, when a questionnaire was distributed to 2,171 patients discharged from ten hospitals in five hospital regions (W. Raphael, Patients and their hospitals, King Edward’s Hospital Fund, 1969). Some typical results are shown below. Only 62 per cent (1,348) of the questionnaires were returned and it is possible that the fairly high level of patient satisfaction—with most aspects other than the wcs—is an artefact due partly to the poor response rate and partly to the fact that half the questionnaires had to be returned before the patients left hospital. Four years ago a similar questionnaire was distributed to nearly 5,000 patients discharged from the Radcliffe Infirmary, Oxford, with a view to comparing the service in different wards. On this occasion the questionnaires were mailed a few days after the patients had left hospital and 85 per cent were returned. The overall satisfaction rate was much the same as in the King’s Fund Study, but it was notable that only 75 per cent of the patients not admitted as emergencies said that they had had long enough notice of admission compared with 91 per cent in the earlier study.


    per cent of patients

    answering   question              yes       adding  critical remarks

    bed and bedding
    comfortable? 91 10
    enough privacy? 94 3
    enough wcs? 55 18
    supper satisfactory? 91 0
    enough choice of
    dishes? 75 11
    visiting arrangements
    suitable? 90 12
    reception at hospital
    satisfactory? 95 3
    told enough about your
    illness? 82 7

    Much could be learnt from the General Household Survey to which I have already referred. Often, however, we shall need to organise ad hoc studies like those carried out by A. Cartwright (Human relations and hospital care, Routledge and Kegan Paul, 1964), to discover people’s attitudes to hospital care and by Russell and Miller (in G. McLachlen and R. Shegog (editors), In the begin­ning, Oxford University Press, 1970), to assess the reaction of mothers—and their families—when women are dis­charged 48-72 hours after delivery. Such surveys will, I suspect, indicate a number of features that can be monitored objec­tively and independently. So far we have assumed that the length of time on wait­ing lists whether for admission to hos­pital, for an appointment at a hospital, or (of increasing importance) for an appointment with a general practitioner, provides a useful yardstick of the quality of the service that is being offered. The sort of questionnaire, to which I have referred will, I have no doubt, indicate many more. One that obviously needs to be monitored in Oxford is the length of notice that a patient receives when he is called for admission.

    Equality of service

    Another type of measure that should be used is the degree of variation in the quality of service throughout the country.

    It was a declared aim of the Service, when it was introduced, that any part of it should be available to everyone regard­less of “financial means, age. Sex, employment or vocation, area of residence, or insurance qualification” (National Health Service Bill: summary of the proposed service, HMSO, 1946) and this concept of equality contributed largely to its public welcome. That the act removed many of the inequalities that had existed under the previous system is evident; but it did not remove them all. Regional differences, for example, are still pronounced. Griffiths (“Inequalities and Management in the National Health Service”, The Hospital, 67, 1973) pointed out that the wealthiest Regional Board spent 69 per cent more per caput than the poorest in the early 1950s and still spent 64 per cent more in 1969/70 ; while Cooper and Culyer (” An economic assessment of some aspects of the National Health Service”, Health Ser­vices Financing, Report of British Medi­cal Association Advisory Panel, 1970) found that areas which were poorly served by one criterion tended to be poorly served by others.

    But is expenditure per capita the right criterion for judging the equality of the service? Should we not substitute equality of opportunity for equal treatment for patients at similar risk? It is, of course, easy enough to set up such an objective, but it is much more difficult to achieve. A beginning was made in 1971, when the Department of Health and Social Security introduced a formula designed to produce a more equitable distribution of funds between Regional Hospital Boards which incorporated elements based on population size, adjusted for the flow of patients between regions and weighted for age and sex, average daily occupied beds and out­patient attendances, and the turnover of patients. Much research will, however, be needed, before an effective formula can be found—including local surveys to determine need. If, as Hart suggests, an ” Inverse Care Law” still operates in that general practitioners in the areas with most sickness and deaths tend to have larger lists and less hospital support a great deal remains to be done before the initial aim of the Service is achieved (J. T. Hart, ” The inverse care law”, Lancet 1, 1971).

    Economic Efficiency

    Consider now the use of monitoring to improve economic efficiency. I am not concerned here with the standard process of ‘budgetary control to check that money is spent in amounts that have been approved, but with the collection of information about the ways in which pre­vention, care, and cure are delivered, and their costs and corresponding bene­fits; in other words with the application of cost benefit analysis to the procedures of the Health Service.

    To the simple minded economist this is a perfectly straight-forward proposition.

    All we have to do is to establish produc­tion functions for the various activities of the service, elicit the preference function of the community for the output of the system, and then maximise the difference between total social benefits and total social costs. True enough (or so economists tell me), but not very helpful.

    In practice it is extremely difficult to implement for several reasons, two of which are of particular concern to the medical profession.

    First the production functions, by which is meant the relationship between the input into the system in terms of doctors, nurses, drugs and so forth and the out­come in terms of the improvement in the health status of the patient, is difficult to quantify because of the need to apportion joint costs of common inputs between different outputs. (The economist would insert the qualification that the cost points were marginal, a technical consideration of practical importance which would further increase the difficulties). Secondly, the preference function of the com­munity, by which is meant the relation­ship between the community’s relative preferences for alternative objectives, is a will o’ the wisp, because we do not know how to formulate specific health objectives in such a way that they repre­sent genuine alternatives between which the community may choose.

    The cost of inputs

    Consider the first problem. This is the one which Cochrane described so pungently in his Rock Carling Lecture (Effectiveness and efficiency, Nuffield Provincial Hospital Trust, 1972). So long as the outcome was satisfactory, doctors have given little thought to the cost of the means by which it was achieved(except occasionally to the cost of drugs) and a great deal of work ought to be done to provide information about the relative costs of obtaining the same out­come by different means. Cochrane listed the three main causes of wasteful input as: the use of ineffective remedies, the incorrect place of treatment (in-patient when out-patient or home treatment would suffice), and incorrect duration of stay in hospital—to which we might add the incorrect duration of time off work whether in hospital or out.

    The potential saving from shortening hospital stay is well illustrated by the data for Scottish hospitals reported by Heasman and Carstairs (” Inpatient man­agement; variations in some aspects of practice in Scotland”. British Medical Journal 1, 1971). The median duration of stay for the surgical treatment of peptic ulcer under the care of surgeons who treated at least 20 patients during a year varied between surgeons from 6 to 26 days, while the median duration of stay for the medical treatment of myocardial infarction under the care of physicians varied between physicians from 10 to 36 days. Very little of this variation can be attributed to chance and it seems unlikely that the patients treated by different con­sultants varied so greatly in character. It does not necessarily follow that the shortest duration of stay was the best, from the point of view of medical out­come or of social acceptability—but at least the possibility of reducing the longest durations can be considered. The value of the Scottish system, in which information of this sort is sent confidenti­ally to each consultant, is that it provides him with the opportunity of comparing his own practice with that of his col­leagues. Without this information, the consultant is deprived of the option of making rational adjustments to his actions in the future. With it, he can modify his treatment or, if doubtful of the effect, can undertake a randomised controlled trial in collaboration with his colleagues. Such trials are now being carried out by Holland and his colleagues at Frimley to determine the optimum duration of stay following elective sur­gery for hernia or varicose veins (G. K. Matthew, Portfolio for Health, Oxford University Press, 1971).

    Annual Throughput Of General Medical Patients Per Bed

    Regional hospital                      annual throughput

    Princess Margaret (Swindon)   __ 37.2
    Kettering General               ______ 35.1
    Northampton General         _____ 35.2
    Wycombe General                _____ 29.2
    Royal Berkshire                     _____ 29.2
    Stoke Mandeville                  _____ 23.2
    Horton General                 _______ 19.1
    Amersham General______ ____ 18.6

    Teaching hospital         annual throughput

    Radcliffe Infirmary (Oxford)         37.0
    Cardiff Infirmary                                 36.6
    RVI (Newcastle)                                 30.5
    Royal Infirmary (Sheffield)             29.3
    Addenbrooke’s (Cambridge)          29.0
    Royal Infirmary (Bristol)                 29.0
    Churchill (Oxford)                               21.2
    Queen Elizabeth (Birmingham)      18.7
    Comparisons on a larger scale between hospitals and between regions are docu­mented regularly in the publications of the Department of Health and Social Security (Digest of Health Statistics for England and Wales, 1971, HMSO, 1973) and in the records of the individual regional boards. One of the most con­venient indices of performance is the annual throughput per bed: that is, the number of patients discharged per annum divided toy the average number of avail­able beds. I am grateful to my colleague Dr Jeremy Cobb for illustrative figures for the throughput for general medicine in a number of hospitals, shown in the table above. I cite these not to show the differences, but to emphasise the danger of drawing superficial con­clusions. It is only too easy to conclude from such figures that Princess Margaret Hospital, Swindon, and the Radcliffe Infirmary are providing the National Health Service with a more efficient ser­vice (if the costs were equal) than other hospitals of the same type, just as it is easy to conclude that Wales with 3.7 acute specialty beds per 1000 population could reduce its number to the 2.3 per 1000 that is provided in the Oxford Region. Obviously in comparing hos­pitals we must consider the type of patient that is being admitted and the local need; but we must do much more than that before we can attempt to fix a norm. We must at least try to find out whether the high rates of throughput result in greater re-admission rates, what the strains are on the staff, and whether the  general practitioners, patients and relatives are pleased with the quick dis­charge or not. One undesirable effect of the rapid throughput at the Radcliffe Infirmary, to which I have already referred, is that patients receive inade­quate notice of their date of admission. In economics, as in medicine, we can reach sensible conclusions only when we compare like with like and many aspects have to be taken into account before it can be accepted that the cheaper pro­cedure is indeed the most efficient.

    The sort of comparisons I have described are all in effect attempts to examine different means of achieving the same outcome, with the corollary that we should choose the cheapest, subject to it being socially acceptable. It is something that health workers will need to attend to more in the future, so that money can be saved and used to the best advantage within the service.

    Evaluation of output

    The second problem is much more diffi­cult, but without a solution there is no possibility of carrying out a proper cost-benefit analysis of the service as a whole.

    What needs to be done is to find a means whereby the benefits of the service can be measured in the same units as are used to estimate its costs. In other words we need to express in the same units the value of preventing mental deficiency in a child, of saving the life of a 70 year old man, and of relieving the pain associated with a chronic duodenal ulcer, or in Card’s words we need to estimate the ” utility” of particular states of health and to establish their monetary equiva­lents (Computer assisted diagnosis and pattern recognition : the computing approach to clinical diagnosis, Proceed­ings of the Royal Society, London B, 184, 1973). Only by this means can we hope to choose rationally between differ­ent outcomes for the same level of ex­penditure.

    The simple economic benefit of getting a man back to work is easily calculated, but is clearly unacceptable as the sole measure of utility for many reasons, in­cluding the negative value which it would set on the life of all those who have retired. To it, we have to add a humani­tarian value and it is this which is so fiendishly difficult, if not impossible, to express in comparable units. The diffi­culty has been well illustrated by Wil­liams and his colleagues at the Univer­sity of York (Culyer, Lavers and Wil­liam, ” Social indicators: health “, Social Trends, 2, HMSO, 1971). First, we should have to establish an index of ill health that would allow both for its intensity and duration. The difficulty, of course, lies in measuring intensity which has the two dimensions of painfulness and restriction of activity, including within the latter psychological as well as physical restric­tions. If it could be established we should have a scale along the following lines.


    • 0      normal
    • 1      normal activity with some discomfort
    • 2-8 intermediate     categories     reflecting various degrees of pain and restriction
    • 9    unconscious

    These measures of society’s judgment, it will be noted, are not just rankings of preference; they are quantitative meas­ures of relative importance of avoiding one state rather than another, because the cost-benefit analyst will use them in his equations as weights. That is to say, state 2 must be just twice as bad as state 1, and state 10 ten times as bad.


    measure of medical intervention

    Having obtained our index, we then have to estimate the time it would have lasted in the absence of treatment. The graph is taken from the paper by Williams and his colleagues and shows how the final value of the treatment is secured by sub­tracting the index points for the extra discomfort and disability produced by the treatment from those predicted in its absence. In the illustrated example the condition is diagnosed at point 0, and the first two weeks are spent in investi­gation and arranging for treatment. In the absence of treatment there is steady deter­ioration from week 7 to death at week 12; with treatment there is increased dis­ability and pain for 4 weeks (presumably following an operation) and normal healthy life from week 11 to the com­pletion of the expected span for a person of that age and sex after nm years. Fin­ally, having obtained our index, we shall have to weight it to take account of the effect of the patient’s health on his relatives and the community at large.

    Frankly, I do not believe that such a proceeding is possible—certainly not in my life time—though I respect the reasons which lead serious investigators to undertake research into the means by which it could be achieved. The trouble is that different outcomes are incommen­surate. Being dead is not, and never will be, just ten times—or a hundred times— as bad as having some discomfort in the course of normal activity. Administrators, however, still have to allocate limited resources and to decide the order of their priorities. Decisions have to be made sub­jectively and in practice are the result of a judicious balance of competing pres­sures. It is a field in which gardening is real, and botany is bogus; but we should at least try to help the gardener by clari­fying costs and describing the output pre­cisely, even though we cannot summarise it in a single quantitative measure.


    Monitoring, medical intelligence, inform­ation science, call it what you will, the subject is enormous and, with the except­ion of our national vital statistics, the uses of which were seen clearly by Farr more than a century ago, it has hardly begun to be developed. No doctor would, I think, have been more interested in it than Somerville Hastings, for he was never content to put up with the second best when factual information was avail­able to show that something better could be achieved. He would, I think, have wanted to lay particular stress on one aspect of the subject: the measurement of progress towards the goal of providing equal opportunity for equal treatment, “regardless of financial means, age, sex, employment or vocation, area of resid­ence, or insurance qualifications “. How such measurement can be made will be, I hope, one of the primary tasks of the specialists in community medicine of the new Regional Health Authorities, aided by the corresponding University Depart­ments. Equality, however, is not every­thing. Central though it is to the concept of the service, it must not be allowed to become the sole criterion. Progress depends on innovation and it is also important to encourage local initiative to set new standards and to prove their worth.

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    Presented to Parliament by the Minister of Health and the Secretary of State for Scotland by Command of Her Majesty January 1956

    Cmd. 9663


    C. W. GUILLEBAUD, Esq., C.B.E. (Chairman) Dr. J. W. COOK, F.R.S. Miss B. A. GODWIN, O.B.E. Sir JOHN MAUDE, K.C.B. Sir GEOFFREY VICKERS, V.C.

    The first section of the report, not reproduced here, is devoted to the Memorandum “The Cost of the National Health Service in England and Wales” by Brian Abel-Smith and Richard Titmuss, (Cambridge, 1956)


    1. We summarise below the main features which have emerged from this study of the trends in the cost of the National Health Service in England and Wales from 6th July, 1948 to 31st March, 1954; and some of the possible trends in the future. We do not propose to repeat in the summary all the definitions, assumptions, and qualifications on which the conclusions are based. These will be found by referring back to the body of the text of Part I of our Report and, where necessary, by reference to ” The Cost of the National Health Service in England and Wales” by B. Abel-Smith and R. M. Titmuss. We would emphasise, however, that all who wish to use these conclusions should read them in conjunction with the assumptions, etc., to which we have just referred.


    General (1)   In England and Wales, the current net cost of the National Health Service in productive resources was £371 1/2  million in 1949-50.   In subsequent years it rose by roughly £15 million each year, reaching £430 1/2 million in 1953-54 (para. 17).

    (2)     The rise of £59 million in the current net cost of the Service over the four years was the combined result of a larger rise (£77 million) in gross costs, offset by a saving of £18 million arising from new or increased charges to beneficiaries (para. 18).

    (3)     Expressed as a proportion of total national resources (the “gross national product”) the current net cost of the Service fell from 3 3/4 per cent. in 1949-50 to 3 1/4 per cent, in 1953-54 (para. 20).

    (4)     During the period under review there was a considerable general rise in prices.   An attempt has been made to estimate the effect of price increases on the cost of the Service, recalculating expenditures at constant (1948-49) prices and wages.   The current net cost of the Service, expressed in “real” terms in this way, was only £11 million greater in 1953-54 than in 1949-50. Thus, the net diversion of resources to the National Health Service as a whole since 1949-50 has been of relatively insignificant proportions (para. 23).

    (5)     There was a rise of nearly 2 per cent, in population during the period under review.   Allowing for this and for changes in the age structure of the population, the cost per head at constant prices was almost exactly the same in 1953-54 as in 1949-50 (para. 24).

    (6)     Trends of expenditure have been very different in different parts of the Service.    Between 1949-50 and 1953-54 net current expenditure on the hospital services rose by £71 million, and that on local authority services by £11 million, while expenditure on Executive Council services fell by £24 million.   The movement of total Health Service expenditure thus represented the combined result of these divergent trends, a fact which needs to be taken into account in considering possible future trends (paras. 25-26).

    The cost of the Hospital Service

    (7)     A major part of the rise in hospital expenditure was attributable to rising prices (£41 ½ million of the £71 million increase from 1949-50 to 1953-54) but the rise in the real volume of goods and services purchased (£29 ½  million at 1948-49 prices) was also substantial (para. 29).

    (8)     Throughout the period under review, revenue from charges has contributed in only a very small degree towards the gross cost of the hospital service ; little more than 1 per cent, in fact (para. 27). (9)  Approximately 60 per cent, of the increase in resources purchased for the hospitals (£17 1/2 million of the £29 1/2 million) consisted of medical goods and services (para. 30). (10)  In the hospital service, the cost of medical staff increased by £4 million between 1949-50 and 1953-54.   This rise is attributable in the main to a substantial increase in the number of staff employed, both part-time and whole-time.    The increase in labour services as a whole accounts for three-quarters of the increase in resources used in the hospital service at constant prices.    The categories of staff which increased most were nurses and domestic staff (paras. 32-34).

    The Cost of the Executive Council Services

    (11)     Current net expenditure on Executive Council services fell by £24 million between 1949-50 and 1953-54.    Of this, £17 million represented a transfer of cost to beneficiaries by means of the charges introduced in 1951-52, but there was also a decline of £7 million in the gross cost of the services (para. 38).

    (12)     The different Executive Council services show different trends in expenditure.   While the pharmaceutical service and the general medical service each increased between 1949-50 and 1953-4 by £6 million, expenditure on the dental service fell by £24 million and that on the ophthalmic service by £13 million (para. 39).

    (13)     The rise of £6 million in the cost of the general medical service was entirely due to a rise in “price”, i.e., to the increased cost per patient-year resulting from the Danckwerts award to general practitioners (para. 41).

    (14)     The rise of £6 million in the net cost of the pharmaceutical service resulted from a rise of £12 million in gross expenditure, partly offset by £6 million in revenue from charges.    Owing to lack of information, it is impossible to give a complete explanation of the rise in gross expenditure.   It has been estimated, however, that the rise may have been attributable broadly to the following factors: 36 per cent, to an increase in the amount prescribed; 35 per cent, to the changed composition of proprietary and non-proprietary articles ; a decline of 11 per cent, to lower rates of payment to pharmacists ; and an increase of 40 per cent, to other factors (including the increased use of new and expensive drugs) (paras. 42-45).

    (15)     The decline of £24 million in the cost of the dental service over the four years was partly accounted for by £6 million revenue from the charges introduced in 1951 and 1952, but the major part (£18 million) resulted from a fall in gross expenditure. Of this figure, £13 million was the effect of the reductions in rates of payment to the dentists. The principal area of saving was in the cost of dentures which declined substantially.   There is evidence that the decline in work done by the service was not simply due to the introduction of charges; demand was already falling before charges were intro­duced, after the accumulated arrears of needs had been largely dealt with (paras. 46-50).

    (16)     The fall of £13 million in the net cost of the ophthalmic service was partly accounted for by £4 million revenue from charges, but mainly by a decline in gross expenditure of £9 million.  This decline was due almost entirely to a reduction in the amount of work done, chiefly in the supply of spectacles.    From the evidence examined it would seem that some decline would have taken place even if charges had not been introduced (paras. 51-56).

    (17)  A major part of the rise in expenditure by local health authorities (£7 million of the £11 million increase from 1949-50 to 1953-54) was the result of rising prices.    The rise of £4 million in the real volume of goods and services purchased occurred principally in the ambulance, domestic help and home nursing services (paras. 57-58).



    (18)     The amount of capital expenditure by the National Health Service has been relatively small throughout the five years.   This expenditure has two components, expenditure on building up stocks which has fluctuated between £4 million and minus £2 million in different years, and a fairly steady rate of about £12 million a year of capital expenditure on fixed assets (paras. 59-60).

    (19)     As prices of building work and other capital assets have risen substantially over the period, the rate of capital expenditure in real terms has progressively declined.   As a proportion of national fixed capital formation, the fixed asset expenditure of the Health Service has been small and declining (from 0-8 per cent, to 0.5 per cent, in the five year period) (paras. 60-61).

    Hospital capital investment

    (20)  Fixed capital expenditure is almost wholly attributable to hospital work.   About 10 per cent, of expenditure has been for major extensions to hospitals and a further 21 per cent, of expenditure has been for ward accom­modation.  Expenditure on accommodation for staff has accounted for 19 per cent of the total.

    (21)  The rate of fixed capital expenditure on hospitals has averaged about one third of the pre-war rate in real terms.   Approximately 45 per cent of all hospitals were originally erected before 1891; and many are regarded by expert opinion as seriously in need of replacement or radical reconstruction (paras. 62-69).


    (22)     We cannot attempt to forecast how the cost of the National Health Service is likely to vary in, say, the next twenty years; we can only point the way to some of the factors which will have a bearing on the future cost— e.g., the rate at which the country may be able to make good the existing deficiencies in the Service; the rate at which the hospital capital investment programme can be expanded; fluctuations in the level of wages and prices; changes in medical techniques and in the incidence of disease and accidents : possible variations in the rates of charges paid by patients ; the effect of population changes and other social factors on the use made of the Service, etc. (paras. 76-78).

    (23)     From an analysis of the hospital population on the census night, 1951, the authors of ” The Cost of the National Health Service in England and Wales” have considered in particular the effect of demographic and other social factors on the demand for hospital care, and the effect of projected population changes on the future cost of the Service (paras. 79-89).   Their main conclusions are summarised below: —

    (a) Compared with the demands made by single men and women (and, to a lesser extent, the widowed) the proportion of married men and women in hospital even at age 65 and over is extremely small.

    (b) Among married men and women, the rise in the proportion in hospital with advancing age is not at all dramatic; it does not reach very high levels even after age 75. only 1.5% of married males aged 75 years and over were in National Health Service hospitals, while the corresponding figure for married females was not more than 2.4 per cent.

    (c)  For all types of hospital and in relation to their numbers in the total adult population, the single, widowed and divorced make about double the demand on hospital accommodation compared with married people.

    (d) About two-thirds of all the hospital beds in the country occupied by those aged over 65 are taken by the single, widowed and divorced.

    (e)  The bulk of the population of mental and “chronic” hospitals are single people. Of the single and widowed men and women aged over 65 needing hospital care, most are to be found in these two types of hospital. The married state and its continuance thus appear to be a powerful safeguard against admission to hospitals in general and to mental and “chronic” hospitals in particular.

    (f) An analysis of the Government Actuary’s estimates of the population of Great Britain in 1979 shows that among those who make much the heaviest claims on hospital accommodation, the number of single women of pensionable ages will actually decline, while the number of single men of such ages will increase by only a negligible figure.

    (g) An attempt is made to estimate the order of magnitude of additional future costs to the Service arising solely as a result of projected population change taken as an independent, isolated factor. Changes in age structure by themselves are calculated, on a number of drastically simplified assumptions, to increase the present current cost of the National Health Service by 3 1/2 per cent, between 1951-52 and 1971-72. A further increase of 4 1/2 per cent, is attributable to the projected rise in the total population of England and Wales (using the official projection figures). In total, therefore, popula­tion changes by themselves are not likely to exert a very appreciable effect on the future cost of the National Health Service.



    93.  Our remaining terms of reference are ” to suggest means, whether by modifications in organisation or otherwise, of ensuring the most effective control and efficient use of such Exchequer funds as may be made available; to advise how, in view of the burdens on the Exchequer, a rising charge upon it can be avoided while providing for the maintenance of an adequate Service; and to make recommendations.”

    An “Adequate Service”

    94.  Before we can deal with the many questions implied in these terms of reference, we must consider at the outset what is meant by the provision of an “adequate service “. If the test of “adequacy” were that the Service should be able to meet every demand which is justifiable on medical grounds, then the Service  is clearly inadequate now, and very considerable additional expenditure (both capital and current) would be required to make it so. We need only mention the deficiencies which would have to be made good in the provision of mental hospitals, mental deficiency institutions, services for the chronic sick, hospital out-patient departments, domiciliary health services, the dental services, etc. To make the Service fully “adequate” in these terms, a greatly increased share of the nation’s human and material resources would have to be diverted to it from other uses.

    1. Nor is it clear that such a service, even if it were to become “adequate” by this criterion, would remain so without continually increasing expenditure.    The growth of medical knowledge adds continually to the number and expense of treatments and, by prolonging life, also increases the incidence of slow-killing diseases.  No one can predict whether the speeding of therapy and the improvement of health will ultimately offset this expense; there is at present no evidence that it will; indeed, current trends seem to be all the other way.  There is every reason to hope that the development of the National Health Service will increase the years of healthy life per head of the population, but there is no reason at present to suppose that demands on the Service as a whole will be reduced thereby so as to stabilise (still less to reduce) its total cost in terms of finance and the absorption of real resources.

    2. It should not be forgotten, however, that the National Health Service is a wealth producing as well as a health producing Service. In so far as it improves the health and efficiency of the working population, money spent   on the National Health Service may properly be regarded as “productive”—even in the narrowly economic sense of the term.

    3. But even if it were possible, which we very much doubt, to attach a specific meaning to the term ” an adequate service ” at a given moment of time, it does not follow that it would remain so for long with merely normal replacement.   There is no stability in the concept itself: what might have been held to be adequate twenty years ago would no longer be so regarded today, while today’s standards will in turn become out of date in the future. The advance of medical knowledge continually places new demands on the Service, and the standards expected by the public also continue to rise.

    4. We conclude that in the absence of an objective and attainable standard of adequacy the aim must be, as in the field of education, to provide the best service possible within the limits of the available resources. It is clear that the amount of national resources, expressed in terms of finance, manpower and materials, which are to be allocated to the National Health Service, must be determined by the Government as a matter of policy, regard being had to the competing claims of other social services and national com­mitments, and to the total amount of resources available. The development of the National Health Service is one among many public tasks in which objectives and standards must be realistically set and adjusted as time goes on both to means and to needs.

    It is still sometimes assumed that the Health Service can and should be self-limiting, in the sense that its own contribution to national health will limit the demands upon it to a volume which can be fully met. This, at least for the present, is an illusion. It is equally illusory to imagine that everything which is desirable for the improvement of the Health Service can be achieved at once.

    Our main task

    99.It appears to us that the fundamental questions inherent in our remaining terms of reference are: —

    (i) In what manner should the money allocated annually to the National Health Service be distributed between the competing needs of each branch of the Service and the various authorities within each branch?

    (ii) What form of organisation will most efficiently and most economi­cally provide and control these services?

    (iii) By what means can the Health Ministers, Parliament and the public be assured that the Service is providing the best value for money spent?

    (iv) Where, if anywhere, is there any opportunity for effecting substantial savings in expenditure, or for attracting new sources of income?

    Distribution of available resources

    100.  As we have already suggested, the total amount of the country’s resources to be allocated annually to the National Health Service is, and must remain, the responsibility of the Government, which must relate the needs of the National Health Service to other competing demands. As it would be impracticable to discuss the distribution of these resources among the various authorities in the National Health Service until it has been decided what form of organisation will use these resources most efficiently and economically, we pass straight on to a review of the administrative organisation itself.


    101.  Before examining in detail the services provided under the three branches of the National Health Service, we consider first the basic administrative structure of the Service as a whole and the proposals made to us for radical alterations.

    England and Wales

    1. Very briefly, the present system of organisation in England and Wales is as follows: — At the head of the Service is the Minister of Health, advised by the Central Health Services Council and a number of Standing Advisory Committees. In accordance with the National Health Service Act, 1946, it is the Minister’s duty ” to promote the establishment in England and Wales of a comprehensive health service designed to secure improvement in the physical and mental health of the people of England and Wales and the prevention, diagnosis and treatment of illness, and for that purpose to provide or secure the effective provision of services” in accordance with the provisions of the Act. 103. The services provided under the Act (which are available to everyone in the country and are not dependent on any insurance qualification) may be divided into three main branches: —

    (i) The Hospital, Specialist and Ancillary Services provided through the agency of 14 Regional Hospital Boards, 36 Boards of Governors of teaching hospitals and 388 Hospital Management Committees. The Chairmen and members of Boards of Governors and Regional Boards are appointed by the Minister, and the Chairmen and members of Hospital Management Committees by their Regional Boards. The Chairmen and members of both Hospital Boards and Management Committees give their services in a voluntary capacity.

    (ii) The Family Practitioner Services (ie the general medical service, pharmaceutical service, general dental service, and the supplementary ophthalmic service) administered by 138 Executive Councils. The members of the Councils serve in a voluntary capacity, and are appointed by the Minister, the local authority, and certain local professional committees. The Chairman is elected by the members of the Council. There is one Executive Council for each local health authority area except in the case of 8 Executive Councils each of which covers the areas of two authorities.

    (iii) The Local Health Services (i.e., maternity and child welfare, domi­ciliary midwifery, health visiting, home nursing, domestic help, vaccination and immunisation, prevention of illness, care and after care, ambulance transport, local mental health services, and health centres) provided by 146 local health authorities—i.e., the councils of counties and county boroughs and the Council of the Isles of Scilly.

    These three branches of the Service are described more fully in later sections of the Report where we also outline briefly the public services as they existed before the Appointed Day. For the moment, we are concerned only with the general pattern.


    1. The net cost of the local health services (see (iii) above) is met by the local health authorities themselves with the aid of a 50 per cent, grant from the Exchequer.   Most of these services are provided free, but charges may be made for some of them.

    The Exchequer finances in full the remaining services except for certain payments made by patients ; and for some receipts which are appropriated in aid of the Service, the largest being an annual payment from the National Insurance Fund (£36,218,000 in England and Wales in 1953-54), and the superannuation contributions paid by employers and persons engaged in the Service (£23,597,101 in 1953-54).


    1. At the head of the Service in Scotland is the Secretary of State, advised by the Scottish Health Services Council and a number of Standing Advisory Committees.

    2. The hospital specialist and ancillary services (including clinical teaching facilities)  are provided through  the  agency  of 5  Regional  Hospital Boards and 84 Boards of Management.   There are no separate Boards of Governors for the administration of the  teaching hospitals  in  Scotland. Medical Education Committees have, however, been constituted for each of the 5 Regions to advise the Regional Boards on the administration of the hospital and specialist services in their areas in so far as they relate to facilities for teaching and research.   The members of the Committees are appointed in part by the Universities, in part by the Regional Boards and in part by the Secretary of State.

    3. The family practitioner services are administered through 25 Executive Councils, and the local health services by 55 local health authorities (i.e., the 31 county councils, (including 2 joint councils) and the town councils of the 24 large burghs). Because of the relatively large number of local health authorities in Scotland, responsibility for the provision of the ambulance services and health centres rests with the Secretary of State and not with the local health authorities. The ambulance service is provided through the agency of the Scottish Ambulance Service in association with the hospital and specialist services.

    4. The finance of the Service in Scotland is organised essentially on the same basis as in England and Wales.


    Proposals for Basic Reorganisation

    109. In reviewing the basic structure of the Service and proposals for its modification, we have been very conscious of the fact that the National Health Service has been operating for only seven years, and that, in the early years, many of the newly constituted authorities could not reasonably be expected to do more than cope with the flood of day-to-day problems which came before them.    The evidence we have had suggests that, only in the last two or three years, have many authorities begun to consider seriously their long-term problems, to make plans for meeting them, to improve co-operation between the various branches of the Service, to effect economies, and to make the best use of the existing administrative machinery. The real test of the present organisation therefore lies not so much in the experience of the last seven years as in the results likely to be achieved in the next seven years.   If fundamental changes were now to be made in the administrative structure, new authorities would find themselves faced with new problems and the whole process of adjustment and adaptation would have to be gone through all over again.

    110. Moreover, despite certain weaknesses to which we shall refer later, our evidence has made it clear that the Service’s record since the Appointed Day has been one of real and constructive achievement.   As we have shown in Part I of our Report, the rise in the cost of the Service between 1948 and 1954, when expressed in real terms (i.e., at constant prices), was quite small; while many of the services provided were substantially expanded during this period.

    111. We believe therefore that unless an overwhelming case could  be made out for any basic reorganisation of the Service, it would be in the best interests of the Service to leave the present administrative  structure undisturbed.   We might add that this view was shared by the great majority of authorities and organisations who submitted evidence to the Committee.

    1. With these considerations in mind, we have examined the following proposals for radical reorganisation of the Health Service: —
    1. That there should be one statutory authority responsible locally for the administration of all the branches of the National Health Service.
    2. That responsibility for the hospital service should be transferred either immediately or by stages to the local health authorities.
    3.  That the work of Executive Councils should be transferred to the local health authorities or Regional Hospital Boards.
    4. That the National Health Service functions exercised by the Central Departments should be transferred to a National Board or Corporation.

    Proposed unification of the Health Services

    113.  Many   people,   both  before and   after   the   Appointed   Day,   have criticised the tripartite structure of the National Health Service because of

    1. the difficulty of integrating the services provided by the three branches of the National Health Service, particularly in relation to the maternity and child welfare, tuberculosis, mental and aged sick services;
    2.  the danger of duplication  and overlapping between  the three branches of the Service ;
    3.  the difficulty of adjusting priorities within the Health Service, when three separate administrative organisations—two financed wholly by the Exchequer and the third partly by the Exchequer and partly by the local rates—are responsible for the provision of the services;
    4. the danger that the Service may develop into a National Hospital Service, with all the emphasis on curative medicine, instead of a National Health Service in which prevention will play as important a part as cure.
    1. In order to solve these major problems of the Service, some have recommended the appointment of statutory ad hoc health authorities, on the lines of the present Regional Hospital Boards, with their members appointed by the Health Ministers (We use the term “Health Ministers” throughout the Report to signify the Minister of Health and the Secretary of State for Scotland) and their expenditure financed wholly by the Exchequer.   We have been told that these all-purpose authorities would be in a position to ensure that the hospital, family practitioner, and home health services(We use the term ” home health services” to denote the domiciliary health services (including maternity and child welfare clinics) provided by local health authorities under the National Health Service Acts)  are properly integrated, and that the health services generally are organised and financed in the most efficient and economical way possible. They would, for example, be able to balance the needs of the institutional and domiciliary services without being influenced by such financial considerations as the probable burden on the local rates.

    2. Even apart from practical considerations such as the question of the composition of such all-purpose authorities, we consider this suggestion unacceptable because it would remove from the local health authorities their important domiciliary health services and would create a division between different types of public health work at least as unfortunate as the present divisions within the National Health Service.  It would, moreover, drive a wedge between the home  health  services  now  provided  by  local  health authorities under Part III of the National Health Service Act and the welfare services provided by local authorities under Part III of the National Assistance Act—a division which would, in our view, be calamitous.   The aim in future should be to combine the local authority health and welfare functions as closely as possible, and we could not give our support to any recom­mendation which would seek to tear them apart.

    3. For these reasons, we conclude that the only form of major reorganisation which calls for serious discussion is one which would integrate the three branches of the National Health Service without depriving the local authorities of their existing domiciliary health functions—i.e., a reorganisation which would add responsibility for the hospital service and/or the Executive Council services to the present duties of the local health authorities.

    Proposed transfer of the Hospital Service to the Local Health Authorities

    1. The witnesses who have argued the case for the transfer of the hospital service to the local health authorities have contended that there is a fundamental  weakness in its present administrative  structure ;  namely, that the Regional Hospital Boards and the Hospital Management Committees (Boards of Management in Scotland) who are responsible for managing the hospital service are not responsible for finding the money to finance it, and have no direct responsibility to the electorate for their actions.   It is suggested, there­fore, that the hospital service should take its proper place with other local health, welfare, and social services under the unified administration of the local authorities whose members are democratically elected by the public, and who can be relied upon to provide an efficient and economical service.   This would be in line with the history of the development of the health services in this country, and also in keeping with our tradition of democratic government.

    2. These witnesses go on to point out that the present division between the hospital service and the services provided by local health authorities under Part III of the National Health Service Act has had other unfortunate repercussions, e.g.: —

    (a)  Too great an emphasis has been placed on the curative aspects of the Health Service and too little on prevention. The clinicians in the hospital service are said to be taking less and less interest in the social and preventive aspects of ill-health and to be increasingly concerned only with the treatment and cure of disease.

    (b)  It is obviously in the interests of economy and efficiency that, wherever possible, patients should be treated in their own homes by their general practitioners (with the support of the local health authority services) in preference to their being admitted to hospital where the maintenance costs are so high. As the hospital service and the local health authority services are provided through two separate organisa­tions, however, and as the first is financed wholly and the latter only 50 per cent, by the Exchequer, there is no financial stimulus to ensure that developments are carried out where they are most needed, i.e., in the domiciliary services of the local health authorities. Some authorities may be reluctant to develop their home health services and thereby to increase the local rate burden when the avowed intention is to ease the load on the hospital service which is 100 per cent. Exchequer financed. The present administrative structure and its method of finance may therefore be distorting the proper priorities in the development of the National Health Service as a whole.

    (c)  It is difficult to  provide  an  integrated  service for  patients when responsibility for its provision is divided. In the case of the maternity services, for example, the hospital authorities are responsible for institutional confinements and consultant services; the local health authorities for domiciliary and clinic services; and the Executive Councils for the family practitioner service. In the case of the tuberculosis services, the hospital authorities are con­cerned with the curative aspects and the local health authorities with prevention. In the services for the aged sick the responsibility is shared between hospital authorities, local health authorities, wel­fare authorities, and Executive Councils. In the services for the mentally ill and mentally deficient there is division of responsibility again between the institutional and domiliciary services.

    1. All these services it is argued, could be organised more efficiently and to the benefit of the patient, if one authority were responsible for their provision. Moreover, it would then be possible to build up the preventive services to a level which would attract sufficient professional officers of the highest calibre; and to give hospital doctors a better understanding of the socio-medical aspects of ill-health.

    2. Again, if the hospitals were transferred to the local authorities, the services of the local authority Treasurer, Engineer, Architect, Legal Adviser etc. would be available to the hospital service as to any other local authority service, with a consequent saving in salaries and staff now duplicated at Hospital Management Committee level.

    3. The witnesses who made this proposal appreciated that the finance of a local authority hospital service would present a serious problem.  The product of a penny rate in England and Wales is £1,417,798 while the annual cost of the hospital service is in the region of £300 million.   Clearly, therefore, the local authorities would not be able to bear this additional financial burden without substantial Exchequer support.  One suggestion put forward in oral evidence to the Committee was that the Exchequer might pay to the local authority a unit grant in respect of each hospital bed maintained by the authority, covering a substantial proportion of the total running costs—say 80 per cent.   The additional expenditure incurred by the local authority over and above the Exchequer contribution would rank for the present 50 per cent.  Exchequer grant.  The poorer authorities would be further helped through the operation of the Exchequer Equalisation Fund.

    4. For the planning of a local authority hospital service, it was suggested to us that Joint Authorities should be appointed regionally to decide how and where the hospital services should be developed in the Regions.    Once a decision had been reached by the Joint Authority (e.g., to construct a new hospital) the local authority of the area in question would be responsible for providing the building ; and the costs, both capital and current, would be shared by all the authorities whose ratepayers made use of the beds. Capital works would of course be financed by loan.

    The contrary view

    1. The great majority of our witnesses, however, while admitting the existence of many of the difficulties mentioned above, have firmly maintained that the time is not ripe for any radical alteration in the structure of the hospital service; that the present problems are mainly “teething troubles ” in the development of a new service; and that they can be solved without transforming the whole structure of the service.  These witnesses have also pointed out that: —
    1. Local   authority   areas   in   general   are   wholly   irrelevant   to   the administrative needs of the hospital service.
    2. The local authority record of hospital management bears out the contention that local authority services are always uneven in standard. The present administrative structure has greatly im­proved and levelled up the general standard of hospital services throughout the country.
    3. Past experience suggests that a system of administration based on Joint Boards and constituent local authorities would be unlikely to work efficiently or smoothly, particularly in planning the develop­ment of a hospital service. In the past, Joint Boards themselves have been labelled “undemocratic”; lacking in financial responsibility; and too far removed from the influence of the rate-payers. They have also been criticised for separating the services entrusted to them from the rest of the main machinery of local government, (iv) In the interests of sound local government, local authorities should retain at least a 50 per cent, stake in the cost of any service pro­vided by them. In the case of the hospital service, this would involve an intolerable burden on the local rates which could not be contemplated at least without some radical reorganisation of local government finance.
    4. The difficulties arising out of the existing tripartite structure of the Service have been greatly exaggerated, and there is no reason to believe that they would be eliminated by handing over adminis­trative responsibility for two or more branches of the Service to the local health authorities.
    5. The professions would not welcome any proposal to transfer the hospital service to the local health authorities (cf. the following extract from Dr. Rowland Hill’s evidence before the Select Committee on Estimates(The Eleventh Report of House of Commons Select Committee on Estimates, H.M.S.O. 1951, page 28.):

    “The relationships between our profession in the past and local authorities in many parts of the country have not always been of the happiest, especially in the hospital world. Local authorities, of course, were very new owners of hospitals, and if it had not been for the war and the National Health Service our relations with local authorities, as the years went by, might have grown happier. It is true to say that the one thing the medical profession dreaded before 1948, and this applies to general prac­tice as well as to hospitals, was the dread that they would find themselves placed under the local authorities. That dread might have been ill-founded and in the passage of some generations might have been shown to be ill-founded, but on that date it is a fact that it was a deep fear.”

    124.  We have also noted that some local health authorities are themselves opposed to the proposed transfer, and that others would prefer to postpone any decision on this question until it is known to what extent local govern­ment is likely to be reformed in the foreseeable future, and how far their finances are likely to be reorganised.

    Our own view

    125.We do not feel that a convincing case has been made out for transferring the hospital service to the local health authorities.    It seems to us that the present tripartite structure of the National Health Service has much deeper roots than the Acts of 1946 and 1947.  It is in the main the outcome of the evolution of medical and social services in this country during the last hundred years; and we do not believe that radical changes in the struc­ture of the National Health Service would be the right way of seeking to solve the undeniable problems which arise from this division of functions. We think that these problems can and will be solved by less drastic measures if the Service is given a period of stability.   Habits of co-operation need time to grow and in so far as they are at present weak, we believe that the cause lies in the newness of the Service, rather than in any organisational weakness.

    1. Moreover, we do not believe that a closer integration of the services would necessarily be achieved simply by unifying the control under one administrative body.   Any administrative system has inherent in it the problem of securing a proper co-ordination of its various parts, and the transfer of statutory responsibility to a single authority will not in itself do much to solve the problem.

    2. As for the practicability of the proposal, we doubt very much whether the local authority machine would be able to carry the additional burden of the hospital service.    A great deal  still remains to, be done by the local authorities in the development of their home health and welfare services, and it seems to us that their energies might be expended more profitably in this direction than in attempting to take on the whole of hospital administration in addition.   Bearing in mind also that some local authorities them­ selves would be reluctant to accept responsibility for the hospital service; that the bulk of the medical profession would be opposed to the suggestion; and that the financial burden would be intolerable unless the Exchequer grant were so substantial that it would render local government responsibility merely illusory, we feel confident that, whatever the merits of the proposal, it is not a practical proposition at the present.

    3. With further reference to the financial burden, we have noted that the cost of the hospital service, if grant-aided to the extent of 50 per cent, by the Exchequer, would represent on average (on present assessments) an additional rate burden of about 8s. in the £ to the local health authorities in England and Wales.   The rate burden could of course be reduced by increasing substantially the rate of Exchequer grant, but we would see no purpose in transferring the service to the local authorities if by far the greater part of the cost were to be borne by the Exchequer.

    4. As we have noted above, it has been suggested by some of our witnesses that the question of responsibility for the hospital service should be reconsidered after local authority areas have been reformed and local authority finance reorganised.    We cannot believe however that any reform of local government in the foreseeable future is likely to go far enough to affect the issues we are now considering.    Some form of regional authority will always be required for the efficient planning of a national hospital service, and if the service were to be managed by the local authorities, Joint Boards (or some similar bodies) would be necessary to carry out this planning function.   The service would then be administered through the Health Departments, (By the “Health Departments” we mean the Ministry of Health and the Department of Health for Scotland.)  Joint Boards, local authorities,   and presumably hospital managing committees.   This administrative structure would not be calculated to improve the co-ordination of the service either at the national level or at the officer level “on the ground” ; and would simply create new problems in the relationship between Joint Boards and local authorities.

    Transfer of certain classes of Hospital to Local Health Authorities

    1. Perhaps we should mention at this point the suggestion made by some of our witnesses that all maternity, tuberculosis, chronic sick, and infectious diseases hospitals, and all mental deficiency institutions should be transferred at once to the local health authorities.  This suggestion was usually put forward as an interim measure pending the transfer of the whole hospital service to the local health authorities, but there were some who recommended its adoption, whatever the future administrative organisation might be, because it was felt that the unification of these services was neces­sary in the interests of efficiency and economy and also in the interests of the patient.

    2. Whilst appreciating the need for the closest possible link between the domiciliary and institutional aspects of the maternity, tuberculosis, chronic sick and the other services mentioned above, we do not favour the proposal to transfer the hospitals concerned to the local health authorities as it seems to us that the hospital service would hopelessly disrupted if responsibility for its provision were divided between Regional Hospital Boards and local health authorities.

    Proposed transfer of the work of Executive Councils to Local Health Authorities or to Regional Hospital Boards

    Transfer to Local Health Authorities

    132.    Our attention has been drawn to the Report of the Royal Commission on National Health Insurance (Cmd. 2596 ) published in 1926, which recommended that ” Insurance Committees should be abolished and that their work, very much in its present form, pending any remodelling and unification of the Health Services should  be handed  over  to  committees  of  the  appropriate  local authorities with possibly a co-opted element.” The Commission advanced two reasons for this recommendation : —

    (i) ” Unification of local effort on health services is a consideration that should, in our view, be paramount whatever the success of isolated pieces of machinery that now exist.

    (ii) The evidence we have heard convinced us that whatever may have been the position at the outset and whatever the aims of the framers of the Act, in real fact these committees have not now sufficiently extensive or sufficiently improved duties to justify their existence as independent administrative bodies. . . .   The duties are now of a routine character and could equally well be performed by the same officials working under the control of the local authority.”

    After reviewing the functions of Insurance Committees generally, the Royal Commission concluded that the most important duty of the Committees was to enquire into complaints arising from the  provision of medical benefit (including the supply of drugs) ; but the Commission saw no reason why such enquiries could not be made equally well by a Medical Services Sub- Committee appointed by the local authority.

    1. Some of our witnesses have maintained that this recommendation of the Royal Commission is as valid today as it was in 1926 in that the Executive Councils, which have succeeded the Insurance Committees, are still largely concerned with work of a routine nature which could equally well be carried out by the local health authorities; while the need still remains to integrate more closely the health work of the local authorities and the family practi­tioner services.

    2. These  witnesses  have  usually  agreed,  however,  that  some  special provision would have to be made to deal with the complaints brought against doctors, dentists, chemists and opticians, as it might be considered undesirable to have these professional matters debated by the local authorities themselves.    One of the suggestions put forward for meeting this difficulty was that these disciplinary cases should be decided by the appropriate Services Committee with a right of appeal direct to the Minister.

    3. The great majority of our witnesses, however, have maintained that the Executive Councils are now playing a much more important role in the National Health Service than the Insurance Committees ever did in the National Insurance scheme.    The Executive Councils have to deal with a  wider range of functions and with a greatly increased public demand for the family practitioner services. Their statutory duties may appear to be somewhat restricted, but the Councils are suitably placed to take a wide view of the medical services as a whole, and have served as a useful mouthpiece for general practitioners who have been able to feel that they retain a measure of self-government in the Service.

    136.  It is clear too that the great majority of the medical profession would be strongly opposed to any suggestion involving the transfer of administrative responsibility for the family practitioner services to the local health authorities.

    Transfer to the Regional Hospital Boards

    1. An alternative suggestion we have heard for integrating at least two of the branches of the National Health Service is that the work of Executive Councils should be transferred to the Regional Hospital Boards.   We have been told that one of the most unfortunate results of the National Health Service has been the widening of the gulf between the hospital and the general practitioner, and that the gulf might be bridged by making the Regional Boards responsible for the administration of the family practitioner services. The needs of general practice would then be fully considered regionally in the planning of the hospital and specialist services.

    2. Here  again,   however,  the great majority   of  our   witnesses  have opposed this suggestion mainly on the grounds that: —

    (a) The Regional Board areas are quite inappropriate for the efficient administration of the family practitioner services, which operate within relatively small geographical areas ;

    (b) The Boards themselves, being primarily planning and policy-making bodies, are not suitable for taking over the detailed work now carried out by Executive Councils ;

    (c) The general practitioners would not welcome Regional Board control any more than local authority control.

    Our own view

    1. We agree with the great volume of our evidence which has borne witness to the fact that the existing Executive Council machinery has worked well at reasonably low cost, is fully acceptable to the professions, and should be left broadly intact at this stage.  We agree that there is need for the closest possible co-operation between the family practitioner, local health authority and hospital services, in the interests of patients, the profession, and the Exchequer; but we do not believe that this co-operation would be achieved simply by making either of the organisational changes referred to above. The problem of co-operation has been tackled more effectively in some areas than in others and as we have already said, where integration is lacking the reasons  are  probably  to be found more in the personalities concerned than in any defects of organisation.    Moreover, so long as the general practitioners are paid under a contract for services, we cannot see any major savings being achieved by changes in organisation.

    2. We endorse, therefore, the view of the Cohen Committee on General Practice which says: —

    “The Committee favours the retention of the present method of administering the provision of general medical services through Execu­tive Councils and Local Medical Committees. Five years’ experience has revealed no fundamental defect and testifies that the present administrative structure represents a successful evolution from the system of administration which was used in the National Health Insurance Scheme before 1948.”(Central Health Services Council.—Report of the Committee on General Practice within the National Health Service. (H.M.S.O., 1954), para. 28.)   –

    141.  In later sections of the Report, we deal more fully with the organisation    of    Executive  Councils  (paras.  428-443);  the  vitally    important relationship of the general practitioner to the local health authority and hospital services (paras.  504-508, and 616-619);  the general question of co-operation between the three branches of the National Health Service and with the welfare services provided by local authorities under Part III of the National Assistance Act (see Parts V and VII of the Report); and the future role of preventive medicine in the National Health Service (paras. 615-622).

    The case for a National Board or Corporation

    1. The question was raised by one or two of our witnesses whether a Government Department was an appropriate body to administer a National Health   Service,   and whether  a  National   Board or specially  constituted Corporation would direct the Service (and particularly the hospital service) more efficiently and more economically.

    2. We are satisfied, however, that a Service which costs the Exchequer more than £400 million per year must be accountable, through a responsible Minister, to Parliament.   There is no proper analogy with the nationalised industries which are revenue earning.   We have taken note of the comments expressed on this matter in the White Paper of 1944 on ” A National Health Service “.( Cmd. 6502 (H.M.S.O., 1944), page 13.)

    “The exact relation of this proposed body [i.e., the specially constituted corporation] to its Minister has never been defined, and it is here that the crux lies. If, in matters both of principle and detail, decision normally rested in the last resort with the Minister, the body would in effect be a new department of Government … If, on the other hand, certain decisions were removed from the jurisdiction of the Minister (and consequently from direct Parliamentary control) there would be need to define with the utmost precision what these decisions were. Clearly they could not include major questions of finance. Nor could any local government authorities responsible for local planning or ad­ministration reasonably be asked to submit to being over-ruled by a body not answerable to Parliament.”

    144.  As we see it, the great merit of a National Board, so far as the hospital service is concerned, would be to make possible the interchange of staff between the central body and the authorities at other levels of hospital administration.   Some of the difficulties of the present system of administration arise from the fact that the Health Departments are manned by officers of a different service from that administering hospitals at the regional and group levels.

    We do not believe, however, that this advantage would justify the appoint­ment of a new Board or Corporation whose constitution alone would pose a host of difficult problems. Nor do we believe that the appointment of a National Board would in itself improve the integration of the health services.

    145.  As for the local health services provided under Part III of the Acts of 1946 and 1947, we have already made clear our view that these services should continue to be administered by the local health authorities. Moreover, we agree entirely with the view expressed in the Government White Paper, quoted above. That such authorities could not be made responsible to a National   Board   or   Corporation   for   the   administration   of   their   health services.

    146.  We conclude therefore that the Minister of Health and the Secretary of State for Scotland should continue to remain directly responsible to Parliament for the administration of the Health Service.


    1. We believe that the structure of the National Health Service laid down in the Acts of 1946 and 1947 was framed broadly on sound lines, having regard to the historical pattern of the medical and social services of this country. It is very true that it suffers from many defects as a result of the division of functions between different authorities, and that there is a lack of co-ordination between the different parts of the Service. But the framers of the Acts of 1946 and 1947 had not the advantage of a clean slate; they had to take account of the basic realities of the situation as it had evolved.    It is also true that even now, after only seven years of operation, the Service works much better in practice than it looks on paper. That it should be possible to say this is a remarkable tribute to the sense of responsibility and devoted efforts of the vast majority of all those engaged in the Service, and also to their determination to make the system work.

    2. We are strongly of opinion that it would be altogether premature at the present time to propose any fundamental change in the structure of the National Health Service. It is still a very young service and it is only beginning to grapple with the deeper and wider problems which confront it. We repeat what we said earlier—that what is most needed at the present time is the prospect of a period of stability over the next few years, in order that all the various authorities and representative bodies can think and plan ahead with the knowledge that they will be building on firm foundations.

    3. The present National Health Service is both too recent in origin and also bears too much the imprint of the historical circumstances from which it sprang, for any one to be able to do more than make a guess at the lines along which it may be expected to evolve. Those who have spent the greater part of their working lives under quite different conditions—for example consultants serving voluntary hospitals in an honorary capacity;  Medical Officers of Health;  members of local  authorities in charge of municipal
      hospitals—these and many others have not always found it easy to adapt themselves to the new order of things.  Some of the strains and stresses of the National Health Service are attributable to the difficulty experienced by many, who had grown up under the old system, when called upon to operate a service administered on different lines.  Longer experience of the working of the Service and the gradual emergence of a new generation may make comparatively simple many things which now appear difficult or impracticable.

    4. What is essential is the recognition that the hospitals, the general practitioners and the local authorities have each an indispensable task to fulfil in their respective spheres.    They are however each severally only a part of a single National Health Service ; and the efficiency of the Service depends not merely on the quality and quantity of the work that each of these branches performs within its own sphere, but on the degree to which they co-operate with one another to accomplish the ends for which the Service
      as a whole exists.

    151.We conclude therefore that no sufficiently strong case has been made out for transferring either the hospital service or the Executive Council services to the local health authorities, nor for transferring the executive Council services to the Regional Hospital Boards.

    In our view, a more important cleavage than the division of the National Health Service into three parts is that between the hospital service and the services provided by the local authorities under Part III of the National Assistance Act, and” we come back to this point in Part V of our Report when dealing with the services relating to the care of the aged.

    1. Having reached this general conclusion, we now go on to examine in detail the hospital, family practitioner and local health authority services in turn. For each of these services, we shall describe: —
    1. the public services which existed before the inception of the National Health Service;
    2. the services provided under the National Health Service Acts;
    3. the main suggestions made to us in evidence for improving the efficiency and economy of the Service ; and
    4. our considered views on those suggestions.

    While this may seem at first glance to be a rather lengthy form of presen­tation, we feel that it will serve a useful purpose to have this material summarised and placed on record in our Report.



    Brief History Pre-1948 England and Wales

    153.  Before the introduction of the National Health Service in 1948, there were two distinct systems of public hospital provision in this country—the voluntary hospital and the municipal hospital—each with its own separate origins and  traditions. In fact, on  the  Appointed Day, 1,143  voluntary hospitals with some 90,000 beds were taken over by the National Health Service in England and Wales, and 1,545 municipal hospitals with about 390,000 beds.    Of this latter number some 190,000 beds were occupied by patients in mental and mental deficiency hospitals, and there were nearly 66,000 beds still administered under the Poor Law.    In Scotland 191 volun­tary hospitals with about 27,000 beds were taken over and 226 municipal hospitals with some 37,000 beds.

    Voluntary Hospitals

    154.  The voluntary hospitals varied enormously in size and function, ranging from the well equipped large general hospital (with distinguished specialists and consultants available) to the small cottage hospital served in the main by local general practitioners.    A few of the voluntary hospitals could trace their origin back to mediaeval ecclesiastical foundations, but the great majority had come into existence since the middle of the 18th century.

    Each hospital had its own governing body which usually delegated its management functions to a Chairman, House Governor (or other officers) acting in conjunction with an Executive or House Committee. The medical care of the patient was entrusted to the visiting physicians and surgeons, etc., who jointly comprised the medical staff and acted in an advisory capacity to the governing body. Each governing body had planned its own service for the public as it thought best, subject to the conditions laid down by its constitution. Income was of course derived from voluntary subscriptions, donations or endowments, and payments by patients.

    Municipal Hospitals

    1. The municipal hospital service had developed from a wide variety of sources.    There were the hospitals and institutions administered under the Poor Law, and the general hospitals maintained by local health authorities since 1930 under their public health powers.   These together represented a very wide service, at every stage of development from the chronic sick wards of the Poor Law Institution to the fully equipped hospital with highly skilled staff.   There were, too, the infectious diseases and isolation hospitals, tuberculosis sanatoria, mental hospitals and mental deficiency institutions, many of which were provided through Joint Boards or Joint Committees of the responsible authorities.

    At the beginning of 1948, the authorities responsible for providing the municipal hospitals were generally the councils of counties and county boroughs—with the exception of the infectious diseases hospitals which were normally administered by the councils of county boroughs, boroughs, urban districts and rural districts in accordance with schemes drawn up by the county councils. The services were financed from the local rates with some indirect Exchequer assistance through the operation of the block grant to local authorities under the Local Government Act, 1929.

    The local authority hospitals were administered through the department of the Medical Officer of Health whose representative at each hospital was a medical superintendent directly responsible to him for the whole adminis­tration of the hospital (excluding such matters as finance, building and stores, in which the clerk, steward or engineer of the hospital might be responsible to the local authority’s treasurer, clerk, stores purchasing department, or engineer). During the 1930’s however there was a tendency to give a measure of direct responsibility to the clerk or steward (and to the matron) for then-respective duties, and to give these officers direct access to their opposite numbers at the Town or County Hall.


    1. Local authorities were required to charge patients what they could reasonably afford towards the cost of treatment and accommodation provided (except in the infectious diseases hospitals where the authority had a discretion), and the voluntary hospitals usually followed the same practice. Many people made provision for this liability by joining one of the hospital contributory schemes, which undertook to meet the cost of hospital treatment, etc., in return for a weekly subscription. The total membership of these schemes was about seven million without reckoning dependents; and the voluntary hospitals shortly before the war were deriving from them about one half of their total receipts.


    1. In broad outline the development of the hospital services in Scotland was similar to that in England and Wales, but in 1948 the voluntary hospitals in Scotland were providing much the bigger part of the institutional service for the treatment of acute medical and surgical conditions. Only at a fairly late period did the local authorities enter the general hospital field, and at the Appointed Day there were less than a dozen local authority general hospitals, practically all of them in the four cities.  The tradition of the Scottish voluntary hospitals was to afford free treatment. There had been little development of the pay bed system and it was not customary in Scotland to ask the patient in ordinary wards to make a payment towards the cost of his treatment.

    Emergency Hospital Scheme

    158.  This very brief note on the historical background would not be complete without a reference to the war-time Emergency Hospital Scheme which had a considerable  effect on the  development  of the country’s  hospital services.   This Emergency Service was responsible for adding in England, Wales, and Scotland about 65,000 hospital beds, by the erection of new and the extension of existing buildings; also for upgrading many of the surgical and other facilities at hospitals ; developing specialised treatment centres; and providing recovery and convalescent homes.   Here was the beginning of an organisation which sought to plan the hospital service as an integrated whole and to transform the patchwork of individual hospitals into a coherent regional scheme.

    A National Hospital Service.

    1. The experience of the Emergency Hospital Service, the results of a survey of the hospitals of the country carried out with the help of the Nuffield Trust, and the influence of the Beveridge Report of 1942, all combined to demonstrate the need and inspire the preparation of plans for the reorganisation of the nation’s hospital service.  These plans were brought to fruition in the Acts of 1946 and 1947 which transferred most of the hospitals in the country and their staffs, to the Minister of Health and the Secretary of State for Scotland.   Less than 300 hospitals, mostly quite small, were dis­claimed and remained under private management.

    Hospital Services provided under the National Health Service in England and Wales

    1. The National Health Service Act of 1946 charges the Minister with the duty of providing, throughout England and Wales, hospital and specialist services “to such extent as he considers necessary to meet all reasonable requirements “.

    Under the service, in-patient and put-patient treatment of all kinds is provided, together with consultant advice in the patient’s home where necessary. The hospital accommodation provided by the service includes general and special hospitals; maternity accommodation; sanatoria; infectious diseases units ; chronic sick hospitals; mental hospitals and mental deficiency institutions; out-patient clinics ; and convalescent homes.

    1. All hospital property, whether land and buildings or equipment, is vested in and belongs to the Minister.   There are in all some 3,200 hospitals (with about 477,000 available beds) and clinics, etc., in the service and a staff of over 320,000 employed whole-time and 70,000 part-time.    Further services are provided by contractual arrangement with a number of institutions which remain privately owned.

    2. In addition to the provision of drugs when prescribed, various kinds of appliances (e.g., surgical boots, artificial limbs and wheeled chairs) are provided for patients through the hospital service where necessary.

    3. Normally patients are referred for hospital treatment by their family doctors, and they may use the hospital service whether they are being treated by their family doctors privately or under the National Health Ser­vice.    If they are too ill to visit hospital (either by public transport or by ambulance) the family doctor can arrange for a consultant to visit the patient at home.

    Where patients use public transport to and from hospital, the travelling expenses may be refunded in cases of hardship, after an assessment of the patient’s means by the National Assistance Board.

    164.  The great majority of patients are accommodated in general wards, but in many hospitals there are a number of “amenity beds” in single rooms or small wards where patients who desire privacy which is not considered necessary on medical grounds may be accommodated for a charge of 6s. or 12s. per day depending on the size of the room.   In all other respects, such patients are treated in the same way as patients in general wards, and no charge is made for treatment or normal maintenance.

    At some hospitals, a number of “pay beds” are also set aside for the use of patients who prefer to make private arrangements to be treated by a con­sultant of their own choice. The patient using one of these beds is required to pay the full cost of maintaining it in addition to the fees of the consultant providing the treatment. In most instances there is a maximum limit to the fees that a consultant may charge to patients occupying pay beds.

    Of the 477,000 beds provided in the service in England and Wales, only about 6,000 are set aside for use as amenity beds and approximately the same number for use as private pay beds. (See also paragraphs 416-424 below).


    165.  Apart from the amenity bed and pay bed accommodation already men­tioned, the hospital and specialist services are generally available free of charge to patients under the National Health Service.  Charges may, however, be made   for: —

    1. The supply of appliances of an unduly  expensive  type  or their replacement or repair ; or the replacement or repair of any appliance previously supplied which is damaged owing to carelessness.
    2. The supply or replacement of dentures and glasses to out-patients where the examination or sight testing took place on or after 21st May, 1951.
    3. The supply of drugs and medicines to out-patients on or after the 1st June, 1952; and the supply, repair or replacement of certain appliances to out-patients ordered or prescribed on or after 1st June, 1952.
    4. Private out-patient treatment.
    5. Recoveries under the Road Traffic Acts from car users and insurance companies of payments which they are required to make where hos­pital treatment is required following a road accident.
    6. Certain miscellaneous items.   (See Appendix 4).

    The charges referred to in (b) and (c) above were introduced by the Acts of 1951 and 1952 and were part of the measures designed to keep the net cost of the Health Service within £400 million per year; in the main they were a corollary to the introduction of similar charges for the general practitioner services. Further information about the hospital charges (showing the people who are exempt, and the income yielded by the charges in England and Wales in 1953-54) is given in Appendix 4.

    How the Hospital and Specialist Services are provided in England and Wales Non-Teaching Hospitals

    166.  In the case of the non-teaching hospitals, the services in England and Wales are provided through the agency of 14 Regional Hospital Boards and 388 Hospital Management Committees.

    Regional Hospital Boards

    1. Each Regional Hospital Board is responsible for a Hospital Region whose boundaries were designed to ensure that the Board’s services could be linked with a University and its associated medical school or schools. There is one teaching hospital in each of the ten Hospital Regions in the provinces, and 26 teaching hospitals (12 undergraduate and 14 post-graduate) in the areas of the four Metropolitan Hospital Regions. The Regional Boards have no control, financial or other, over the teaching hospitals in their areas, though they have the right to nominate a certain number of members to the Boards of Governors of teaching hospitals. The populations served by the Regional Boards range from 4 1/2 million to 1 1/2 million (approx.). (In Appendix 6 we show the areas of the Hospital Regions in England and Wales and, in Appendix 6A, the estimated population, the number of Hospital Management Committees, the number of hospitals and clinics, and the number of beds in each Region.)

    The Minister is responsible for appointing the Chairman of each Regional Board and such other members as he thinks fit after consulting the asso­ciated University, organisations representative of the medical profession, the local health authorities in the Board’s area, and such other organisations as appear to the Minister to be concerned. (See Part I of the Third Schedule to the 1946 Act). The numbers of members serving on Regional Hospital Boards range from 21 to 31.

    Functions of the Regional Hospital Boards

    168.  Under the general guidance of the Ministry, and in collaboration with the Boards of Governors of teaching hospitals, the Regional Boards are responsible for planning and co-ordinating the development of the hospital and specialist services in their Regions and for generally supervising) the administration of  the   services   (particularly   in   relation   to   expenditure). Because of their planning responsibilities, the Regional Boards are also entrusted with the duty of drawing up and carrying out (with the Minister’s approval) programmes of capital works for all the non-teaching hospitals in their Regions.  They also have responsibility for: —•

    1.  appointing the Chairmen  and members of Hospital Management Committees ;
    2. appointing and paying the senior medical and dental staff at non-teaching hospitals; and, since the end of 1952, approving any increases in Hospital Management Committees’ staffing establish­ments within certain broad categories ;
    3.  allocating the Region’s maintenance moneys to Hospital Management Committees and approving Hospital Management Committees’ estimates of expenditure;
    4. making contractual arrangements with institutions outside the service for the provision of additional beds ; and
    5. running the blood transfusion and mass-radiography services.

    Functions of the Hospital Management Committees

    169.  Under the general guidance of the Regional Hospital Boards, the day-to-day running of the hospitals is entrusted to Hospital Management Committees appointed by the Regional Hospital Boards. At present there are 388 Management Committees, each responsible for the administration of a group of hospitals or a single hospital (usually a large one such as a mental hospital or mental deficiency institution) in accordance with regional schemes approved by the Minister. The Management Committees appoint and pay all the staff employed at their hospitals (except the senior medical and dental staff who, as already indicated, are appointed by the Regional Boards), but in recent years have required the Regional Boards’ approval to increases in establishments within certain broad categories.

    The Chairman of a Hospital Management Committee is appointed by the Regional Hospital Board who also appoint such other members as the Board think fit after consulting with the local health authorities and Executive Councils in the Board’s area, the senior medical and dental staff employed by the hospitals in the Hospital Management Committee Group, and such other organisations as appear to the Board to be concerned (see Part II of the Third Schedule to the 1946 Act). The number of members serving on Management Committees ranges from 9 to 28. It is the practise of most Hospital Management Committees to appoint House Committees for each hospital (or a number of hospitals) within the hospital group.

    Functions of the Boards of Governors

    170.  In the case of the teaching hospitals (i.e., those hospitals which, in addition to providing hospital services for patients, also provide clinical facilities for the undergraduate or post-graduate training of medical and dental students) the hospital and specialist services are provided through the agency of 36 Boards of Governors who are directly responsible to the Minister for the management and control of the teaching hospitals in the country.

    In general, therefore, the Boards of Governors combine the functions of a Regional Board and a Management Committee. They carry out their own capital works and expend their maintenance moneys in accordance with estimates approved by the Ministry, and are responsible for appointing their own staff. In recent years, the Boards have required the Ministry’s prior approval to the appointment of additional staff within certain categories.

    The Minister appoints the Chairman of each Board and such number of other members as he thinks fit. A certain proportion of the members are nominated by the University with which the hospital is associated, by the Regional Hospital Board, and by the medical and dental teaching staff of the hospital; the remainder being appointed by the Minister after con­sultation with such local health authorities and other organisations as appear to the Minister to be concerned (see Part III of the Third Schedule to the 1946 Act). The number of members serving on a Board of Governors, at present varies from 16 to 30.

    Voluntary service of members

    171.  All the members of Boards of Governors, Regional Hospital Boards and Hospital Management Committees give their services in a voluntary capacity and receive payment only for loss of earnings and additional expenses incurred in attending meetings etc., and for their travelling and subsistence expenses.

    The Ministry’s role

    172.  We have been told that, since the introduction of the Service, it has been the Ministry’s aim to allow Boards and Committees a wide measure of autonomy in the administration of hospitals, subject always to the Minister’s overall responsibility to Parliament. The Minister issues memoranda of guidance to Hospital Boards and Management Committees; and officers of the Ministry regularly meet the Chairmen and senior officers of Regional Boards and the senior officers of Boards of Governors for discussions on matters of general interest.

    Other Hospital functions

    173.  Certain functions relating to the hospital service remain outside the financial responsibility of the hospital authorities.    The more important of these are:—•

    (i) Acquisition of land and buildings. The power to acquire land and buildings is reserved to the Minister, though proposals usually originate with the hospital authorities concerned.

    (ii) War Pensioner Hospitals and various related services. The Ministry are responsible for the direct administration of the hospitals which were formerly administered by the Ministry of Pensions; also for the provision of artificial limbs etc., supply and upkeep of invalid tricycles (formerly provided by the Ministry of Pensions on an agency basis for National Health Service patients).

    (iii) Public health laboratory service. This service, which is distinct from the pathological laboratories in hospitals, is provided by the Medical Research Council on an agency basis. It is intended to assist in the diagnosis, control and prevention of infectious disease. Its work includes the bacteriological examination of specimens in laboratories established throughout the country and is carried out in close co-operation with Medical Officers of Health.

    (iv) Area nurse training committees. Under the Nurses Act, 1949, responsibility for nurse training arrangements is now vested in com­mittees answerable to the General Nursing Council. There is one Committee for each regional hospital area with financial responsi­bility for tutorial expenses.

    (v) State Institutions. Broadmoor Institution and the Rampton and Moss Side Hospitals for Mental Defectives with dangerous or violent propensities are administered directly for the Minister by the Board of Control.

    How the Hospital and Specialist Services are provided in Scotland

    174.  There are five Regional Hospital Boards in Scotland serving popula­tions varying from 2,800,000 in the Western Region to 190,000 in the Northern Region; in four of the Regions there is a university medical school, the fifth Region being based for geographical reasons on Inverness.  At the commencement of our hearings the membership of Regional Boards varied from 30 in the Western Region to 17 in the Northern Region, but by April, 1955, when a three-year programme of reduction in the size of the Boards had been carried out, membership varied from 24 in the Western Region to 15 in the Northern, North-Eastern and Eastern Regions.

    There are at present 84 Boards of Management, the number of hospitals under the control of individual Boards ranging from one to seventeen. The Boards administer some 400 separate hospitals and institutions, with about 64,000 available beds and a staff of approximately 45,000 employed whole-time and 9,000 part-time. The members of Boards of Management are appointed by the Regional Hospital Boards in the same way as the members of Hospital Management Committees in England and Wales; Chairmen of Boards of Management are however elected by the members themselves from their own number.

    There are in Scotland no separate Boards of Governors for the teaching hospitals, teaching hospitals being administered by Regional Hospital Boards through Boards of Management in the same way as other hospitals. To advise Regional Hospital Boards on the administration of the hospital and specialist services in their areas, so far as they relate to facilities for teaching and research, the Scottish Act of 1947 provides for the constitution of Medical Education Committees. There are no corresponding bodies in England and Wales. The members of the Committees (who elect their Chairman from among their own membership) are appointed partly by the associated Univer­sity, partly by the Regional Hospital Board and partly by the Secretary of State.

    1. Apart from the significant difference in the Scottish method of adminis­tration of the teaching hospitals the general organisation of the hospital and specialist services is substantially the same in Scotland as in England and Wales. The Regional Hospital Boards in Scotland have, however, a some­what different role from the Regional Hospital Boards in England. They act as agents of the Secretary of State in the provision of hospital and specialist services; they also act as principals in relation to Boards of Management, who are responsible to them generally for the management of the hospitals. Broadly the functions of the Regional Boards may be looked upon as serving two main purposes—the manipulation of resources (hospital facilities, specialists, highly specialised equipment and certain auxiliary ser­vices) that need to be deployed on a regional basis; and the control of expenditure generally.

    There is no separate Public Health Laboratory Service in Scotland, labora­tory services being provided by the Regional Hospital Boards as part of the hospital and specialist services. Blood transfusion services are provided by the Scottish National Blood Transfusion Association, a voluntary body working in association with the Regional Hospital Boards through a series of Regional Committees; practically the whole of the Association’s expendi­ture is met by advances from the Exchequer.


    Control of establishments in England and Wales

    1. Preceding paragraphs of the Report have described how responsibility for the appointment of hospital staff in England and Wales is shared between Hospital Boards, Boards of Governors and Hospital Management  Com­mittees.    The staff themselves are not employed directly by the Ministry and are not therefore civil servants. Their rates of pay and terms and conditions of service are settled by negotiation between the Management and Staff Sides of the appropriate Whitley Councils, and hospital authorities may not depart from these agreed rates without the authority of the Minister.    Table. 14 in Part I of our Report shows the growth in the number of staff employed in the hospital service in England and Wales since the Appointed Day.

    2. The expenditure of hospital authorities on salaries and wages accounts for more than 60 per cent, of the total cost of the hospital service.    In the latter part of 1950 therefore the Ministry decided, as one of a number of measures designed to secure economies in the service, to carry out a review of hospital staffs with the object of fixing establishments in four main cate­gories—namely medical and dental, nursing, administrative and clerical, and domestic and catering staff. The review was conducted by small teams of experts who visited hospital authorities and submitted recommendations to the Minister to enable him to determine the appropriate establishments for each authority.

    A very thorough review of administrative and clerical staff has now been completed, and the establishments which have been approved as a result of its recommendations show a reduction of approximately 3 per cent, in the previous establishments, i.e., in relation to the services as they existed when the review was carried out. In addition, a substantial number of staff have been regraded by agreement with the authorities concerned, following the recommendations of the review teams. This does not suggest that there was any large inflation of clerical and administrative staffs at that time. Any increases in the approved establishments now require the prior authority of the Regional Hospital Board in the case of Hospital Management Committees, and by the Ministry in the case of Regional Hospital Boards and Boards of Governors.

    In the case of staffs other than administrative and clerical, it soon became apparent that a detailed review of each hospital staffing arrangement would take a very long time indeed if it were to be carried out only by teams sent out from the central department. It was decided therefore that the task of reviewing the staffs of Hospital Management Committees should be entrusted to Regional Boards) and that direct reviews by central investigating teams should be restricted to the staffs of Regional Boards and Boards of Governors themselves.

    178.  Before making any increase in the establishments of staff (other than administrative  and clerical)  as they  existed  at  5th  December,   1952,  all hospital  authorities  are now required to seek the prior authority of the Ministry (in the case of Regional Boards and Boards of Governors) and of the Regional Boards (in the case of Hospital Management Committees). For the purpose of these controls, the staffs concerned are grouped into four
    broad categories: —

    1. medical and dental staff of the grades of consultant, senior hospital medical officer, senior hospital dental officer, senior registrar and registrar (i.e., the senior medical and dental staff for whose appoint­ment Regional Hospital Boards and Boards of Governors are responsible);
    2. other medical and dental staff (i.e., for whose appointment Hospital Management Committees and Boards of Governors are responsible);
    3. nursing and midwifery staff ;
    4. all other staff (i.e., other professional and technical staff, domestic staff, maintenance staff, etc.).
    1. In December, 1952, hospital authorities were also asked to review their establishments to effect any possible reductions within these categories generally; and to counter-balance any necessary increases in staff by effect­ing reductions elsewhere. In particular, in the case of staff employed in category (d) above, the Ministry suggested that hospital authorities should aim at a reduction of 5 per cent, in the numbers employed by October, 1953, where this could be effected without detriment to the service provided for patients.

    2. One of the results of the staffing controls is that Regional Hospital Boards and Boards of Governors cannot now make any additional consultant appointments without first obtaining the approval of the Ministry.

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