The National Health Service - an antiquated system of healthcare

Table of Contents

1.  Introduction  1

2.  The British System of Health Care  

2.1  Health care as part of the welfare state  2

2.2  Funding and Expenditure  2

2.3  Structure  3

3.  The National Health Service (NHS) in an existential crisis  

3.1  Social change  5

3.2  Antiquated funding and structure  6

4.  Reforms and perspectives for the future  8

5.  Bibliography  11

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1. Introduction

At the turn of the 21 ^st century the British system of health care is to be found in serious difficulties. Expenditure constantly grows and the medical services are not able to meet the needs of the population. Patients have to set their names on waiting lists for hospital treatments, staff is underpaid and the top-down structure of the system antiquated and inefficient. In fact, we are facing three major problems: Funding, social change and structure. Funding is almost entirely based on a tax model, combined with a certain demographic model. However during the past fifty years the population has changed, which led to a budget deficit and a dramatically worsening of the services. If there has been a high unemployment, the governmental tax income decreased. On the one hand, life expectancy increases and therefore the demand for medical support. On the other hand, the state is confronted with a declining birth-rate. Children represent the next generation of taxpayers and so the governmental tax income will decrease and the gap between financial resources and expenditure enlarges. The NHS was once founded after the Second World War as an institution of social security and justice to provide free health care for all. In former times, concerning medical supply, people were dependent on themselves, respectively on their financial status. The new model promised to be an advancement. Now the NHS is about to regress. Today, costs for certain medical services are transferred from state to citizens. The system is antiquated, a more flexible model is needed here, which resists major social changes and financial fluctuations. This implies a completely different model of funding and a structural modernisation. A general private insurance is only one alternative. An other opportunity would be the privatisation of the administrative and clinical sector.

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2. The British System of Health Care

2.1 Health Care as part of the welfare state

The National Health Service (NHS) was founded in 1948, in order to provide British citizens social security after they had suffered during the Second World War. ¹ The innovated services promised social support and were therefore highly welcomed:

Its priority objective, as part of the newly created welfare state, was to offer primary and free health care for the entire population, independent of their financial situation, profession, sex, age or social class. ³ Unfortunately the government forgot, that market orientation also applied to a social service. Nevertheless the system is very popular among the British, but funding was and still is a controversial issue.

2.2 Funding and Expenditure

The British health service is mainly funded on taxation and NHS contributions.

1 Rudney Lowe, “Healthcare”, in: Ders. (Hrg.), The Welfare State in Britain since

1945, Houndmills/Basingstoke ³ 2005, 175-203, 182.

2 Rudney Lowe: “Healthcare”, 2005, 175.

3 www.britischebotschaft.de/pdf/NHS_ger/pdf - The British Health System, 2004,

1 (23.09.2005).

4 Department of Health: Departmental Report 2004: Chapter 3 Expenditure, 6, http://www.dh.gov.uk/assetRoot/04/08/09/44/04080944.pdf (letzter Besuch am 23.09.2005).

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The remainder comes from charges and receipts. 5

On the one hand, during the last thirty years taxation as financial source decreased, while contributions from insurance and charges increased. In 1974-75, i.e., general taxes added up to 91,3% and National Insurance to 5,7%. ⁷ On the other hand, expenditure constantly rises. In 1996-97 the NHS spend £42bn on health care in the UK and £68bn in 2002-03. ⁸ The Public Spending of the Department of Health splits up into “consumption of resources” and “capital spending”, this means expenditure and investments in the NHS and personal social services. ⁹ The revenue and capital of the NHS will be reinvested in the PCTs, hospital and family and social services, as well as NHS pensions. ¹⁰ The Department of Health (DH) regulates expenditure within the Departmental Expenditure Limit (DEL), but “from 2003-04 onwards” […] this limit “[…] has been increased by a switch from the Exchequers Annually Managed Expenditure (AME) spending to cover the increased cost of pensions. ¹¹ An addition of over £1.6bn has been made to the NHS DEL to cover these costs from 2003-04 onwards. “ 12

5 Department of Health: Departmental Report 2004, 6.

6 Pete Alcock, , „Health“, in: Ders. (Ed.), Social Policy in Britain, Houndmills/ Basingstoke ² 2003, 69.

7 Rudney Lowe, “Healthcare”, 2005, 193.

8 Pete Alcock, , „Health“, 2003, 68.

9 Department of Health: Departmental Report 2004: Chapter 3, 2.

10 Ibid., 2, 5.

11 Department of Health: Departmental Report 2004: Chapter 3, 2.

12 Ibid.

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