In preparation for the 1983 election campaign, Margaret Thatcher, then first-term Prime Minister, famously announced during the Conservative Party’s annual convention that “the NHS is safe in our hands.” This was a successful attempt at dispelling the impression that the NHS was at risk of privatization under another Conservative government, enabling a landslide victory next year. Despite this promise, the following Conservative governments witnessed perpetual underfunding, market deregulation and radical reforms that stopped only short of outright privatization. This article considers the 1989 White Paper “Working for Patients” as a pivotal point for the NHS and a guiding document for Conservatives’ zealous endeavors of reform. We also look at how this document reflects the Conservative’s general way of approaching public institution reform under Thatcher’s influence, and its decades-long impact on the NHS.
“Working for Patients”: The Framing of Policies vs. Reality
The White Paper, coupled with another called “Caring for People”, was produced in 1989 after Thatcher ordered a review of the NHS. The White Papers envisioned several major reforms for the NHS to maximize per dollar value of its spending and increase efficiency. All of the recommendations did become law through the National Health Service and Community Care Act of 1990, in the last year of Thatcher’s Premiership.
The guiding philosophy of the white paper is that regardless of funding through public funds or not, competition is good, and bureaucracy is bad. The government also wished to localize healthcare budgeting and decision making by shrinking higher level administration to improve budget efficiency.
The white paper recommended that an “internal market” be established, where Health Authorities would set up their budgets according to local needs, and purchase service from hospitals or private providers. This effectively corporatized internal components of the NHS, which were under a universal budget and general management, and gave them room to compete against one another. GP, or private General Practitioners, would also gain an unprecedented level of access through the internal market, benefiting directly from purchasers with taxpayer funding. All parties were then subjected to more regular statutory audit.
The framing of these reforms did not mention budgeting concerns or signal HM Government’s intent to cut spending. It focused on its main pitch and Conservatives’ favorite talking points when confronted with overwhelming public support for a public organization like the NHS: consumer/patient choice and quality of service. In the foreword to “Working for Patients”, Thatcher states, “we aim to extend patient choice, to delegate responsibility to where the services are provided and to secure the best value for money. All the proposals in this white paper put the needs of patients first.”
The past actions and spending patterns of the Thatcher government paint an entirely different picture, indicating that the statement is disingenuous. The government, since the election of 1983, had already been imposing strict caps on public sector spending on health at 0.5% per year for a decade, slashing the management at the NHS and encourage the development of private medicine in tandem with public hospitals and care facilities. As a matter of fact, the upward pressures of demographic changes and the cost of technology reached 7.7% from 1978-79 to 1984-85, and spending on publicly owned hospitals and community care only grew 5.7% over the same period, effectively rendering a 2% budget cut to public health services available to all and not just those with a stake in private GP trusts or a private healthcare plan.
To produce any meaningful competition between public entities, the supply side (hospitals) needs potential excess capacity to outrun the demand (Health Authorities and patients), thus eliminate those that are inefficient. Given the massive waiting lists and limited hospital beds by the time Tony Blair was elected in 1997, the Conservative government never truly enabled what they claimed to have tried to achieve. Hence, it is safe to say the plan was always to reduce NHS spending by letting private sector encroach its territory, as independent services prospered throughout the same period, costing 10.7% of the NHS’s expenditure by 1985, as opposed to 7.3% in 1978.
Neoliberalism vs. Public Opinion
The rather sneaky way of market reform for the healthcare industry in unsurprisingly in line with the stances of the Thatcher government and the political climate of their days. The Margaret Thatcher brand of Conservative platform was distinctly neoliberal and monetarist. Their ultimate goal was to perpetuate self-help and reduce individual dependency on state assistance. They believed that the market was constrained by a ubiquitous public sector, and that market supply will only go up if spending and taxes are cut and nationalized industries are privatized. The ideology hit a wall in 1979, when the Conservatives were up against insurmountable public opposition to demolishing or undermining the NHS through a private system like the one in the US and chose to take privatization out from the Conservative platform. A combined analysis of more than 20 national polls taken from 1983 to 1989 shows 88% of the British public oppose privatization of the NHS of any kind, in stark contrast to 59% for public water authorities, 56% electricity industry and 43% for air traffic facilities.
The Conservatives had to make a dramatic U-turn, but this was not the end to the story of healthcare reform under the Conservatives. They take two paths to reduce spending and liberalize the market. The first path is privatizing integrated peripheral services without privatizing core functions of the NHS. Privatization of catering, cleaning and laundry work with the NHS is a prime example of selling the NHS part by part. The second path is moderating their message on market-style reforms to emphasize consumer/patient choice while promising to guarantee access for all. “Working for Patients” and subsequent legislations did just that. The white paper states, “…The National Health Service will continue to be available to all regardless of income, and to be financed mainly out of general taxation.”
While that is technically true, the ostensibly stagnant level of funding for hospitals and capital investments put poorer people at a disadvantage when compared to the 14% middle and upper class, who can afford to enjoy private medicine through private insurance. Local budgeting also meant constant rationing due to demographic mobility, leading to the resources being never enough to cater to all medical needs in a designated area. Waiting lists were also at a record long under the Conservatives, effectively creating a two-tier system where the poorer you are, the more you suffer.
The aloofness and detachment from the working class is most sharply exhibited when Margaret Thatcher was asked about why she opted for private insurance rather than using the NHS. “I exercise my right as a free citizen to spend my own money in my own way, so that I can go in on the day, at the time, with the doctor I choose and get out fast.”
Conclusion
The internal market was effectively abolished in March 2019 through the merger of NHS Improvement and NHS England. Some have bemoaned its adverse effect on the quality of care, while others criticized its unintended consequences of increased costs. Today, the central tenets of “Working for Patients” and all legislations associated with it are roundly rejected by the British electorate today and all major political parties, including the Conservatives. The Conservative manifesto in 2017 states that “NHS’s own internal market, which can fail to act in the interests of patients and creates costly bureaucracy.”
“Working for Patients” is an accurate reflection of Thatcherism as a whole. Its methods of policy framing remain popular in neoliberal circles internationally. Packaging budget cuts, partial privatizations and offloading to private medicine into “internal market” and “patient choice” was a thinly veiled campaign of assault that lasted for decades. It represents every incompatibility of Thatcherism and the founding premise of NHS, which is to provide care indiscriminately to all British citizens since 1948.
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