The Guillebaud Report

REPORT OF THE COMMITTEE OF ENQUIRY INTO THE COST OF THE NATIONAL HEALTH SERVICE

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

Cmd. 9663

MEMBERSHIP OF THE COMMITTEE:

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)

SUMMARY

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.

THE CURRENT COST OF THE NATIONAL HEALTH SERVICE IN ENGLAND AND WALES DURING THE PERIOD 1948 TO 1954

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).

THE CAPITAL COST OF THE NATIONAL HEALTH SERVICE IN ENGLAND AND WALES—1948 TO 1954

General

(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).

FUTURE TRENDS IN THE COST OF THE NATIONAL HEALTH SERVICE

(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.

PART II

THE GENERAL STRUCTURE 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.

THE BASIC ORGANISATION OF THE NATIONAL HEALTH SERVICE

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.

Finance

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).

Scotland

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.

POINTS RAISED IN EVIDENCE

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.

GENERAL CONCLUSIONS ON THE STRUCTURE OF THE NATIONAL 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.

PART III

HOSPITAL AND SPECIALIST SERVICES

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.

Charges

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.

Scotland

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).

Charges

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.

HOSPITAL STAFFING

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.