New Right Conservative Government

The creation of the NHS saw the state take on an interventionalist role providing healthcare which was fully comprehensive, universally free for all at the point of use and funded through national insurance and general taxation (Walsh et al, 2000). After a period of consensus, successive governments have scrutinised the sector leading to its attempted reforms but it is argued that there is considerable continuity between governments regardless of the party in power (Baggot, 2007). This essay will consider the proposals made by New Right and New Labour for the NHS, looking first at what influenced each party’s proposals.

The key area’s the essay will focus upon are the internal market, GP fund holding, Primary Care Groups (PCG’s) and preventative health to allow the interpretation of the extent to which New Labours proposals differ from those of the previous New Right Conservative Government. When Thatcher began her first administration, the NHS was not meeting public expectations and problems with resources and funding were becoming increasingly apparent, with furious rows erupting over the issues between politicians and the medical profession (Leathard, 1990).

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Thatcher considered a move to private health insurance which never materialised as it was widely rejected by her peers. It is argued that Thatcher only stayed true to the core objectives of the NHS only because of the political damage it could do to the party if they were challenged (Lund, 2008). The Griffith’s report of 1983 and American market economist Alain Enhoven were highly influential in what would become the most radical reforms ever proposed for the NHS.

The Griffiths report outlined how making the sector more business like, creating competition between providers and linking funding to productivity would strengthen the sector in terms of cost effectiveness as well as managers being introduced at every level to improve the quality of management. Enhoven strengthened these ideas and discussed ways to mimic a market to make the NHS more responsive to its consumers, a purchaser provider split would help money to follow the patients, improving quality and cost effectiveness (Renade, 1997).

Further issues with bed reductions and the escalating pressure on services lead to the focus continuing on finding new ways to allocate funding and resources (Bochel et al, 2005). The ideas around an internal market were to be the central grounding of the proposals made in the 1989 White Paper ‘Working for Patients’. The main aims of the white paper were to: extend patient choice, devolve responsibility and secure better value for money within the NHS.

The key proposals to make these aims happen were the purchaser-provider split to increase best value, GP fund holding meant that money would follow the patient and medical audit to promote quality (Renade, 1997). The Black Report of 1980 confronted the Conservative government with the effects of health inequalities and made a number of suggestions of how to reduce not just via health policy but also through other sectors such as housing. This was ignored by the party even in the creation of ‘The Health of the Nation’ (1992).

Although it illustrates a considerable shift in public policy under the Conservatives, it ignored many of the issues raised in the Black Report (Bochel et al, 2005). It was on the other hand, seen to be ‘rolling back’ Thatcherism and stressed health rather than health care. There were contracts for GP’s and Dentists regarding preventative work in key areas but the plan was highly criticised as there was little strategy as well as the targets being unrealistic as they followed current trends, allowing the government to make progress towards them with little action (Powell, 1999).

In 1997, Blair came into office and proposals for reform began imminently for the NHS. Like New Right, New Labour heavily scrutinised the sector, but this time many of New Labours proposals were presented as a reaction to the previous reforms (Klein, 1998). This can be seen explicitly in his 1997 manifesto where Blair pledges to put an end to the ‘Tory’ internal market and GP fund holding, reduce waiting lists, toughen targets for quality and to increase the drive on public health (Blair, 1997).

Thatcher had been heavily influenced by monetarist ideas and the ‘free hand’ of the economy but Blair took his influence from Anthony Giddens, who articulated the ‘Third Way’ in politics. This was to encourage collaborative working and place the public and patients at the heart of the process, using what had worked and discarding what didn’t (Powell, 1999). There were many criticisms of previous Conservative reforms.

It was argued that the new management structure diverted money away from the patients instead of following them into unnecessary administrative and managerial costs. Instead of additional funding, New Labour pledged to cut the bureaucracy from such excessive management through reducing the amount of purchasers through the creation of PCG’s and inject the estimated billion pounds to be saved back into the NHS (Klein, 1998). Klein (1998) points out that this aim was unlikely to be achieved as the PCG’s would also be a huge burden in terms of administrative costs.

With regard to GP fund holding and the internal market, it was perceived that the competition prevented the sharing of best practice and created a two-tier system with some patients benefiting more than others. Labour thus wanted to reduce competition and improve standards, with their new rhetoric being around co-operation, co-ordination and quality opposed to competition (Klein 1995). Such ideas were to form the basis of the 1997 White paper ‘New NHS: Modern, dependable’ which aimed to loosen the central planning, reform the internal market and give greater power to primary care groups.

There was also great emphasis on improving standards through National Service Frameworks and improving access via NHS direct and walk in centres (Renade, 1997). As the Conservatives had been hit with the ‘Black Report’ on health inequality, the area was revisited and the ‘Acheson Report’ (1998) showed that health inequality had broadened (Bochel et al, 2005). The pattern remained of individuals being responsible for their own health and making the right choices but without the blame factor associated with the Conservatives.

The Green Paper, ‘Our Healthier Nation’ (1998) is a clear example of New Labour building on previous proposals by the Conservatives in ‘Health of the Nation’ however, New Labour went far beyond the New right and sought to find and limit the structural causes of ill health and health inequalities in their proposals (Powell, 1999). It is argued that although there is an acknowledgement of relationships between health inequalities, finding the solution to them has been and still is very challenging (Bochel et al, 2005).

New Labour has also been highly criticized for the huge contradiction of their unwillingness to tackle the alcohol and tobacco industry (Renade, 1997). New Labour had made clear the intention to abolish the internal market before they came into office. Their major criticisms of the internal market were: competition was too fierce, best practice not shared as well as perverse incentives driving staff (Klein, 1995). It is argued by that in reality the internal market had none of the features of a retail market and that ‘the NHS executive drew lines of regulation and monitoring so tightly that no real competition could emerge… t seemed that the government had built a system which was paying for the costs of competition, fragmentation and perverse incentives- yet were getting none of the benefits’ (Illiffe and Munroe, 2000: 315). The proposals made by Blair and Thatcher for the NHS differ immensely in terms of ideology but it is argued that although Labour emphatically criticise Conservative policies, they still build on them to a large extent (Klein, 1998). New Labour heavily opposed the internal market, yet the purchaser provider split remained in tact.

Powell (1998) emphasises this was because Labour were forced to base their plans on the landscape which the Conservatives had created during their long period of opposition. New Labours proposals meant that co-operation would replace the competition as a result of fewer purchasers and longer terms of contracts (Renade, 1997) At face value, New Labour policies seem to have an entirely new dynamic. Lund (2008) argues that it is Blair’s use of the ‘Third way’ in his policies which allows him to distance himself from Thatcherism and Old Labour, something he manages to have done quite successfully.

In doing so he has also succeeded in sidelining the modifications made under Major which had a huge impact on the internal market. In the Conservative 1992 manifesto, the Citizens Charter programme was to drive the implementation of the reforms and improve the quality of public services. Lund (2008) argues that it was here that the ‘Third Way’ was created in health care and not under New Labour. Illiffe and Munroe (2000) agree with this, although they suggest whilst under Major, the focus was incoherent thus Labour have taken on the changes and articulated them.

Purchasers and providers were already encouraged to work together and it is suggested that this was due to Major being aware of accusations of a two-tier service which affected the outcome of the internal market considerably (Lund, 2008). Klein (1998) argues that after Major there was nothing left of the internal market to abolish by the time Labour came into power so their hostility to it was pointless. New Labour also expressed clearly the intended abolishment of GP fund holding although many of the principles of fund holding can be seen in their creation, Primary Care Groups (Bochel et al, 2005).

The PCG’s would allow patients the benefits but not the disadvantages of fund holding as the responsiveness of the services would increase without the cost, bureaucracy, fragmentation and inequity of fund holding (Powell, 1998). Other accusations of fund holding were cutting care and discriminating against expensive patients but Klein (1998) argues that there is no evidence that this happened and that on the contrary, GP Fund Holding was actually a great success as it highlighted the importance of primary care as well as being widely taken up by GP’s.

As Health Authorities would no longer be the commissioning bodies, they would lead by drawing the Health Improvement Programs which largely built on the contracts for GP’s and Dentists by the Conservatives (Powell, 1998). There are many implications when examining the extent of differences between New Right and New Labour proposals. Much of the information can be contradictory between authors. Some describe the internal market under the Conservatives as ‘harsh’ whilst Labour is mostly affiliated with ‘softening’ the market and articulating the sometimes conflicting Conservative aims.

On the other hand, some authors describe the Market under New Labour as more fierce than it ever was under the Conservatives (Lund, 2008). Other implications can arise as a result of implementation, as demonstrated by the Conservative’s. The ‘free market’ was to solve the problems of the NHS but then conflicting proposals which shaped the management of the NHS did not allow this to happen. In ideology, the proposals differ greatly but in practice there is considerable continuity between the parties.

When assessing the extent of the differences between the proposals made by New Right and New Labour, Powell (1999) states that it is more evolutionary than an outright change of direction. New Labours ‘Third way’ takes what has been proven to work and phases out what hasn’t therefore the purchaser/provider split was kept and GP fund holding was not. It is argued however, that this was never phased out, just widened and guised under a new name.

All GP’s were now involved rather than a select few showing evolution rather than new idea (Powell, 2000, Leathard, 1990). The Health of the Nation was a key policy in a change in the direction of public health under the Conservatives but didn’t pay attention to important issues raised such as health inequality. New Labour’s green paper ‘Our Healthier Nation’ was another clear evolution of previous policy, with similarities in proposals but better articulated with more efficient targets and strategy to achieve the outcomes.

The main differences between the parties proposals are the targets and quality frameworks which the Conservatives were lacking, have now been introduced by New Labour with more emphasis paid to the quality of the services rather than solely on cost effectiveness. Attention is now being paid to the factors beyond the individual that can contribute to inequality. Services although already encouraged to work together under Major, were heavily contradicted by the management style in place.

Partnerships have been promoted heavily under New Labour and this was one of the key aims in their proposals. The extent of the differences between the proposals seem vast in terms of ideology but slight when looking beyond the rhetoric and at what changes were made. New Labour build on New Right proposals to a large extent but it doesn’t seem that they are ‘stealing’ policies, just having to take what is there and make it better and with no new idea’s is clearly evolutionary. In effect, New Labour seems to be reforming the reforms made by New Right.