Feature

Radical surgery

In failing to create an open market in healthcare, the NHS reforms have been a frustration to the Right - but the think tanks still have ideas for radical reform. Wendy Moore investigates

It is rare enough these days for Labour politicians, let alone Conservatives, to speak of NHS founder Aneurin Bevan. So when health secretary Stephen Dorrell repeatedly quotes Bevan to back up his ideas, while firmly committing himself to a comprehensive health service funded solely from taxation, it is tempting to believe the NHS is finally ‘safe in their hands’.

Widely seen as the standard bearer of the Tory Left and tipped as a potential future leader, the recently appointed health secretary marked himself out as a liberal on welfare issues when he clashed with Margaret Thatcher in the 1980s over healthcare and education. His campaigns to inject private money into public services and cut management costs in the NHS brand him a Right-winger on economics. But he has also won a modest funding increase for the NHS in the budget and has briskly dismissed the doom-and-gloom merchants who suggest the country can no longer afford a comprehensive health service.

However, several prominent right-wing Tories argue that Dorrell is unrepresentative of the Right’s approach to healthcare. They say Dorrell’s centre-Right beliefs are being squeezed out in a growing consensus between hard Right-wingers and Labour modernisers. While Dorrell’s promises may soothe public fears for the NHS, behind the scenes the Right-wing think-tanks are lobbying for a fundamental shake-up of the welfare state. Some of the furthest Right ideas - like total abolition of the NHS - remain on the fringes. But other proposals - such as shrinking the NHS in favour of private medicine - are becoming fashionable with both the right and Labour modernisers, including advisers close to Labour leader Tony Blair.

The issue uniting old enemies is future funding of the welfare state. The debate was fuelled by the recent Healthcare 2000 inquiry, headed by former NHS chief executive Sir Duncan Nichol and funded by the drugs industry, but also including Patricia Hewitt, former adviser to Neil Kinnock. Its report argues that rising costs and demands mean the state can no longer afford a comprehensive NHS funded through taxation and must consider options like explicit rationing, charging for extras and a bigger role for the private sector. The logical inconsistencies of the report have been highlighted, not least by Dorrell, but also by the National Association of Health Authorities and Trusts. Both dismiss the premise that health costs are spiralling out of control and point out that we must still pay for healthcare, whether through taxes or privately, no matter how much costs rise. The NHS has proved itself the cheapest and most efficient way of meeting health needs. Nevertheless, the idea that the NHS is unaffordable and a mixed market is the answer, is gathering momentum on all sides.

Sociologist Dr Tim Evans, public affairs manager of the Independent Healthcare Association, an independent charity representing private hospitals, says we are witnessing the ‘death of Left and Right politics’. Such concepts are now meaningless, he argues, as both Right-wingers and Labour modernisers advocate a return to 19th century-style friendly societies and co-operatives to replace state-run services. He points to recent pamphlets from Stephen Pollard, research director of the Left-leaning Fabian Society and understood to be an adviser to Blair, which advocate more private medicine, including trade unions offering private health insurance to members.

Rather than Left versus Right, Evans says the distinction is now between libertarians, who want ‘bottom-up’ welfare, and authoritarians, who believe in ‘top-down’ services. The libertarians include both Labour modernisers and Right-wingers wanting to ‘build bridges’ between private business and community or union interests. The authoritarians include Labour traditionalists and centre-Right politicians, committed to maintaining the welfare state.

‘It has happened,’ says Evans, ‘because the idea that the state knows best and that the best care comes from tax funding has been proved not only to be patently wrong but also people are losing faith in it.’ Now the state can no longer afford to provide comprehensive services, private and public interests must collaborate to fill the gap, he says. Ultimately, he expects the private sector to take over clinical services, with perhaps even doctors and nurses organising buy-outs of departments or hospitals. Evans places Dorrell somewhere between these two camps - backing a comprehensive NHS but dabbling in Labour ideas involving unions and co-operatives.

Roderick Nye, acting director of the Social Market Federation, which describes itself as an independent think-tank but publishes mainly Right-wing views, believes Dorrell is firmly out of step with the cross-party consensus. ‘The future agenda makes for strange bedfellows’, he says.

Right-wingers are keen to reassess health priorities and the way in which the NHS is financed, he says, while Labour modernisers agree hard choices must be made as costs rise. ‘The big question is whether you can retain the model of a health service which is predominately free at the point of access regardless of ability to pay,’ he says. Although voters say they want more investment in health they also want to pay lower taxes, he argues. There are therefore two choices: limiting healthcare to a ‘core curriculum’ of services available to all, with private insurance for anything outside, or limiting the NHS to those who cannot afford private health with compulsory insurance for the rest. But while Blair could propose the unthinkable and end comprehensive healthcare because voters trust Labour on health, the government cannot risk such an unpopular idea, suggests Nye. ‘Trapped in the middle are the consolidators like Kenneth Clarke and Stephen Dorrell who have to say in the run up to an election we can afford this,’ he says.

Dr Eamonn Butler, director of the avowedly Right-wing Adam Smith Institute, agrees. ‘The Left is very much more aware than it used to be that individuals are better at making decisions for themselves than someone in Whitehall,’ he says. Labour has been forced to examine alternatives by the ‘funding crisis’ facing all Western countries. The ‘logical solution’ is an insurance-based scheme with a safety net for the poorest, he argues. He wants fund-holding extended, with GPs allowed to advertise to boost competition.

The campaign for a mixed market in healthcare is backed by several other Right-leaning organisations. A recent report from The European Policy Forum, A mixed market in healthcare, funded by private healthcare group PPP, outlines the growing trend towards such systems in other countries. It notes that in Britain the NHS reforms have already led to a more mixed market in health provision, with NHS hospitals increasing their pay beds and private hospitals winning NHS contracts. Encouraging more people to finance their own healthcare or imposing compulsory private insurance would prompt them to think more carefully about their use of services and limit costs, it suggests. Limiting NHS care to a ‘core package’ of services would allow the private sector to step in and offer anything outside. The report goes on to explain, rather chillingly, that in future years genetic research will allow private insurers to assess the health risk of different people and charge them premiums accordingly. It concludes that: ‘Some of those most in need of care would be unable to afford cover.’

The Institute of Directors has also leant its support to the mixed market approach. Director general Tim Melville-Ross argued that some funding of health should be transferred from the state to individuals in a debate sponsored by BUPA last November. Pedalling the usual line that no government will be able to fund comprehensive healthcare from taxation alone, he urged that more people should ‘accept responsibility for their own healthcare’. He also backed more financial freedom for trusts and a core list of guaranteed NHS services with private insurance picking up the left-overs.

Individuals who have echoed these arguments include Sir Rodney Walker, former chair of the NHS Trust Federation and now its honorary president, who told the federation’s last annual conference that the NHS might become a safety net for the elderly and seriously ill. Other care could be offered by private insurers. Describing himself as a floating voter who has never joined any political party, Sir Rodney says he simply believes that rising NHS costs make it sensible to examine alternative options.

So far Stephen Dorrell appears to have resisted the siren calls from Left and Right. Michael Goldsmith, vice-chair of the Conservative Medical Society, is one of the moderates advising Dorrell to dismiss the Healthcare 2000 arguments. ‘I am 100 per cent against Healthcare 2000,’ he says. ‘It is wrong, it is unnecessary and - even though I work in the insurance sector - I feel insurance is very inefficient.’

Goldsmith believes there is no evidence that NHS costs are spiralling out of control and that the state can continue to pay for healthcare. Encouraging more private healthcare is expensive because private hospitals can never beat the NHS on cost, he argues. He rejects a ‘core list’ of guaranteed services but is not entirely against a national list of services which could be excluded from the NHS, like fertility treatment. He wants GP fundholding extended and is an enthusiastic supporter of the private finance initiative, while recognising it will never fund all capital schemes in the NHS. And while he supports further growth in the private sector’s share of the internal market, he draws the line at any privatisation of the purchasing side, such as compulsory insurance.

With such cosy agreement between Left and Right it might come as almost a relief to find there are still some old-fashioned Right-wingers out there arguing extreme solutions. Dr David Green, director of the health unit of the Institute for Economic Affairs, describes himself as a ‘full-frontal free-marketeer’. He advocates scrapping the NHS in favour of insurance-based care, with government subsidies for those who cannot afford insurance themselves. Although this would cost more, the advantage would be greater choice, he suggests. He also proposes a return to 19th century ideals of charity and self-help, with trusts privatised like the old voluntary hospitals.

Even he would not go as far as Brian Micklethwait, editorial director of the Libertarian Alliance. As well as campaigning for the legalisation of hard pornography, drugs and various outlawed sexual acts, the LA wants total abolition of state healthcare and deregulation of medicine allowing anyone to practise as a doctor. The short-term consequences would be ‘pretty terrible’, concedes Micklethwait and ‘certain people would die who would not otherwise have died’. But this, he argues, is no different from an NHS which rations care and fails the most needy.

Most of the radical Right-wingers at least accept their ideas will probably never come to fruition. The new Left-Right allies, on the other hand, are rapidly gaining confidence.