All Commentary
Wednesday, August 1, 1962

The British Nationalized Health Service

Mr. Winder, formerly a Solicitor of the Su­preme Court of New Zealand, is now farming in England. He has written widely on law, agriculture, and economics.

The late Lord Horder, who was one of Great Britain’s most dis­tinguished surgeons, speaking prior to the time Britain’s medical system was taken over by the state, said, “It is universally ac­knowledged that our health serv­ices are the best in the world.”

It is probable that a good many other countries will have made the same claim so we shall not press the point except to say that in 1948, when a socialist government established the British National Health Service, it took over a medical system well up to the standards of the time.

Yet that government seems to have been quite certain that once in the control of the state this system would improve. Many so­cialist Members of Parliament claimed that the country had, in fact, no medical organization, for they could not conceive of such a thing without a central authority to guide it. The central control which they established would, they believed, not only secure a more efficient medical service but would also ensure a cheaper one. The expected cost of the new Na­tional Health Service had been carefully worked out beforehand by the famous economist, now Lord Beveridge, who arrived at an estimate of £170 million a year. This was less than the £180 million which all medical services were believed to have cost the peo­ple in private expenditure before the war. Moreover, it was claimed that this figure should not have changed much by 1965; the im­provement in general health which the nationalized services would bring about should prevent any increased costs.

Britain‘s National Health Serv­ice has now functioned for four­teen years so let us see to what extent the high hopes for it have been fulfilled.

The Estimate Was Low


The first and most obvious fact is the gross error in the forecast of costs that was made by Lord Beveridge. In its first year the nationalized service cost not £170 million but £377 million. The figure has risen year by year; in 1960 it cost £820 million of which only £23 million was for capital expenditure.

The British Cost of Living in­dex shows that most prices were multiplied by three between 1938 and 1960. Medical costs, however, are more than four and a half times what they were. This, as we shall see later, has been due, not to any increased remuneration going to doctors, but chiefly to in­creased hospital expenses.

Below are the published costs of three famous hospitals, in 1938 when they were charitable trusts, and in 1960 when they were state institutions.

These show a rise of costs from six to nine times—far above any increase which can be accounted for by inflation. These figures are typical of an increase which has taken place in all of Britain‘s hos­pitals. Administrative costs, in­cluded in the above figures, have risen from eleven to eighteen times although hospitals no longer have to collect funds from many sources as they did under the old system.

The rising costs of drugs and pharmaceutical preparations have also been of concern to the govern­ment. In 1950 these were £37 mil­lion and in 1960, £89 million. In 1951, in an effort to prevent waste, the government imposed a charge of one shilling on each prescrip­tion. This was increased to two shillings in 1961.



Number of Beds

Average Weekly Cost Per Patient









£ 6/ 3/8

£ 36/10/11

Charing Cross



£ 4/10/ 1

£ 36/14/11

Royal Portsmouth



£ 2/ 9/11

£23/ 8/10


Both these charges were hotly resented by the socialists as being departures from their principle of free medicine. As a socialist Mem­ber of Parliament once expressed it, “If the Tories laid their sacri­legious hands on the Health Serv­ice, which the Opposition regarded as the very temple of the nation’s social security system, the Labour Party would fight it with the same determination which they had brought to fighting the Rent Act.” Such tirades, however, had no ef­fect on the conservative govern­ment in its determination to en­force these minor charges, even though they have not stopped the rise in total cost of drugs and pharmaceutical preparations.

Better Service?


That all British medical services cost so much more in real terms than they did before they were nationalized might be tolerable if the services the people receive had correspondingly increased. But, who can value that intimate asso­ciation which should exist between the patient and his doctor? Under the old system of free enterprise the doctor was an authoritative master, a trusted friend, and at the same time a servant of his pa­tient who must pay his fee. Under the system now practiced in Great Britain, much of this excellent relationship is undoubtedly re­tained; nevertheless, it is inter­rupted by an invisible stranger in the form of a higher medical au­thority peering over the doctor’s shoulder with power to criticize his work and inflict a fine upon him if he is too experimental in his treatment or prescribes too many expensive drugs. The doctor is no longer the servant of the patient but of the National Health Service.

The importance of this change in the doctor’s status is difficult to measure. The old traditions are still a powerful force with every honest doctor, but there can be no doubt that the former relationship between the doctor and his pa­tient is slowly being undermined; and this tendency will increase as control passes to a younger gen­eration of medical men who have never known the old ways.

There is little doubt that if the matter were put to a vote the British people after 14 years of experience would still endorse the nationalized system. But this by no means indicates that they are getting better medical services than before; it merely means that they mistakenly believe such serv­ices are now costing them nothing.

To the man who is ill, the fact that he can call on a doctor and pay no fee seems to be such an obvious boon that he usually is ob­livious to the price he is in fact paying. Thirteen per cent of the cost of the National Health Serv­ice is paid in National Insurance Contributions, 4 per cent in minor charges, and the rest in general taxation. This supposedly free medical service costs an average of over a pound per week per fam­ily. One would have to be very ill to pay more than this in direct fees. It is this lack of association be­tween services rendered and pay­ments made which induces the British voter to turn a blind eye to the defects of his National Health Service.

The Function of Price


As everyone knows, the strength of a demand for any service very largely depends upon its price. When the state took over Britain‘s medical services and announced that in the future they were to be free, there was an instant and un­precedented increase in the de­mand for them. Under free enter­prise whenever there is a great increase in the demand for any service there is almost always a consequent increase in its supply. Does the same principle apply to socialized medicine? At first glance, yes. In 1952 there were 27,879 doctors employed by the

National Health Service either in hospitals or as general medical practitioners. The number had in­creased by 1960 to 32,223. The greater increase took place in the hospitals where the number of salaried doctors rose from 9,650 in 1950 to 12,300 in 1960, that is, by 27 per cent. During the same period, however, the number of staffed hospital beds increased only 41/2 per cent, from 453,000 to 473,000. This can be contrasted with a 33 per cent increase be­tween 1929 and 1938 under the competitive system. In 1935 there were more hospital beds in Britain per thousand inhabitants than there are today, yet one of the chief charges made by the social­ists against the competitive sys­tem was that it had insufficient hospital beds. The small increase in the number of beds, together with the fact that there were 466,­000 people on the waiting list for such beds in 1960, certainly sug­gests that the National Health Service has failed to meet the in­creased demand that the absence of medical fees has made upon it. This great shortage of beds has caused the authorities to insti­tute a system of priorities. Acute cases can always be found a bed, but those requiring operations for such complaints as hernia, vari­cose veins, and the like may have to wait up to a year and longer.

Hospital Shortage


Perhaps the chief reason for this failure of the National Health Service is that since its inception the building of hospitals has al­most ceased. Only one hospital was built in thirteen years. Many so­cialist doctors before nationaliza­tion believed that when the gov­ernment took over, all financial worries would disappear. With unlimited funds, the government would hasten to build all the hos­pitals required. In practice the position has been exactly the op­posite. The government has been far more cautious in its capital expenditure than the most con­servative of private concerns. Ov­erwhelmed by the unexpected and ever-increasing cost of its Health Service, it has tried to keep down expenditure by checking expan­sion.

Mr. D. S. Lees, a Senior Lec­turer in Economics, in an excel­lent booklet, “Health Through Choice,” has pointed out that this failure to spend money on new hospitals has been an outstanding feature of the British nationalized Health Service. Whereas before the war the yearly expenditure for capital purposes was about 20 per cent of current health expendi­ture, since nationalization it has been only about 5 per cent. Many medical men believe that nation­alization has actually retarded the development of Britain‘s medical services and that the British peo­ple are receiving a far poorer service than they would have re­ceived if the prewar system had been allowed to continue its de­velopment.

In “The Genesis of the British National Health Service” written by the well-known economist John Jewkes and his wife, the authors support the above conclusion, pointing out that in 19 9 Great Britain was more amply supplied with hospital beds in proportion to population than the United States, but that since the war this advantage has disappeared. “It is difficult to escape the conclusion that in the United States the quantity of medical services avail­able for each person is larger and is tending to increase more rap­idly than in Great Britain.”

They also make comparisons with the medical services of Switzerland which for the most part are still under the competi­tive system. The Swiss have more doctors and many more hospital beds per 1,000 of population. Be­tween 1948 and 1959, money spent on hospital building per head of population was four times as great in Switzerland as in com­paratively wealthy Great Britain. Waiting lists in Swiss hospitals are literally unknown.

True, the British government at last has been stung into activity by constant criticism and this year commenced a program to spend £50 million building hospitals over the next five years. Whether this expenditure will eliminate the long waiting lists for hospital beds remains to be seen.

These waiting lists have an­gered the socialists who seem to have forgotten that they are re­sponsible for the introduction of the nationalized hospital. In their publicity at the General Election in 1959 they stated, “Nearly half a million people are waiting for hospital beds; too many doctors’ surgeries are still grim and gloomy; too many hospitals are still out-of-date and makeshift; the mental hospitals are over­crowded and dilapidated and, in spite of gallant efforts by those in charge, are quite unsuitable for modern psychiatric care; the committees and staff of the Serv­ice have been frustrated by end­less administrative delays, and in­evitably enthusiasm has been di­minished.”

No Evidence of Progress


As for the hopeful claim made by Lord Beveridge that the Health Service would improve the health of the people, there is no evidence whatever of this. Infant mortality rates have improved, but so have they in many other countries with entirely different medical systems. Tuberculosis, pneumonia, and diphtheria have diminished, but the same is true elsewhere. Chronic diseases, cancer, and neu­rosis have increased.

It was claimed that the expen­diture on the National Health Service was a form of national investment which would increase wealth by reducing the amount of days lost to industry through sickness; but figures for absence from work on account of illness have in no way diminished.

In summation, the British Na­tional Health Service has failed to meet the increased demands made upon it, and even after the change in the value of money is allowed for, medical attention costs the British people a great deal more than before the war. Moreover, in those material factors which lend themselves to measurement, Brit­ain‘s medical services have ex­panded far more slowly than they did in the 30 years before nation­alization. They also have expanded more slowly than in the United States and Switzerland where medical treatment has remained, for the most part, on a free en­terprise basis. If the British peo­ple still believe in their state-owned National Health Service, it is not because of its virtues but solely because of the illusion that it costs them nothing.

What the Poor Had To Lose


It may be argued that at least the poor have benefited by not having to pay the doctor’s fees. Even this is doubtful. Prior to nationalization, the great amount of charitable hospital service, which then existed, looked after them. Today, the poor must share with others the crowded surgeries which are the result of “free medicine.”

It could be argued, of course, that these crowded surgeries and hospitals are evidence of the cry­ing need for a free medical serv­ice which must have existed be­fore nationalization but was con­cealed by the inability of the poor to pay the doctor’s fees. But the crowded surgeries are not due so much to really sick people asking for treatment they could not pre­viously afford as to the desire of many people to have free treat­ment for the slightest cold or ill­ness. Before nationalization, a really sick person was sure of treatment whatever his financial means. Now, with the many claims on the doctors’ services, a sick person may fail to get the atten­tion his illness requires.

If we look upon the National Health Service as a form of char­ity, it is worth considering whether the British people really need it. Whereas in 1960 health services cost them £820 million, their beer and spirits cost £1,001 million and their tobacco £1,140 million.

It is sometimes claimed that the chief beneficiaries of the na­tionalized system are the middle classes who, prior to the Na­tional Health Service, had to pay their doctor’s fees. It is difficult to see their gain, however. The taxes they pay for medical serv­ices they may not receive average well over a pound a week per family. The middle classes do, in fact, pay for medical care, the only real difference being that now they are deprived of some of that personal responsibility which was once the basis of their char­acter.

Only about 5 per cent of the people now employ those doctors who have kept out of the National Health Service. They pay twice over, for they must also pay in taxation their share of costs for the nationalized service.

An Ambiguous Position


In considering the doctor him­self under Britain‘s National Health Service, the word “nation­alized” may seem a bit out of order. The position of the gen­eral practitioner, for instance, is an ambiguous one. He may still have his own private patients if he can get them; but the doctor who originally believed he could get the best of both worlds by having both paying and state patients soon found that the vast majority of them preferred to register un­der the state system, thus retain­ing his services at no apparent cost to themselves. The result is that all but a few British doctors now depend on the National Health Service for a living.

Some six hundred doctors re­mained outside the scheme from the beginning and are allowed to carry on under the old competi­tive system. Lately, these inde­pendent practitioners have grown in number, probably due to the growth in private health insur­ance. In 1948 some 100,000 people subscribed to private health poli­cies; in 1960 more than 1,000,000. According to Dr. John Hunt, sec­retary of the College of General Practitioners, one quarter of Brit­ish doctors have insured their families for private hospital treatment.

The general practitioners em­ployed by the National Health Service are paid, not according to the amount of work they do or the number of patients they attend, but according to the number they can persuade to register on their panel for medical services if they should be required. For every pa­tient on his panel, a doctor re­ceives a fee, whether he attends such patient or not. Therefore, the majority of general practitioners aim to get as many registered pa­tients as possible. A doctor is ex­pected to accept on his panel ev­eryone who applies. But he natu­rally does his best to avoid poten­tial patients who might require his services too often, such as old people and chronic invalids.

A general practitioner is al­lowed to have up to 3,500 regis­tered patients, yet doctors claim that about 1,500 is all they can properly attend. More than half of Britain‘s general practitioners have more than 2,500 patients while 29 per cent have more than 3,000. For each patient on his panel, a doctor now receives 19/6 ($2.73) a year—occasionally more, to induce a doctor to go in­to unpopular areas or to a country area where the panel must neces­sarily be small. There are also allowances for “good behavior” such as attending refresher courses. Out of his capitation fee the doctor must pay the costs of his surgery and the wages of his receptionist or nurse. The fee is the same for the doctor who em­ploys capable assistants and uses the most modern equipment as for the doctor who gets along with the aid of a stethoscope and an overworked wife. The result is that the doctor who accepts only as many patients as he can con­scientiously handle will have a very inadequate income. For more income, a doctor must have a large panel of patients, which will mean a crowded surgery, hurried inter­views, and often a snap diagnosis. The system places a premium on bad and hasty service. Moreover, because the patient has nothing to pay, he tends to visit his over­worked doctor as often as possi­ble. As one doctor has put it, “The patient seeks the doctor to gratify his every whim; the doctor tries everything in his power to avoid the patient.”

Under such conditions, it is not surprising when a doctor develops a feeling of guilt and resigns the service, explaining as one did re­cently, “The horror of this sys­tem is that many excellent doctors are trapped by it, but I have hated myself for it and now I am out of it.”

Many of the patients also are unhappy. Knowing the reluctance of the doctor to visit them, the more considerate do their best to visit his surgery, though they should have remained in bed. Knowing also that their visit brings the doctor no financial re­turn, some are constantly apolo­getic. “I’m sorry to trouble you, Doctor,” is a phrase constantly on their lips. Others, of course, aggressively insist on their rights and expect the doctor to do any­thing they demand, such as writ­ing a prescription for some patent medicine they have seen adver­tised so they can have it at the expense of the National Health Service. Young doctors sometimes are suspected of prescribing too generously in order to attract new patients to their panels. Many doctors believe their surgeries are looked upon as social centers by women patients.

Passing the Buck


There is a minimum service which the doctor feels compelled to perform, but only the more con­scientious will go beyond this. Most, if they can possibly do so, send their more troublesome jobs to the hospitals, thus adding to the already excessive demands upon those institutions. Simple operations, formerly taken in stride, are now handled this way, as are such time-consuming jobs as a check-up to find out the pa­tient’s general state of health. The District Medical Executive Coun­cils do not seem to resent this passing of responsibility to the crowded hospitals. They even en­courage it by forbidding the gen­eral practitioner to do a number of jobs which were formerly within his province. In most areas, he is not allowed to do X-rays or blood tests or perform regularly on women patients the cancer-warning Papanicolous test.

One of the most constant com­plaints of the general practitioner is the great amount of paperwork required by the authorities. The majority of British doctors may still have the skills and loyalties inherited from the past, but under the National Health Service, they have every reason to forget them and to take as little responsibility as possible. Whatever service they may render their patient will not in any way affect their capitation fee.

Since nationalization, the peo­ple have developed a habit of suing their doctor in the Law Courts for negligence. Although such actions existed in the past, they have now become much more common. This again makes the general practitioner reluctant to do more than the minimum re­quired of him. After all, there is a limit to the responsibility one can undertake for 19 shillings and 6 pence. Moreover, medical col­leagues on the salaried hospital staff are in no such invidious posi­tion, for the government is re­sponsible for their mistakes. This has caused some doctors to sug­gest that the general medical practitioner would be better off as a salaried official than he is under the present system, in which he has all the disadvantages but none of the advantages of in­dependence.

It is worth noting that this British system of socialized medi­cine with its capitation payments was adopted in Australia in 1946 by a socialist government. In 1952 a conservative government abol­ished it, replacing it by insurance against illness through private companies. Although the govern­ment did not entirely desert the medical field, it restored the old and well-tried relationship be­tween doctor and patient. This government, incidentally, is still in power.

Third Party Medicine


In the past the doctor was re­sponsible only to his patient and to public opinion. Now he has a higher authority which he must conciliate. He may be told, for ex­ample, by his District Medical Executive Council that he is giv­ing his patient too many drugs of an expensive kind and that his drug bill which the state has to meet is above the average for his district. If these excessive costs are continued, he may be required to pay a proportion of the bill him­self. Here is a paradoxical instruc­tion to doctors from a recent memorandum by the Ministry of Health: “Without prejudice to the doctor’s rights to prescribe what­ever he thinks necessary in any individual case, a doctor may be called upon to justify the cost of his prescription.” Another mem­orandum, evidently trying to overcome the natural reluctance of the panel doctor to visit the patient, gives full instruction as to when such visits should be made.

Another cross the general prac­titioner must bear is that a pa­tient may inform the District Med­ical Executive Council that his doctor is not giving him the full service to which he feels entitled. Occasionally the public is regaled in the press with a list of fines inflicted on doctors who have com­mitted such offenses as failing to answer night calls. In 1960, dis­ciplinary action was taken against doctors in 410 cases.

But what most troubles the general medical practitioner is that his fixed fee, multiplied by more patients than he can ade­quately serve, leaves him with a far lower real income than most doctors enjoyed before the war.

Doctors Are Leaving


In 1951, after an inquiry on the remuneration of doctors, the capi­tation rate and the salaries of hos­pital doctors were raised to com­pensate for inflation. Since then, rates have risen only slightly, but prices generally are up a third, causing a decline in the real in­come of doctors. Naturally, doc­tors are dissatisfied. Older mem­bers of the profession seldom can do anything about it, but the younger members are showing their disapproval by simply leav­ing the country. John R. Seale, M.D., M.R.C.P., has shown the extent of this exodus in a booklet published by The Fellowship for Freedom in Medicine. Although doctors have always emigrated from Great Britain, they are leaving now at a rate higher than ever before. Between 1956 and 1960, of doctors trained in British medical schools, 1,070 have emi­grated to Canada, 1,100 to Aus­tralia, 190 to New Zealand, and 750 to the U.S. In the twelve months of 1960 more doctors trained in England and Ireland emigrated to the U.S. than in the whole period from 1930 to 1939. Canadian statistics show that British doctors are entering Canada at a rate five times as great as that for British immi­grants in general. Last year, one-third of the medical students who qualified in Great Britain left the country.

Moreover, knowledge of the dis­advantages under which British doctors are now serving has pene­trated to the rising generation. Although the number of students at British universities has doubled since the war, the number study­ing medicine has actually de­creased since the introduction of the National Health Service. There were 14,200 medical stu­dents at British universities in 1950 compared with 12,700 in 1958. The resulting vacuum in the British Health Service has to be filled with doctors from the Com­monwealth and by foreigners. Be­fore the war, some 200 Common­wealth doctors a year registered in Great Britain, chiefly from Canada, Australia, and New Zea­land. In 1960 the number was 1,400, mostly from India and Pak­istan. The number of foreign doc­tors registering before the war with the British Medical Council was under a dozen a year. In 1960 it was 1,701 and last year over 2,000—from such places as Syria, Spain, Greece, Peru, Turkey, Ja­pan, and Yugoslavia. Some of these are well-trained but, as Dr. Seale points out, others are from medical schools of which the Brit­ish authorities can have very little knowledge. Nearly half of all junior posts are now held by doc­tors from overseas.

A report issued by the Nuffield Provincial Trust showed that in many casualty departments the provision of medically qualified supervision had broken down and that able nursing sisters were making the diagnosis and carry­ing out the treatment. A doctor was usually available, but often he spoke no language in which he could be understood. Recently the General Hospital at Weston-super Mare advertised for a Senior House Officer in Surgery. It re­ceived applications from one Brit­on, one Australian, one Portu­gese, one Greek, one Japanese, three Anglo-Indians, three Egyp­tians, five Pakistanis, and forty-three Indians.

Young British doctors who have some memory and regard for older medical traditions seem to be expressing their opinion of their National Health Service in that manner sometimes described as “voting with their feet.” Brit­ish nurses are infected by the same spirit. There is a general dissatisfaction with their rates of pay and, for the first time in Brit­ish history, there has been talk of a nurses’ strike. Fortunately, the high ideals of the profession have prevailed. It takes some time to undermine a good medical sys­tem and particularly to destroy the long-established traditions of trust between doctor and patient which the older British doctors remember. Nevertheless, the Brit­ish National Health Service is do­ing both.

Perhaps the greatest tragedy is that the generation of Britons now growing to manhood may un­questioningly accept the National Health Service, for they never will have known anything better.