Downing Street Years - Margaret Thatcher [380]
Nor, of course, were we neglecting the ‘supply side’. The whole approach we were taking in the review was designed to remove obstacles to supply. And in addition the review was considering a significant increase in the number of consultants’ posts, which would have an impact on the private sector as well as the NHS. We had further plans to tackle restrictive practices and other inefficiencies in the medical profession, directing the system of merit awards more to merit and less to retirement bonuses, and we planned the general introduction of ‘medical audit’.*
Nigel fought hard even against these limited tax reliefs but I got it through with John Moore’s help in the first part of July. In other areas I was less happy. The DHSS had been shaken by the Treasury’s criticisms and responded by seeking to obtain Treasury support for their proposals at a formative stage before they presented the review. This gave the Treasury an effective power of veto. Accordingly, the DHSS put forward, with Treasury agreement, a much more evolutionary approach. Though money following the patient and self-governing hospitals remained goals of policy, they were relegated to the indefinite future and ‘top-slicing’ took centre stage in the short term. (Indeed, this idea staggered on, ever more feebly, through almost the entire length of the review. But it failed in its purpose of diverting us from a genuine system of money following the patient, and never made its way into the white paper.)
I had no objection, in principle, to an evolutionary approach to the introduction of self-governing hospitals. We already had a model from our education reforms: hospitals could opt out of DHA control while remaining within the NHS, just as grant-maintained schools opted out of local authority control while remaining in the state sector. But I was suspicious of the distinction that was emerging between short-and long-term changes, generally worried about the slow pace of the review and thought we were losing our way.
What made me uneasy was that my Policy Unit — which had from the first championed the three reforms of the buyer/provider distinction, money following the patient and independent hospital trusts — presented me with two worrying criticisms. First, we were in danger of letting these ideas be overwhelmed by Treasury considerations of short-term cost control. Second, the reforms under discussion, while vital, extended choice to the doctor and to health service managers but not to the patient who would continue to be the dependant of a locally monopolistic DHA. What was needed to remedy this was some variant of the old idea of the GP as budget holder. In the Policy Unit’s version, the GP would, like the hospital, be able to opt out of DHA control and make his own arrangements with hospitals for the treatment of his patients. The patient would therefore be able to choose between a GP who held his own budget or one who worked under the DHA. At first, this idea struck me as too radical, but it worried me that we seemed, under Treasury pressure, to be moving away from, rather than towards, radical reforms.
At the end of July 1988 I made the difficult decision to replace John Moore on the review. I took this opportunity to split the unwieldy DHSS into separate Health and Social Security departments, leaving John in charge of the latter and bringing in Ken Clarke as Health Secretary. There can no question that John had made a very important contribution to the review. The idea of money following the patient, the distinction between buyers and providers and the concept of self-governing hospitals all emerged in the review during his period as Secretary of State. Also he had pushed hard for tax reliefs, which Ken Clarke would not have done. As he was to demonstrate during the short period in which he was my Secretary of State for Education (when he publicly discounted my advocacy of education vouchers), Ken Clarke was a firm believer in state provision. But whatever the philosophical differences between us, Ken’s appointment was a useful one. His arrival at