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Viewpoint: Thatcher began Cameron's bid to privatise the NHS
By Dr Kailash Chand, 09 April 2013
The Cameron/Lansley NHS reforms, to privatise the NHS, are the biggest in its history.
In terms of scale that may be true, but in terms of their direction of travel, that was set 25 years
ago by the NHS review announced by Margaret Thatcher in 1988.
She brought in the concept of the internal market and fundholding in the NHS. This was thanks
to the Griffiths report which suggested that the NHS should be run like a supermarket to
increase efficiency and effectiveness.
Instead of meeting patient needs, trusts would be run in competition with each other for
patients, undermining the very founding principles of the health service.
The central aim of the reforms was to produce a more cost-effective NHS.
The National Health Service and Community Act of 1990 was the proposed solution.
It reformed both management and patient care by introducing an 'internal market'.
Its big idea was the creation of a market within the NHS so that some parts of the organisation
would become providers selling their services to the others, the purchasers.
This separation of purchaser from provider - the purchaser/provider split - was the key feature.
The result was that the entire NHS started fragmenting, with each hospital in competition with
the others. Primary and secondary care were put in an adversarial position.
Under Margaret Thatcher, the government encouraged people to use private medical services
(The Health Service Act 1980 being the first step). Her government showed recurrent
interest in health insurance but this was played down for electoral reasons.
Tax concessions for private insurance were introduced, there were frequent rises
in prescription charges and the contracting out of support services to the private sector
was enforced.
Administration costs in the NHS in 1979 were around 6% - after the introduction of the
internal market these had doubled to 12%.