The government published the white paper Working for patients in January 1989. The white paper proposed some of the most significant reforms in the history of the NHS. The two main objectives of the white paper were:
- to give patients better healthcare and greater choice
- to generate greater satisfaction and reward for those working in the NHS who managed to successfully respond to local needs and preferences.
The government wants to raise the performance of all hospitals and GP practices to that of the best. The main question it has addressed in its review of the NHS has been how best to achieve that. It is convinced that it can be done only by delegating responsibility as closely as possible to where healthcare is delivered to the patient – predominately to the GP and the local hospitals … The best run services are those in which local staff are given responsibility for responding to local needs. (Working for patients 1989)
The white paper proposed seven key measures:
- 1. Functions were to be delegated to a local level.
- 2. Hospitals would be allowed to apply for self-governing status as NHS hospital trusts. Trusts would earn revenue from the services they provided thereby giving them a greater incentive to attract patients. Trusts would also be able to set the rates of pay for their own staff and borrow money to respond to demand.
- 3. Money would follow the patient across administrative boundaries, with health authorities being able to obtain services from NHS hospitals outside their area or from the private sector.
- 4. An additional 100 consultant posts would be created over three years (the posts were in addition to the planned 2% annual expansion in consultant numbers).
- 5. Large GP practices would be able to apply for their own budgets to procure services directly from hospitals.
- 6. Regional, district and family practitioner management bodies would be reduced in size and reformed into more businesslike organisations with executive and non-executive directors.
- 7. There would be more rigorous audits of service quality and value for money.
The white paper was also positive about the role the private sector could play, citing its competitive tendering exercise for ancillary services as having been a success. The government suggested that there was scope for wider use of competitive tendering beyond non-clinical services, and health authorities were expected to consider private providers as part of their purchasing role.
'The National Health Service at its best is without equal ... The National Health Service will continue to be available to all regardless of income, and to be financed mainly out of general taxation. But a major task now faces us: to bring all parts of the National Health Service up to the very high standard of the best, while maintaining the principles on which it was founded ... We aim to extend patient choice, to delegate responsibility to where the services are provided and to secure the best value for money. All the proposals in this white paper put the needs of patients first.' (Margaret Thatcher in the foreword to Working for patients 1989)
(Margaret Thatcher in the foreword to the 1989 white paper Working for Patients)
The government proposed the establishment of an NHS Policy Board that would determine strategy, objectives and the finances of the NHS and would also set objectives for the NHS Management Executive. The NHS Management Executive would deal with operational matters and would be responsible for managing family practitioner services (FPSs). Regional health authorities (RHAs) and district health authorities (DHAs) were to continue but would be reduced in size and reformed into more businesslike organisations (ie they would be smaller, with executive and non-executive directors, and no longer contain members from interest groups, local authorities and so on). DHAs were expected to delegate operational responsibilities to hospitals wherever possible.
Changes to the funding mechanisms
Prior to the Working for patients reforms, funding allocations to DHAs from RHAs generally reflected historical patterns of service use and did not reflect varying productivity, efficiency or performance. There was also no relationship between the amount of money a DHA was allocated and the number of patients its hospitals were treating, thereby offering limiting incentives for hospitals to take on additional work or to improve productivity.
The government proposed that DHAs should have a duty to purchase the best possible services. This might mean a DHA purchasing services from other DHA hospitals or from the private sector rather than their own hospitals.
The white paper also set out plans for independent audit. The government proposed to give the Audit Commission responsibility for the statutory external audit of NHS organisations in England and Wales. Previously this had been undertaken by health departments. The government was keen to encourage a greater focus on value for money and felt that scrutiny from an external, independent body would be more effective. Working for patients also introduced the concepts of clinical audit in hospitals and in primary care as an intrinsic part of management rather than as a professional ‘add-on’. Money was made available to ease its introduction.
The provisions in the white paper were realised through the National Health Service and Community Care Act 1990.