How New Labour succeeded with NHS policy

When Ian Weir died in June 1999, his death had an impact that was felt way beyond the circle of his family and colleagues. An award-winning photo­grapher on the Northern Echo newspaper in Darlington, Weir was just 38 years old and a father of two. He was diabetic, and had suffered a serious heart attack the previous November, after which he discovered he would have to undergo a triple heart bypass.

He had already spent seven agonising months waiting, wondering whether he would live. The day after he collapsed at home and died, he had been due to have his first meeting with Simon Kendall, the cardiac surgeon who was to operate on him at the South Cleveland Hospital in Middlesbrough. Weir, who was known for his infectious, ­booming laugh, had been hoping to be given a date for the procedure.

Such, however, was the state of Britain’s National Health Service at the time that even after seven months of waiting, his surgeon says that he “would have had to tell him that he would still have had to wait several months more for the operation, if not a year”. The hospital had a waiting list of more than 600 for cardiac surgery. Many were waiting more than 12 months. “We simply had to prioritise,” Kendall says. Although Weir was plainly unwell and at risk, both his symptoms and his test results were “not too bad”, he recalls. “There was nothing to identify him as someone who should be moved further up the waiting list.”

Ian Weir was not alone. Kendall says that in 1999, the heart surgeons in Middlesbrough used to tell their patients, brutally but honestly, that they had a 5 per cent chance of dying while on the waiting list. Around that time one study estimated that 500 ­cardiac patients a year were dying like that in the UK. “Losing a patient in that way was always a blow,” Kendall says. But Weir’s death in particular struck home. “He was young. He was the same age as me.”

Such deaths were merely the direst manifestation of what had long been the NHS’s chronic disease: waiting. Waiting for an outpatient appointment, waiting again for diagnostic tests, waiting yet again for the final surgery or treatment for conditions classified as non-urgent. In the month Weir died, 150,000 patients were waiting more than more six months just to get to their first outpatient appointment – for an assessment of whether they needed a replacement hip or knee, or cataract surgery, or treatment for a whole range of less painful or ­disabling conditions.

No one was even measuring what could then be an equally long, or longer, wait for diagnostic tests such as scans and ultrasounds that were needed to decide upon treatment. And once they were completed, the subsequent average wait for an operation was almost five months. In England alone, 60,000 patients, all their diagnostic work done, were then waiting more than a year for their surgery.

Every year the NHS operates on millions of waiting list patients. So those facing extremely long waits were in a minority. But they still made up a shamefully long, miserable, tail of patients for whom treatment could be more than two years away – all the while losing sight, suffering pain, in some cases at risk of their lives.

Today, the NHS remains far from perfect. But save for a few thousand patients waiting for orthopaedics and a few hundred waiting for neurosurgery – where there is a worldwide shortage of surgeons – no one in England need wait more than 18 weeks from seeing their GP to their treatment starting. Half of all those needing inpatient surgery are treated within eight weeks. For procedures that do not need a hospital admission, half are seen within four weeks.

Kendall’s own waiting list is now a mere 20 patients long. “Urgent cases can be seen within days,” he says. And while in 1999 there was a real dilemma of whether to spend £10,000 going private – it bought better odds of survival, Kendall says – now, in most of the country, “private cardiac surgery is a thing of the past”. It is, he says, “a transformation”.

As the election draws near, there is a palpable sense of the current Labour government having fallen into decay. Many of the brightest hopes reflected in that rosy dawn of Blair’s first day in Downing Street in 1997 – “an end to boom and bust”, the promise that followed of “a more equal society” – have dimmed or been dashed. Primary school results initially improved fast, but have since plateaued. Child poverty has been reduced, but by nowhere near the degree needed to halve it in a decade, as pledged. The number of young people not participating in education, employment or training refuses to decline. And, even putting aside the question of the economy, there have been some spectacular policy and delivery failures: Individual Learning Accounts that had to be scrapped amid widespread fraud; big IT projects that have crashed and burned. The list goes on.

But the reduction of NHS waiting times was a policy that worked. Why did it work? How? The answers to those ­questions might shed light on how best the next government – whether Labour, Tory or hung – can deliver on promises now being made.

This is where Ian Weir’s death comes back into the ­picture. The Northern Echo photographer had a friend in government: Alan Milburn, the MP for Darlington. “I knew him well,” Milburn says. “It was not just that he covered a lot of my constituency work, but he was a big Labour supporter. He used to do all the photographs for my Labour party newsletters and so forth. So he was a friend.

“When he dropped down dead, it really did shock me. He was a lovely guy.”

At the time of Weir’s death, Milburn was chief secretary to the Treasury, with only a limited say over what was happening at health. “But it’s funny how things turn out,” Milburn says. “A few months later I was back at health as secretary of state, and the very first big policy decision I had to make was on the national service framework for heart disease.”

The frameworks were documents setting out the best way to organise services. “The draft they showed me said that we should have a target to get the maximum wait for treatment down to 12 months. And I said, ‘You must be effing joking, what’s the European average?’” The department told him the maximum wait elsewhere was about three months. “My reaction was, ‘If 12 months is the height of our ambition by 2005, or whatever it was, you can go away and think again.’”

The department’s caution was perhaps understandable. Labour had begun to increase spending on the cash-strapped NHS in 1999. But Tony Blair had yet to make his famous commitment to get NHS spending up to the EU average. Resources were still constrained. An over-ambitious target might be unachievable. Milburn, however, was insistent. “It wasn’t just that someone I had cared about had died,” ­Milburn says. “It was just wrong.” So a tougher target – a maximum three-month wait – was set.

If money was still a problem in 1999, that would soon change. Blair had by this stage complained publicly of “the scars on my back” from trying to reform public services. Health ministers openly declared that the NHS was still too much organised for the convenience of the staff, rather than the patients. While spending had begun to rise in 1999, it appeared to be producing little or no extra activity.

And amid a winter crisis that saw one hospital storing bodies in a freezer lorry because its mortuary was full, ­Milburn had become convinced that without a big increase in NHS expenditure – one that stemmed the staff’s endless complaints about lack of money – a genuine modernisation of the way the service operated was not possible.

He went to work on Blair and on Gordon Brown, the chancellor. Blair was keener than Brown. In January 2000, on a Sunday morning TV programme, the prime minister made his famous – and more or less impromptu – commitment to raise NHS spending to the EU average. Brown had been bounced – and he was furious, reportedly complaining to Blair that “you’ve stolen my fucking Budget”. But in the March he delivered, providing the first chunk of extra money needed to make a start on the spending goal.

With the money secured, a grand NHS Plan was launched that summer. It came littered with targets. These included the promise of no more than a four-hour wait in accident and emergency, no more than a three-month wait for an outpatient appointment by 2005, and no more than six months for an inpatient operation by the same date, with the goal of still shorter waits by 2008.

What helped make waiting times so central to the plan was polling that the department undertook in the run-up to the NHS Plan launch that showed waiting was the public’s number-one concern. “What really struck me,” says Milburn, “is that for the public, waiting was the thing. They were suffering it and wanted it changed. But when we polled the staff it wasn’t.” In fact, it ranked only seventh out of the 10 most important changes the staff wanted to see.

“The [people working in the NHS] had just got used to it,” said Milburn. “And for some, frankly, it had become something to shelter behind – ‘We’ve got this very long waiting list, so give us more money,’ the implication being that we shouldn’t give it to those who had actually got their waiting lists down.” But if the target was clear, “it was only over time that we developed a process, a science so to speak, to get us there”.

What followed was a set of policies that continued to evolve. It started with what Carol Propper, professor of economics at Imperial College, London, has dubbed “targets and terror” – and something the health department prefers to characterise as “help and hassle”. Following Labour’s initial success with its literacy and numeracy strategy – an approach that saw the education department spelling out to teachers how and when to teach in these areas – Blair had created a “delivery unit” in Number 10. Its purpose was to drive through his key public sector reforms, not just for health, but for education, crime and transport. The unit tracked progress on waiting times almost daily. Blair himself held monthly meetings with Milburn to take stock of progress on that and a few other key priorities, such as cancer mortality.

Milburn and his successors in turn hassled the department’s civil servants and the department hassled hospital chief executives. Some of these were getting weekly phone calls from the government; when they struggled to redesign services to cut waits, specialist teams were assigned to help them.

Along with what Gwyn Bevan, professor of management science at the London School of Economics, has called this “brutal” performance management went public “naming and shaming” of hospitals that were failing to cut their waiting times. Slow progress contributed to a “zero” in the annual star rating of hospital performance. “It was relentless focus,” ­Milburn says. “The prime minister holding me to account, the delivery unit holding the department to account, me holding the department to account and the department holding chief executives to account – with the NHS knowing that this was the absolute top priority, because people were ­suffering and dying.”

Among hospital chief executives, the waiting time goals became known as “P45 targets”: those who failed to meet them, or fiddled their figures, got fired. “No one ever got fired if they were trying hard, and any amount of effort went in to help,” says Duncan Selbie, the soft-spoken Scot whose voice, as the health department’s director of performance, was often the one that chief executives heard down the line. “But for the first time in the NHS there was a clear line of sight from the prime minister down to the chief executives on the frontline, and, again for the first time, there were consequences.”

By the summer of 2001, however, while the very longest waits were beginning to be eliminated, it appeared that all the extra cash pouring into the NHS was still not producing a big increase in activity – in the number of patients who were being seen and treated.

Labour’s “command and control” approach to running the NHS from Whitehall – which applied not just to waiting times, but to hospital cleaning and much else – appeared to be running out of road. At two separate meetings – one held by Milburn at health, and one held in Downing Street by Blair – the realisation dawned that other mechanisms were needed, ones that gave hospitals and the rest of the NHS incentives, not just orders from above, to improve.

For Labour, this was a remarkable U-turn. It had come into office in 1997 pledged to “abolish” the previous Conservative government’s so-called NHS internal market – one that separated the purchasing of healthcare from its provision, and which had begun, tentatively, to use the private sector. In Scotland, the internal market was indeed abolished. In ­England, while bits of it were dismantled, in practice much of it was put in the freezer and left unused for Labour’s first four years, as ministers tried to run the NHS from Whitehall by fiat.

So while “targets and terror” continued, what emerged over the succeeding months and years was a clutch of more ­market-like mechanisms, a range of incentives and penalties, that in many ways picked up where the Conservatives had left off – aiming to make the NHS a more self-improving organisation. Instead of hospitals being given block contracts to treat patients, they began to be paid per treatment – so that those that did more finally got more money for the extra work.

Then came competition and choice. This involved introducing privately run surgical units, known as independent sector treatment centres, to treat NHS patients. They ­provided not just extra capacity but a degree of competition for NHS hospitals – and at the same time undercutting the high prices existing private hospitals were charging the NHS for help in cutting waiting lists.

Foundation trusts were created – free-standing hospitals no longer directly answerable to Whitehall and run more like businesses, responsible for their own fate. And finally, patients were given the right to choose where they were treated – ­initially within the NHS, but then at any private hospital ­prepared to take them at the NHS price. After a very slow start, the numbers of people taking advantage of this right has begun to grow.

Much of this was and remains deeply unpopular within parts of the NHS. Even now, as another general election looms, the doctors’ trade union the British Medical ­Association is running a campaign attacking the resulting “commercialisation” of the NHS, and the idea that private companies should make profits out of healthcare.

It was none too popular with some of Labour’s backbenchers either. But for the most part, Milburn and his successors did not need legislation. They could simply do it. And with Blair committed to a more market-like approach to reforming public services more generally, they did. The one change for which health ministers did need legislation – the creation of foundation trusts – produced one of the biggest backbench rebellions of Blair’s time.

So which of these myriad initiatives made the difference and finally got waiting times down to the point where they are now, the shortest in the NHS’s 60-year ­history? The money – “billions and billions of it”, as Milburn puts it – clearly helped. Since 1997, spending on the NHS has doubled in real terms to more than £100bn in England alone. The extra cash has gone to many NHS services – family doctors, mental health, emergency and urgent admissions to name just a few – not to mention pay rises all round. It is impossible to work out how much went specifically on waiting list surgery, which grabs the headlines but in fact accounts for only about 10 to 12 per cent of all NHS expenditure.

But money alone would not have produced the reductions in waiting times now seen, Milburn says. “It was not the staff’s ­priority,” he underlines. “Without the targets it would not have happened.” The evidence for that view – and for the fact that “targets and terror” worked – is that waiting times have fallen far faster in England than in Wales and Scotland. Both the celtic nations got the same increases in NHS spending as England. All three adopted waiting time targets. But only in England were they accompanied by fierce performance ­management and “naming and shaming”.

How far competition and choice – which the Scots and Welsh have also eschewed – made the difference is more a matter of dispute. The number of NHS operations carried out by the independent sector treatment centres and private hospitals is tiny compared with the NHS’s own activity – perhaps 5 per cent of all waiting list surgery. John Appleby, chief economist at the King’s Fund health think-tank, says he can detect no effect from the introduction of competition and choice on the downward trajectory of waiting times. “That doesn’t mean that the decline would have continued without their ­introduction,” he says, “but we can’t detect the effect.”

The most recent work, however, by academics at the ­London School of Economics and Bristol University, does suggest that competition between hospitals may improve the quality of care. And those close to the process of getting waiting times down are convinced of the significance of the ­policy. “Choice and competition – or rather the fear of it, the fear that hospitals would lose patients – was important, and remains important,” according to Duncan Selbie, the department’s former performance director and now chief executive of the Brighton and Sussex University Hospitals.

There are plenty of anecdotes to back up this view. Mike Parish, chief executive of Care UK, one of the independent sector treatment centre providers, recalls a conversation with an NHS hospital chief. “I asked him why his activity and productivity had gone up. ‘Well,’ he said, ‘we don’t want one of those bloody ISTCs on our doorstep.’ And there wasn’t one planned within 50 miles.”

Furthermore, Milburn, Selbie and others all came to ­realise that Labour’s original approach of command and control could only get ministers and the NHS so far. “You can’t run a whole system like that,” ­Milburn says. “It is impossible. You have to empower the ­people on the service frontline, and the citizen and consumer. And that applies outside health as well. You have to find the incentives – choice and competition, payment by results, responsibility for the fate of your own ­organisation – that ­liberate managers and clinicians to run self-improving ­organisations. You have to cut the ties that bind.

“You need a self-denying ordinance that sets limits on what politicians think they can do,” continues Milburn, “and finds ways of incentivising what local managers and staff can in fact do. You have to give power away – and if you are a politician that is really hard. Power is really hard to give away.”

So what might the lessons be for a future government from the war on waiting? First – and despite the Conservatives’ pledge to scrap them – targets do have a role, though a limited one. “You can only have two or three of them,” Selbie says. “If you have 50 or 400 such priorities, and at times we have had that in the past, in reality you have none.”

Second, a journey needs completing that began more than 20 years ago, when the previous Conservative government hit upon some of the quasi-market levers that Milburn now extols – using purchaser/provider splits, making public sector organisations more free-standing, making money follow patients, pupils and citizens and even giving it to them to spend, while ensuring that all providers, whether or not state-owned, have to compete, at least at the margins.

Third, whenever possible, don’t put all the eggs in one policy basket. Waiting times came down as a result of a number of initiatives, including some that were tried and abandoned, such as sending patients to France. “It is better to try several approaches and have several small failures rather than one big one,” says David Halpern, director of research at the ­Institute for Government, who, as chief analyst in Tony Blair’s strategy unit, saw policies both fail and succeed.

He gives an example from primary schools. “The literacy and numeracy strategy did produce good early results in primary schools. But for literacy, [the government] bet the bank on one way of doing it at a time when there was evidence to show that some other approaches were more effective. A compare-and-contrast approach would have taken longer. It might not have been so immediately effective. But it might have been much more effective in the long run. That, however, requires patience, which is something politicians tend to lack.”

And finally, forget the prejudices acquired in opposition. For example, the Conservatives have ridden the wave of professional revulsion against targets – and not just those in the NHS – to the point where they say they will scrap them all. Labour bitterly opposed the Tory market reforms to public services in the 1980s and 1990s, but – after four wasted years – came to adopt and adapt them. Whitehall is littered with policy failures. But it also has a fair number of unsung successes. Go back and examine them. Forget your prejudices, and learn from the experience.

Nicholas Timmins is the FT’s public policy editor. For more on New Labour policies, click here

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