Thatcher Targets British Health System

LONDON —  With plans for sweeping changes in Britain’s free health system, Prime Minister Margaret Thatcher’s free-market revolution has reached a national institution as sacrosanct as the royal family.

After years of increasing spending on an ever-more costly ideal of free and equal treatment for all 56 million Britons, Thatcher recently announced the most radical shake-up of the National Health Service since its foundation 40 years ago.

The health service will remain free to the customers. But the prime minister’s plan is to create an “internal market” in state medicine by 1991, with a price on everything from aspirin to a heart transplant. Doctors and hospitals will compete for state-funded fees.

The 320 biggest hospitals will be able to become self-governing, setting individual pay scales and wooing private and state patients. Patients over age 60, the biggest burden on the state health service, will get tax breaks for having private insurance.

“The National Health Service will continue to be available to all, regardless of income, and to be financed mainly out of general taxation,” said Thatcher. “We aim to extend patient choice . . . and to secure the best value for money.”

The system Thatcher envisions is a far cry from the mainly private U.S. system, widely perceived in Britain as a recipe for greed and wastefulness and one that dumps the poor and chronically ill in substandard public hospitals.

But critics on the left charge that her proposals are the first step down a favorite Thatcher road: privatization.

In the nearly 10 years since Thatcher won power, her front-line targets have been the bureaucracies and the vested interests of the left.

Through it all, the National Health Service, with 1 million employees treating 30 million people a year, kept growing. The cost has soared by a third to $37.8 billion since 1979--always trailing demands for ever-more expensive drugs and sophisticated surgery.

Every working Briton has to pay 10% of his salary toward the state health and pension plan, and 90% of the people--not including Thatcher--use the state service as opposed to private doctors and hospitals.

Most Britons suspect that Thatcher would like to dismantle the system, the cornerstone of the welfare state.

The prime minister ordered the review of the health system a year ago in an effort to break the cycle of spending money and earning political criticism from a service in which children die waiting for heart surgery and nurses are driven to pay strikes.

The new proposals are virtually certain of implementation because of Thatcher’s big majority in Parliament.

The opposition Labor Party said the plan reflects a Conservative Party government that “will always put a healthy balance sheet before healthy patients.”

The country’s major health union calls it a “charter . . . (for) a commercial circus,” and the doctors’ organization, the British Medical Assn., also expressed doubts.

The government says the plan will increase efficiency and cut waiting lists.

“I don’t want the health service run as a business,” argued Health Secretary Kenneth Clarke, on a nationwide tour to sell the plan. “I just want it to be more businesslike.”

This means taking a closer look at the performances of family doctors and consultants.

Consultants, who get about $87,500 a year from the health service, will be monitored on whether they are neglecting state commitments to treat private patients.

Salaries of the 32,500 state-employed general practitioners, now earning an average $47,000 a year more or less irrespective of competence, will be more closely related to the number of patients on their books.

Big practices will get budgets to buy hospital treatment at the best price. Doctors will be fined for prescribing drugs too readily.