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THE PROPERTY OP H I S
BRITANNIC M A J E S T Y ' S
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GOVERNMENT)
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C P . ( 4 5 ) , , 2 9 8
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8 3 R D NOVEMBER.
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.1945
CABINET
NATIONAL HEALTH. SERVICE
SAhB.AND PURCHASE OP M E D I C A L . P R A C T I C E S
Memorandum, by t h e M i n i s t e r
I propose in this
Service i s established
( i )
( i i )
( i i i )
Paper
­
that
of
Health
when a N a t i o n a l
Health
t h e s a l e and p u r c h a s e of m e d i c a l p r a c t i c e s
(being p r a c t i c e s conducted wholly or p a r t l y
within the public service) should stop;
d o c t o r s "who a r e t h e r e b y d e p r i v e d o f e x i s t i n g
s e l l i n g values should receive compensation
b a s e d on 1 9 3 9 s t a n d a r d s o f p r a c t i c e v a l u e s
a n d p a y a b l e o n l y on t h e d o c t o r ' s d e a t h o r
. r e t i r e m e n t from p r a c t i c e ;
a l l d o c t o r s taking any p a r t in the public
s e r v i c e i n f u t u r e s h o u l d j o i n i n a new
c o n t r i b u t o r y s u p e r a n n u a t i o n scheme,
2.
I a l s o p r o p o s e t h a t , i n o r d e r t o c l e a r u p t h e p r e s e n t
- u n c e r t a i n t y w i t h w h i c h y o u n g d o c t o r s f r o m t h e F o r c e s o r
e l s e w h e r e a r e f a c e d , some a n n o u n c e m e n t of t h e G o v e r n m e n t ' s
g e n e r a l i n t e n t i o n s s h o u l d be made a t o n c e .
3".
The W h i t e P a p e r on t h e N a t i o n a l H e a l t h S e r v i c e
referred
to t h i s question.
I t p r o p o s e d t h a t , i f and where i t s
p r o p o s a l s d e s t r o y e d t h e v a l u e of e x i s t i n g p r a c t i c e s ,
compensation would be paid.
Two p o s s i b l e e x a m p l e s w e r e
given;
t h e f i r s t , w h e r e t h e t a k i n g o v e r o f a p r a c t i c e by a
n e w - c o m e r was p r o h i b i t e d i n a n " o v e r - d o c t o r e d " a r e a ;
the
s e c o n d , where a d o c t o r gave up h i s s e p a r a t e p r a c t i c e t o t a k e
service in a Health Centre.
But i n g e n e r a l , i t was n o t
c o n s i d e r e d t h a t the p r o p o s a l s i n t h e White p a p e r would
t h e m s e l v e s d e s t r o y t h e v a l u e of p r a c t i c e s .
The W h i t e p a p e r
w e n t o n t o r e c o g n i s e t h e c a s e w h i c h c o u l d b e made on m e r i t s
f o r the a b o l i t i o n of t h e whole custom of s a l e and p u r c h a s e ,
in p u b l i c l y remunerated p r a c t i c e s , and suggested d i s c u s s i o n
of t h i s with the profession,
4*
The C o a l i t i o n G o v e r n m e n t made a p u b l i c a n n o u n c e m e n t , o n
3 r d May l a s t , t h a t t h e y d i d n o t p r o p o s e t o a b o l i s h s a l e a n d
purchase at present;
t h a t a n i n q u i r y by a Committee would be
s e t on f o o t a f t e r t h e N a t i o n a l H e a l t h S e r v i c e was i n
o p e r a t i o n and a f t e r experience of i t s working had been
obtained;
t h a t i f , a s a r e s u l t o f t h a t i n q u i r y , t h e s a l e of
p r a c t i c e s s h o u l d he c o n t r o l l e d , p r o p e r c o m p e n s a t i o n would he
paid.
The f u l l t e x t o f t h i s a n n o u n c e m e n t i s a p p e n d e d .
D o c t o r s from t h e F o r c e s and o t h e r s a r e n a t u r a l l y
asking
w h e t h e r t h i s , a n n o u n c e m e n t s t i l l h o l d s good a n d , i f n o t , what
i s the p o s i t i o n .
They a r e e n t i t l e d to an e a r l y a n s w e r .
U n c e r t a i n t y i s a l s o c a u s i n g h a r d s h i p among t h e o l d e r d o c t o r s
who h a v e k p t o n d u r i n g t h e w a r a n d n o w w a n t t o r e t i r e , a n d
a m o n g t h e d e p e n d a n t s o f d o c t o r s who d i e .
5.
On m e r i t s , I a m s u r e t h a t i t i s w r o n g t h a t p u b l i c
medical p r a c t i c e s - p r a c t i c e s or p a r t s of p r a c t i c e s which
depend f o r t h e i r v a l u e on p u b l i c - r e m u n d e r a t i o n u n d e r a
N a t i o n a l H e a l t h S e r v i c e - s h o u l d be b o u g h t and s o l d .
In
s p i t e of t h e f r e e d o m of p a t i e n t s t o c h a n g e t h e i r d o c t o r i n a
p u b l i c s e r v i c e , the custom amounts very n e a r l y to t h e
sale
and p u r c h a s e of p a t i e n t s and t h e r e f o r e of a p u b l i c income.
H o w e v e r much i t may b e m i t i g a t e d b y l o a n s of c h e a p m o n e y o r .
o t h e r w i s e , i t must tend to d e t e r the poorer r e c r u i t
from
professional practice^
It is also particularly unsuitable
to public practice organised in publicly provided Health
Centres.
6,
But - a p a r t from t h e m e r i t s of t h e c u s t o m a s s u c h - a
d i r e c t r e s u l t o f a p r o v i s i o n w h i c h I am s a t i s f i e d m u s t
(for
o t h e r r e a s o n s ) be i n c o r p o r a t e d i n t h e new s e r v i c e w i l l be
t h a t the s e l l i n g v a l u e of a l l xoublicly r e m u n e r a t e d p r a c t i c e s
w i l l be d e s t r o y e d anyway.
The p r o v i s i o n t o w h i c h I r e f e r
is
t h e v e s t i n g of a power i n t h e . M i n i s t e r ( p r o b a b l v a c t i n g
through a s p e c i a l l y a p p o i n t e d p r o f e s s i o n a l body) to approve
or s e l e c t the general p r a c t i t i o n e r to r e p l a c e a p r a c t i t i o n e r
i n t h e p u b l i c s e r v i c e who h a s d i e d o r r e t i r e d .
This
p r o v i s i o n w i l l i n e f f e c t p u t an end to any m a r k e t i n p r a c t i c e s
a f f e c t e d by i t .
7.
I t i s a r g u a b l e t h a t an a c t i o n by t h e S t a t e i n t h e
i n t e r e s t s of t h e community which has i n c i d e n t a l l y d e s t o y r e d
t h e v a l u e of a n e x i s t i n g p r a c t i c e g i v e s r i s e t o no b e t t e r
c l a i m to c o m p e n s a t i o n t h a n many s i m i l a r a c t i o n s which
incidentally destroy the "good-will" attaching to p a r t i c u l a r
businesses.
There a r e , however, s p e c i a l f e a t u r e s i n the
present case.
The d e s t r u c t i o n of v a l u e s w i l l s c a r c e l y b e
"incidental";
i t w i l l be a v e r y d i r e c t r e s u l t of p o s i t i v e
a c t i o n by the Government,
A l s o , i f no c o m p e n s a t i o n were
g i v e n t h e r e w o u l d b e m a n y c a s e s of. h a r d s h i p a m o n g p e o p l e
who h a v e ( q u i t e p r o p e r l y , i n t h e l i g h t o f t h e c u s t o m o f t h e i r
p r o f e s s i o n at the time) incurred considerable l i a b i l i t i e s
in
t h e p u r c h a s e o f p r a c t i c e s , a n d who h a v e a c q u i r e d i n t h e
s e l l i n g v a l u e s of t h e i r p r a c t i c e s t h e i r p r i n c i p a l
insurance
f o r o l d age and f o r t h e i r dependants i n t h e event of death.
There i s a l s o the p r a c t i c a l p o i n t t h a t great h o s t i l i t y would
b e a r o u s e d i n t h e p r o f e s s i o n , a t t h e v e r y t i m e w h e n we w a n t
t h e i r u t m o s t c o - o p e r a t i o n , i f p r a c t i c e v a l u e s were d e s t r o y e d
without compens,ation
Moreover the White Paper has a l r e a d y
f i r m l y c o u p l e d c o m p e n s a t i o n w i t h t h e d e s t r o y i n g of p r a c t i c e
v a l u e s in the d o c t o r s ' minds.
0
8.
I t h i n k t h e r e f o r e , t h a t t h e r e should be compesnation
( a l t h o u g h without a d m i t t i n g an i n h e r e n t r i g h t to i t on the
d o c t o r s ' p a r t ) and I t h i n k t h a t i t should be d e v i s e d b r o a d l y
on t h e b a s i s of r e s t o r i n g what i s d e s t r o y e d by t h e
Government's
action.
The e x a c t b a s i s o f c o m p e n s a t i o n and. i t s m e t h o d s
w i l l need, t o b e d i s c u s s e d w i t h t h e p r o f e s s i o n s s p o k e s m e n
b e f o r e f i n a l d e c i s i o n , h u t I t h i n k t h a t t h e o b j e c t s h o u l d b e
t o s e c u r e t h e i r a g r e e m e n t t o a r r a n g e m e n t s on t h e s e l i n e s : - .
( l )
At a g i v e n d a t e when t h e scheme s t a r t s , t o
a s s e s s t h e v a l u e of p r a c t i c e s t h e n e x i s t i n g
o n t h e b a s i s o f t\he i n c o m e d e r i v e d from t h e m
during the p r e c e d i n g y e a r ,
(*2)
To d i s c o u n t t h e a b n o r m a l c o n d i t i o n s w h i c h h a v e
a f f e c t e d p r a c t i c e v a l u e s s i n c e 1939 by
r e d u c i n g t h e above a s s e s s e d v a l u e s to a
1939 l e v e l , i . e . by a p p l y i n g a r e d u c t i o n
f a c t o r which w i l l t a k e i n t o a c c o u n t r i s e s
i n fees, c a p i t a t i o n payments, e t c . , since
t h a t d a t e , and by t a k i n g f o r p u r p o s e s o f
c a l c u l a t i o n t h e number of y e a r s ' p u r c h a s e ,
normally p a i d i n 1939.
( 3 )
To a r r i v e a t a g l o b a l f i g u r e o f c o m p e n s a t i o n
b y a g g r e g a t i n g a l l t h e r e d u c e d v a l u e s so
arrived, at;
and to i n v i t e t h e medical
p r o f e s s i o n t h e m s e l v e s t o p r o p o s e how t h e
t o t a l s h a l l be e q u i t a b l y a p p o r t i o n e d
between i n d i v i d u a l p r a c t i c e s .
( 4 )
To m a k e p a y m e n t s t o e a c h d o c t o r o n r e t i r e m e n t
( o r to h i s d e p e n d a n t s on d e a t h ) i n a c c o r d a n c e
w i t h t h a t b a s i s of a p p o r t i o n m e n t .
( 5 )
To a l l o w f o r a r e a s o n a b l e r a t e o f i n t e r e s t on
t h e a p p o r t i o n e d c a p i t a l value i n r e s p e c t of
the period elapsing before i t is actually
p a i d t o the doctor or h i s dependants - as
seme r e c o m p e n s e f o r t h e i n t e r e s t on l o a n s
w h i c h h e may h a v e t o c o n t i n u e t o m e e t o r t h e
i n t e r e s t v a l u e o f h i s t i e d - u p m o n e y , so a s t o
reduce any u n f a i r anomaly between d o c t o r and
d o c t o r when a l l r e c e i v e t h e i r r e m u n e r a t i o n a t
t h e same r a t e s i n f u t u r e f r o m p u b l i c f u n d s .
9.
Independently of t h e s e arrangements for compensation,
I p r o p o s e t o t a k e p o w e r t o s e t up a s u p e r a n n u a t i o n scheme
f o r . a l l d o c t o r s t a k i n g p a r t i n t h e new s e r v i c e .
(No
a c c o u n t w o u l d b e t a k e n of p a s t s e r v i c e u n d e r t h e p r e s e n t
n a t i o n a l h e a l t h i n s u r a n c e a r r a n g e m e n t s or o t h e r s e r v i c e
b e f o r e t h e o p e r a t i o n of t h e s u p e r a n n u a t i o n s c h e m e , s i n c e t h e
d o c t o r s concerned would be a d e q u a t e l y compensated i n t h i s
r e s p e c t by t h e s c h e m e s e t o u t a b o v e ) ,
Mere a g a i n t h e
d e t a i l s w i l l r e q u i r e t c b e w o r k e d c u t a t some l e n g t h , i n
c o n s u l t a t i o n with the profession, but the general p r i n c i p l e s
would b e : ­
( i )
( i i )
C o n t r i b u t i o n b y trie d o c t o r s , s u p p l e m e n t e d
by c o n t r i b u t i o n by t h e s t a t e ( s o m e t h i n g
t h e scheme a l r e a d y a p p l i c a b l e t o s c h o o l
equally
like
teachers)
B e n e f i t s t o c o n s i s t o f a p e n s i o n on r e t i r e m e n t and
a l u m p sum p a y m e n t o n r e t i r e m e n t o r d e a t h ,
subject tc orthodox p r o v i s i o n for qualifying
p e r i o d s of c o n t r i b u t i o n ;
w
3­
( i i i )
The s c h e m e t o h e c a p a b l e o f a p p l i c a t i o n , i f
p o s s i b l e , to a wider f i e l d t h a n g e n e r a l p r a c t i c e
and to cover a l l d o c t o r s p a r t i c i p a t i n g i n any
f i e l d o f t h e new s e r v i c e - a n d p r o b a b l y t o b e
c o r r e l a t e d w i t h s i m i l a r schemes f o r o t h e r .
c l a s s e s a n d g r o u p s of e m p l o y e e s i n t h e h e a l t h
service.
10.
I t i s n o t n e c e s s a r y t o d e c i d e now e x a c t l y how t h e s e
t h i n g s s h a l l be d o n e .
I t i s n e c e s s a r y , however, t o , d e c i d e
w h e t h e r t h e y s h a l l b e d o n e a n d t o make some g e n e r a l a n n o u n c e ­
ment y/hich w i l l g i v e a p o i n t e r t o y o u n g d o c t o r s i n d e c i d i n g
w h a t t h e i r c o u r s e ' of a c t i o n s h o u l d b e i n t h e n e x t few m o n t h s .
I f my c o l l e a g u e s a g r e e w i t h my p r o p o s a l s i n p r i n c i p l e I
s h o u l d l i k e t o b e a u t h o r i s e d t o make a n i m m e d i a t e a n n o u n c e m e n t
on t h e f o l l o w i n g l i n e s : ­
(i)
The G o v e r n m e n t h a v e n o y e t f i n a l l y d e c i d e d u p o n t h e
p r o p o s a l s w h i c h they
w i l l be . s u b m i t t i n g t o P a r l i a m e n t f o r a
National Health Service.
(2)
They b e l i e v e , h o w e v e r t h a t i t w i l l be i n c o m p a t i b l e
w i t h t h e p r o v i s i o n of a n e f f i c i e n t s e r v i c e t h a t t h e f u t u r e
e x c h a n g e o f m e d i c a l p r a c t i c e s , a n d t h e c r e a t i o n of n e w
p r a c t i c e s , w i t h i n t h a t s e r v i c e s h o u l d he l e f t e n t i r e l y
u n r e g u l a t e d and t h a t no e f f e c t i v e s t e p s s h o u l d be t a k e n t o
s e c u r e a xoroper d i s t r i b u t i o n o f d o c t o r s t o f i t t h e p u b l i c
need.
(3)
They a p p r e c i a t e t h a t i n t e r v e n t i o n i n t h i s f i e l d ­
i n w h a t e v e r f o r m i t may t a k e - w i l l p r o b a b l y h a v e t h e e f f e c t of p r e v e n t i n g t h e s a l e and p u r c h a s e of t h e p r a c t i c e s o f d o c t o r s t a k i n g a n y p a r t i n t h e new s e r v i c e , and t h e G o v e r n m e n t t h e r e f o r e t h i n k i t r i g h t t o g i v e w a r n i n g of t h i s p r o b a b i l i t y a t o n c e a n d i n a d v a n c e of t h e f o r m u l a t i o n of their full proposals. (4)
A t t h e same t i m e , a n d i n o r d e r t o a l l a y t h e n a t u r a l a n x i e t i e s of d o c t o r s a l r e a d y i n p r a c t i c e o r now c o m i n g i n t o p r a c t i c e from t h e F o r c e s or e l s e w h e r e , t h e Government wish t o make i t c l e a r t h a t t h e r e w i l l b e a n a p p r o p r i a t e m e a s u r e o f c o m p e n s a t i o n t o d o c t o r s i n r e s p e c t of l o s s o f c a p i t a l v a l u e s d i r e c t l y c a u s e d b y t h e new a r r a n g e m e n t s . . I t i s i n t e n d e d t h a t d i s c u s s i o n s s h o u l d be u n d e r t a k e n i m m e d i a t e l y with the p r o f e s s i o n ' s representatives with regard to the s t e p s to be taken to give e f f e c t to t h i s d e c i s i o n . 11.
-When t h i s s t a t e m e n t h a s b e e n m a d e , I w i l l a t o n c e
i n i t i a t e d i s c u s s i o n s with t h e p r o f e s s i o n , not only on the
b a s i s and" m e t h o d o f c o m p e n s a t i o n i n g e n e r a l , b u t a l s o o n
a n y s p e c i a l m e a s u r e s n e c e s s a r y i n t h e i n t e r e s t s o f d o c t o r s -.
a n d t h e i r d e p e n d a n t s who w i s h t o d i s p o s e o f p r a c t i c e s , a n d
n e w c o m e r s who d e s i r e t o e n t e r p r a c t i c e , b e f o r e t h e o p e r a t i o n
of t h e c o m p e n s a t i o n a r r a n g e m e n t s .
I s h a l l suggest to t h e
p r o f e s s i o n t h a t they should themselves take steps to meet
d i f f i c u l t i e s a r i s i n g in t h i s interim period and should
announce a s soon a s p o s s i b l e what they a r e d o i n g .
(Intld.)
M I N I STRY OF HEALTH,
23RD NOVEMBER,
S. W. 1 .
1945.
A.B.
. A F P-E N D I X
COPY OF COALITION GOVERNMENTS ANNQUNOEMENT
g j STOREY:
To a s k t h e M i n i s t e r o f H e a l t h w h e t h e r h e
h a s a n y - s t a t e m e n t t o make o n t h e s a l e a n d p u r c h a s e o f
medical p r a c t i c e s i n r e l a t i o n to the Government's proposals
for a National Health Service.
MR. WILLINK:
Yes, S i r .
The G o v e r n m e n t r e c o g n i s e , a s
i n d i c a t e d i n t h e W h i t e P a p e r , t h a t a c a s e c a n he made f o r
t h e t o t a l a b o l i t i o n of t h e s a l e and p u r c h a s e of p u b l i c l y
r e m u n e r a t e d p r a c t i c e s , and p a r t i c u l a r l y of p r a c t i c e s c o n ­
ducted in publicly provided health centres.
The G o v e r n m e n t a l s o r e c o g n i s e , a s i n d i c a t e d i n t h e
White P a p e r , t h a t t h e a b o l i t i o n would i n v o l v e g r o a t
p r a c t i c a l d i f f i c u l t y and i s not e s s e n t i a l to the i n i t i a t i o n
o f t h e new s e r v i c e .
The Government f e e l t h a t f i r m d e c i s i o n s , d e a l i n g w i t h t h e p r a c t i c a l d i f f i c u l t i e s f a i r l y i n t h e - i n t e r e s t s of a l l c o n c e r n e d i f s a l e and p u r c h a s e wore t o be a b o l i s h e d , c o u l d be r e a c h e d only a f t e r . s o m e e x p e r i e n c e had been gained of t h e w o r k i n g of t h e new s e r v i c e a n d a l l t h e r e l e v a n t f a c t s had been a s c e r t a i n e d . The G o v e r n m e n t do n o t p r o p o s e , t h e r e f o r e , t o make a n y a l t e r a t i o n i n the p r e s e n t custom i n t h e forthcoming Health Services B i l l , but they propose that a f u l l inquiry into t h e whole q u e s t i o n s h a l l be i n s t i t u t e d by a Committee a p p o i n t e d f o r t h a t p u r - p o s e a f t e r t h e new s e r v i c e h a s come i n t o o p e r a t i o n a n d e x p e r i e n c e of i t s w o r k i n g h a s b e e n gained.
Meanwhile, t o remove any p r e s e n t u n c e r t a i n t y , t h e
G o v e r n m e n t w i s h t o make i t c l e a r t h a t , i f t h e s a l e o f
p r a c t i c e s - as a r e s u l t of t h e i n q u i r y I have mentioned ­
s h o u l d be a b o l i s h e d or r e s t r i c t e d by law, d o c t o r s a f f e c t e d
w o u l d r e c e i v e a l l p r o p e r c o m p e n s a t i o n , on t h e u n d e r s t a n d i n g ,
o f c o u r s e , t h a t ( a s i n d i c a t e d i n t h e W h i t e P a p e r ) t h e new
s e r v i c e could, n o t be a l l o w e d , by i t s e l f i n c r e a s i n g v a l u e s ,
t o i n c r e a s e t h e amount of c o m p e n s a t i o n p a y a b l e .
The G o v e r n m e n t a l s o r e c o g n i s e t h a t , p e n d i n g t h e
i n q u i r y , many d o c t o r s w i l l b o r e t u r n i n g f r o m t h e F o r c e s a n d
e n t e r i n g new c i v i l p r a c t i c e s u n d e r t h e e x i s t i n g c o n d i t i o n s
of p r a c t i c e e x c h a n g e .
T h e y a r e a n x i o u s t h a t t h e s e men a n d
women s h a l l n o t .be p r e v e n t e d o r d i s c o u r a g e d f r o m , d o i n g s o
by i n a b i l i t y t o f i n d p u r c h a s e money, and t h e y a r e d i s c u s s i n g
w i t h t h e P r o f e s s i o n , how t h i s c a n b e s t b e s e c u r e d .
Non-oral
Answer
3 r d May, 191+5