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I am aware that empirical evidence, no matter how everwhelming, can never be conclusive. In particular, advocates of socialized medicine are likely to argue that given a little more money a satisfactory service can be achieved.

This argument is not, however, borne out by examination of the facts of the British experience. Gross expenditure on the NHS has risen steadily from £500 million in 1951-equal to approximately £1,750 million in 1973 terms—to £3,000 million in 1973 very nearly double. Over that period waiting lists have slowly grown and even the strongest advocates of socialized medicine could not argue that standards of service and of staff morale have done other than deteriorated.

A most important question to be considered by those embarking on a comprehensive national health care experiment is whether or not the experiment can be discontinued if it proves unsatisfactory. A few weeks ago Enoch Powell, a former British Minister of Health, speaking to the delegation of U.S. Congressmen and doctors already mentioned, stated that in his opinion the nationalization of the means of delivery of health care is an irreversible measure. After 4 years unremitting labor on the development of proposals for a hospital independent of the state in Britain I understand only too well what Mr. Powell means. If in the last analysis I do not agree with Mr. Powell's pessimistic assessment, my own experiences do lead me to concede that denationalization of medicine cannot be achieved without a severe struggle.

The ramifications of a nationalized health service spread widely and bind tightly within the body politic and economic. The state comes to be intimately involved in every aspect of life from before the cradle in genetic counseling, contraception, and abortion, to beyond the grave,

, with the advent of transplant surgery. Each aspect of state-directed solicitude has its own Government department, and a massive bureaucracy is built up to manage the service.

Moreover, after a generation of state-provided health care, it is almost impossible for doctors and patients, politicians and institutions, to think in terms of any other than a state system as is reflected in this rather complacent statement from the "Newsam Report on Family Doctors' Service in the NHS,” published in 1959. He said, “Fifty years hence, what is happening today and what may happen tomorrow in the NHS will seem to have been inevitable." 3

Turning briefly to the theoretical basis of the case for delivery of medical care by the state, this rests upon one or both of two basic assumptions discussed in my earlier paper; namely, that centralized planning is superior to individual decision in the managing of personal resources and requirements and, or alternatively, that the state is capable of creating resources in excess of the aggregate generated by individuals.

The first of these assumptions cannot be supported by an objective assessment of the historical record or an examination of the performance of currently nationalized concerns the world over.

The second of these assumptions-namely, that the state is capable of creating resources in excess of the aggregate generated by indi

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1 Compendium of Health Care Statistics-Offices of Health Economics 1975, pp. 2–3.

2 Department of Health and Social Security--Health and Personal Social Services Statistics for England (with summary tables for Great Britain) 1974, tahle IV, p. 66.

3 “Newsam Report,” British Medical Journal Supplement, Jan. 17, 1959, p. 19.

viduals—is self-evidently false. It is, however, very widely held. It is epitomized by such statements as "only the Government can afford to build hospitals nowadays" and "medical care is so expensive today that the ordinary person cannot be expected to pay for it himself.":

We are touching here on the myth of the state as "miraculous provider," the delusion which lies at the root of the inflationary disease. As I believe one American politician put it some 20 years ago, "People must learn to see that the money they get from Washington is the money they send to Washington, less freight charges both ways."

Centralized state planning is certainly not a new phenomenon. It had its periods of sway if not favor in the ancient world, and in more recent times examples are provided by the Prussia of Frederick the Great, and France under Louis XIV. In our own century, Italy and Germany in the 1930's provide unhappy examples, and it is not unfair to note that those regimes in ther infancy were applauded and regarded as models by “progressives” in my own country, many of whom were to become the architects of Britain's own welfare state. As late as 1936, Stafford Cripps, our first postwar Chancellor of the Exchequer, was able to say that he “did not believe it would be a bad thing for the British working class if Germany defeated us.” 1

These are some of the antecedents of the present-day cult of centralized planning. Despite a bad past history and discouraging current evidence, one still and increasingly hears it argued that the complexity of modern living makes centralized planning inevitable. Few things are inevitable, and social phenomena are not naturally so, but thinking so can make them so, and this is what we are up against.

Probably everyone in this room is well aware that bigger does not necessarily mean better, and that in human affairs it nearly always means worse, and centralized state planning is the biggest of big planning. However, state planning does have some advantages. It relieves many individuals from the responsibility of decisionmaking, but it also relieves them from the possibility of making decisions; and it not only enables, but makes inevitable, the imposition of decisions of others upon them. It relieves many individuals of the responsibility for provision for themselves and their families, but it also relieves them of the resources to make such provision if they so wish.

A few days ago I was talking to a British politician with special knowledge of the NHS, about private provision for medical care. He said, “You realize that any reintroduction of a free enterprise system would impose a great burden of accountancy on both patients and doctors.” I agreed, and happily.

It is precisely this absence of personal accountability, this obliteration of microeconomics by centralized macroeconomics, that lies at the root of our current economic distress not only in our system of medical care, but in our country as a whole. We now not only don't look after the pence, we can't get the figures into focus until we reach the millions.

I believe that in Britain the disorder in our system of delivery of medical care epitomizes the disorder within our society as a whole. Just over a quarter century ago we embarked upon a great social experiment of importance not only to ourselves, but to the rest of the

1 Maurice Cowling, “The Impact of Hitler-British Politics and British Policy 1938-40,” p. 215.

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world and generations yet unborn. The National Health Service formed part

of that experiment. Few could have foreseen the result. Notable exceptions were Hayek in his "Road to Serfdom" and Joseph Schumpeter in “Socialism, Capitalism, and Democracy.” It is in the nature of experiments that no one could have forecast the result with absolute certainty, but that whole experiment which was launched with the very highest of ideals has seriously eroded both our personal liberty and our viability as an independent nation.

Jefferson wrote over 150 years ago that "the ground of liberty must be gained by inches." I would like to add a rider: "It is lost by yards that look like millimeters." In Britain today, the yards that have been lost are becoming apparent and nowhere more clearly than in our system of delivery of health care.

Of course, we have not in Great Britain reached the stage of development in our state-run system of health care attained in Soviet Russia where, for instance, psychiatry is exploited for political ends. But where a state monopoly in medicine exists and medicine is regarded as "an instrument of social policy,” this becomes a possibility.

I submit that the only guarantee of safety for both the general public and the medical profession is the development and maintenance of a strong, creative, and truly independent medical service in which medicine is, as it should be, a healing relationship between individuals rather than an interaction between a population and the state.

I am aware that the problems involved are massive. In Britain the halting and the reversal of the collectivist momentum is, I believe, going to involve us in the greatest struggle in our nation's history; but all our history indicates that that struggle not only must take place, but that it will in the end be successful.

A few weeks ago a leader in the Wall Street Journal concluded, "Goodbye, Great Britain, it was nice knowing you. I have a feeling that we may meet again because we are traveling down the same road."

I agree, but with a difference. We shall meet again, but we shall have turned, and together we shall lead the way out.

Mr. ROSTENKOWSKI. Thank you, Dr. Gammon.
Mr. Lejeune.



Mr. LEJEUNE. Gentlemen, I think we may start with an undeniable proposition, that there is something wrong with the National Health Service in Britain. I don't think we would find anybody to dissent from that.

As Dr. Walpole Lewin, the chairman of the Council of the British Medical Association asked recently:

What other business would budget £148 million for the Health Service in 1948, spending more than £3,000 million a generation later, and still be nowhere near getting a comprehensive service?

Despite this huge budget, the National Health Service is chronically short of money. This is a phenomenon which needs explanation.

The doctors and nurses are underpaid. Some casualty departments have been closed for lack of staff, so you may arrive at the hospital and find that the casualty staff isn't there. You will have to go to another hospital.

The number of doctors seeking to emigrate from Britain continues to increase. It is something like 2,000 a year, and now constitutes a significant proportion of the entire medical work force. The National Health Service survives at all only because there is an inflow of doctors from India and Pakistan, and from other countries as well; and they are of varying quality, because the idea is to suck out of Britain the best doctors and bring in the best doctors—doctors whose training is frequently unknown and unnoticeable to British hospitals.

Meanwhile, as Dr. Gammon told you, the number of patients who take out private medical insurance in order to pay for private health service treatment when they are sick continues to increase. The number of individuals that do this is falling off simply because of the erosion of disposable income by income taxation and inflation.

I think a statistic worth noting is that those that take out private hospital insurance include more than 10,000 doctors-nearly a third of all doctors in Britain—and they should know what they are doing:

It is worth noticing also that anybody who takes out private medical insurance is paying twice, since he still has to pay for the National Health Service, and he gets no tax relief on his insurance premiums.

The National Health Service patients may have to wait up to 4 year's for non-urgent operations. Official figures show that 37 percent wait more than a year, and nearly 20 percent more than 2 years. They are dubious statistics because they are district by district, but nonetheless they are alarming in themselves.

The question then arises whether these defects, as they patently are, are for any reason peculiar to Britain and the British system or whether they would be inherent in any scheme of socialized medicine?

They are, I believe, certainly inherent in any scheme of this kind, which purports to offer all medical services completely free at the time of use. When the NHS was set up, it was expected that after an alleged backlog of needed care had been caught up, the demand for medical services, therefore, would diminish. That is what its founders expected. Of course, as we know, what actually happened was precisely the opposite. It increased and is increasing indefinitely, both the demand and the cost.

It is not the least surprising. The demand for any desired thing-naturally health care is desired-at nil cost is literally unlimited. But the available supply of medical services cannot in any community be unlimited.

Because people believe that they have already paid—through taxation and weekly national insurance stamps-for the health service, they feel entitled to get as much as they can from it, and to some extent they are obliged to do so because if they don't use it, the tax appropriation wouldn't diminish. Therefore, they want to get value for their money spent. This reflects in their attitude to their doctor and the change in their attitude—there is a certain degree of truculence, certainly the feeling that he owes them a service. The change in attitude must reciprocably affect that relationship-not in every case, but in a significant proportion.

Since this unlimited demand cannot be fully met by necessarily limited services, some form of rationing has to be introduced. There are no ration coupons. Rationing is done another way. Delays, long waiting lists, perfunctory consultations, lack of choice of doctor these are a form of rationing.

There are certainly very scarce facilities, such as single rooms, bedside telephones, and the attention of senior doctors for relatively minor ailments, which inevitably, though this is usually denied, go first to politically important people. This tendency must increase, in Britain no less than in the Soviet Union, if private facilities become unavailable. Commissars are not to be found in public wards.

Under our system of socialized medicine, free at the point of demand, not only is the demand artificially increased as I have explained, but the supply at the same time is artificially diminished.

As we know, and as Dr. Murley will tell you in detail, I think, a large proportion of the GNP of Britain is spent on medical care despite our National Health Service, more than in the United States. I think I had better leave Dr. Murley to give you the figure. I believe it to be 5 percent of the British GNP as compared with your 8 percent.

The reason for this is not difficult to see. It is because under any system of socialized medicine people are not deciding for themselves how much of their own resources they want to spend on their own and their families' health. Were they to do so, were there to be this direct relationship between allocation of resources and benefits, there is little doubt that they will choose to spend more than they do, but they don't, of course, choose to have more of their resources taken away and spread around indeterminantly.

Simultaneously, because the State makes provision of a sort, the supply of voluntary and charitable donations also to a great extent dries

up. This has been a major cause of the delay in the renewal of Britain's hospitals.

Also, a great deal of money is unnecessarily consumed by the administrative superstructure entailed in any State monopoly. Much time, including much doctors' time, is spent on the bureaucracy of it all.

Most importantly, the politicians who again in any system of socialized medicine are the ultimate paymasters, have to allocate money from the public purse, are faced with innumerable rival demands for the limited services available. Pressed by all sides for claimants for public money, they will never, never allocate to medicine as much money as from an objective point of view might be desirable or as much money as individuals would be spending on their own health (care.

To save money as costs rise, they will start to impose restrictions on what doctors, dentists, and hospital administrators are allowed to spend money on and, therefore, are allowed to do.

Doctors in Britain have so far largely retained their freedom to prescribe as they wish, but some items-spectacles and cosmetic dentistryhave been kept at a shoddy utilitarian level, but this trend will continue as costs of drugs and equipment rises.

Now, it has been suggested that in order to minimize the problem, the political element in the allocation of resources, the money might be channeled through some relatively independent body, similar to the University Grants Committee. But the analogy is only too relevant. As spending on universities increased, the University Grants Committee came under more and more political pressure, and this was suggested when the NHS was set up. But that is only too relevant an example, because we have seen the problems on universities increased

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