Hospital Financing in Seven Countries (Part 5 of 11)

ntroduced in 1948 by the Labor Party, Britain's National Health Service (NHS) is based on the principle that everyone is entitled to any kind of medical treatment for any condition, free of charge. The NHS is not insurance-based but is funded almost exclusively from general tax revenues. The aggregate NHS budget is fixed every year, based on the previous year's budget and adjusted for inflation estimates and the population's estimated health care needs. The Department of Health allocates the aggregate NHS budget for hospital care to regional and district health authorities who, under the traditional system, were responsible for providing and paying for hospital services; Family Practitioner Committees are responsible for providing primary care for several district populations and receive funding directly from the Department of Health. The third component of the NHS is the personal social services category. Local governments receive payments from district health authorities to provide community based services, including nursing home care, home care for the elderly, and other support services. The United Kingdom's centralized, mostly public, comprehensive health care system was a pioneer of national health care. Currently, however, the NHS is undergoing an important program of reforms, principally announced in the government's 1989 White Paper entitled Working for Patients and enacted as legislation in the NHS and Community Care Act of 1990 (7). The United Kingdom's comprehensive health care reform program, based on concepts of " managed competition, " will result in the most significant changes to the NHS since its creation more than 40 years ago (10). The main elements of the reforms are as follows: s the introduction of contractual funding designed to separate the provider and purchasing roles for health services within I 43