How much cake is cut for health spending?

Hugh Pym
Health editor
@bbcHughPymon Twitter

image source, Getty Images
image captionWhat share of the cake budget should go on health spending?

The total waiting list for routine surgery in England rising above four million patients for the first time in a decade has focused minds again on whether more money should be invested in the NHS.

A raft of NHS England targets missed again, including waiting times for operations and the A&E four-hour benchmark, led one senior health official to argue that the system was "unsustainable" without enough resources to deliver what the public expected.

New analysis shows that health spending in the UK expressed as a share of national income (GDP) is just above the average for the European Union.

So does that mean the UK is spending enough on the NHS? Or is there still a need for higher funding?

Comparisons between UK healthcare spending and other leading economies in the past have been difficult because of varying definitions.

UK in mid-league

Some countries include elements of what could be considered social care in their published health data. But these differences have been ironed out by the international economic organisation, the OECD.

Using the data compiled by the OECD, the Nuffield Trust think-tank has compiled a European league table for health spending.

It shows that the UK spent 9.8% of GDP on healthcare (including both the NHS and private health) in 2014. This was slightly above the average of 9.7% for the EU 15 (the member states before the new joiners in 2004).

On the face of it, this paints a rosier picture of UK health spending. Previous estimates suggested it was below the European average and that this was one of the main causes of the problems facing the NHS.

The league table has the UK in the middle of the European pack, ahead of countries like Finland, Spain and Italy.

But being mid-table by definition means not being one of the leaders of the pack. The UK figure is below that of three comparable economies - France, Sweden and Germany - which each spend 11.1% of national income on health.

If their political and administrative leaders have all settled on the same level of spending, it is tempting to think there is a case to be made for that share of the cake to be allocated to the nation's health.

Different health systems

The difference between 9.8% and 11.1% may not sound a lot, but in cash terms it amounts to a tidy sum. Should the UK, through its four governments, decide to move up to that higher figure, it would add about £24bn a year to health spending.

That would mean at least a 4p in the pound increase in income tax, or significant alternative tax-raising or cost-saving measures in other departments.

Spending per head of population is another useful gauge.

On this basis, Germany and Switzerland are ahead of France with each spending the equivalent of about £3,700 per person, compared with an approximate £2,850 in the UK.

None of this proves that money is the answer. The case for greater efficiency in the NHS has been consistently made, with its advocates arguing that savings can be made in some areas and reallocated to front line care.

Other leading economies in Europe have insurance-based health systems with a different culture to the NHS. Arguably they are less efficient than the NHS, which topped a recent international health league table compiled by the Commonwealth Fund think-tank.

The authors of the analysis, written as an article for the British Medical Journal, were John Appleby of Nuffield Trust and Ben Gershlick of the Health Foundation. They argue that deciding what to invest is a complex process: "How much we spend on health is a political choice - informed by the preferences of the population and what we can achieve with different levels of spending, determined by the efficiency of the system."

Demands for money for the NHS will continue as winter approaches and the state of the health service rises up the political agenda. Thanks to the OECD and Nuffield, there is now some data to inform that debate.

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