An NHS revelation: Good care costs money


As the Liberal Democrats and Conservatives spend their time vying to be the saviour of the NHS, it is easy to forget the prominent role that the level of funding has played in debates on the NHS in recent years. Following yet another winter crisis, Tony Blair’s pledge in early 2000 to bring NHS spending up to the European average marked the beginning of a period of increased spending on public services. Equally, Andrew Lansley’s pledge to continue to deliver real terms increases in expenditure played a key role in defusing Labour allegations that the Conservatives could not be trusted on health, even if it won him few friends in his own party at the time.

Bizarrely – and particularly given the £20 billion saving challenge facing the NHS – the level of expenditure on health has slipped down the political agenda. It was therefore intriguing to see a research paper slip out from the House of Commons Library last week comparing international levels of expenditure on health. The paper provides a useful snapshot on how health expenditure in the UK compares with other OECD and EU countries, and begs the question about the links between expenditure and outcomes.  

Regardless of the ongoing debate over whether the international comparisons in health outcomes used by the Department of Health are valid, it would be difficult to argue that there are not areas where the UK is lagging behind other countries.  The House of Commons paper offers one potential explanation for this.  The UK has average outcomes and broadly average expenditure: the UK is ranked 16th out of 34 OECD countries in terms of total health expenditure per capita, and sits at 17th when it comes to total health expenditure as a proportion of GDP. 

The rule is of course not hard and fast: the USA has by far the highest level of expenditure (which intriguingly includes similar levels of government expenditure to the UK), but distinctly average outcomes. Nor is there a clear link between activity and expenditure. For example, when you look at levels of drug usage, there is no clear correlation. Spain is a relatively high user of drugs but has comparatively low levels of expenditure per capita whereas Norway spends high levels per capita but is a relatively low user of drugs. However, broadly speaking, the message is clear: you get what you pay for.

Unfortunately this might not be the answer that any political party wants to hear.  Given that the NHS has been protected from the worst impact of cuts in public spending, it is difficult to detect a political will to increase spending on health (irrespective of whether you believe that the Government is not meeting its pledge to deliver a real terms increase in spending, given the impact of higher than expected inflation). Although there are undoubtedly efficiencies that can be found in the health service, politicians may have to face the uncomfortable truth that delivering the desired improvements in outcomes might cost more than they have budgeted for.