-
Analysis of 22
countries reveals tax-funded healthcare
systems are cheaper and have lower admin
costs
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The best way to fix the NHS is
change the way money is spent, not the funding model, says
IPPR
-
Health secretary to discuss findings
in major speech at Institute for Public Policy
Research report
launch (Monday)
A major new IPPR report
finds that there is no evidence that insurance-based
healthcare systems out-perform tax-funded
systems.
The analysis – spanning 22 high-income
countries – concludes that switching the NHS to a
European-style insurance system would not improve performance
across measures of capacity, access,
quality, efficiency and
equity.
The report says that health
system outcomes vary far more within funding models than between
them. However, new research finds that tax-funded
systems have some key advantages,
including:
-
They are cheaper for
patients: people in the UK spend 2.6
per cent of household income on out-of-pocket health costs,
compared to 3.5 per cent for those in insurance systems
-
They have lower admin
costs: administrative costs consume 2.2 per cent
of health spending in tax-funded systems compared to 3.5 per
cent in insurance systems
The authors of the report also
point out the high risks of transitioning from one system to
another, saying any such move could cost
billions and potentially take
decades.
The findings undermine
claims that social health insurance systems such as those in
France or Germany are inherently superior. The think
tank warns that politicians risk pursuing costly
distractions instead of addressing the real causes of the health
service's decline.
Instead, the report says the real
reason for the NHS's poor performance against
comparator countries is partly driven by chronic
underinvestment.
While the NHS has received record
funding, its increase in spending in recent
years has predominantly been focused
on staff, salaries, and other costs that have risen due
to inflation.
Spending on capital investment
– including beds, diagnostic equipment, and
infrastructure like buildings – remains lower than
it was in 2010. Spend on capital was 0.358 per cent of
GDP in 2023, down from 0.395 per cent in 2010. This
is roughly half the average of our
comparators.
The think tank says that
the government can turn the NHS around, but only if
they:
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Prioritise capital
investment, such
as spending on the crumbling NHS estate and
diagnostic equipment
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Move care out of hospitals
and into the community, to focus on prevention and public
health
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Tackle the social
care crisis, to
reduce preventable admissions and poor post-discharge
outcomes
, secretary of state for health, will address
questions raised by the report in a keynote speech at IPPR's
launch event today (Monday).
Sebastian Rees, head of
health at IPPR, said:
“There is no structural silver
bullet for the NHS. The idea that simply switching to a
European-style insurance model would fix its problems
is a pointless distraction and not supported
by the evidence.
“The NHS's challenges are real –
but they are the result of a decade of
chronic underinvestment and choices on how money is
spent, not the funding model
itself.
“Policymakers should focus on what
actually works: investing in infrastructure, strengthening
primary care, and tackling the drivers of poor
health.”
Lord , former health minister,
said:
“The social insurance systems of
France, Germany, and the Netherlands are regularly invoked as
superior alternatives, with little scrutiny on what those
systems actually deliver or what it would take to
replicate them here. There is no systematic evidence that
social health insurance models outperform tax-funded
systems.”
ENDS
NOTES TO
EDITORS
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1. The IPPR
paper, Bismarck
versus Beveridge revisited: does the model shape the
outcome? by Sebastian Rees, Avnee Morjaria, Harry
Quilter-Pinner and Emma Norris, will be published
at 0001 on Monday April 13. It will be available for
download at: https://www.ippr.org/articles/bismarck-versus-beveridge-revisited
