Comparing spending on health care between countries is not straightforward. We have to consider how to deal with differences in the source of funding: public or private (which will include out-of-pocket spending as well as insurance payments, often compulsory in countries with social insurance systems). Given differences in the way countries fund their health care it is usual to compare total spending (public plus private) expressed as a proportion of countries’ GDP.
On this basis, data from the OECD shows that in 2013 (the latest year for which figures have been published) the UK spent 8.5 per cent of its GDP on public and private health care. (This excludes capital spending equivalent to 0.3 per cent of GDP to make figures comparable with other countries’.) This placed the UK 13th out of the original 15 countries of the EU and 1.7 percentage points lower than the EU-14's level (ie, treating the whole of the EU-14 (ie, minus the UK) as one country with one GDP and one total spend on health care) of 10.1 per cent of total GDP. (Note: the difference of 1.7ppts is rounded).
If we were to close this gap solely by increasing NHS spending (and assuming that health spending in other UK countries was in line with the 2015 Spending Review plans for England), by 2020/21 it would take an increase of 30 per cent – £43 billion – in real terms to match the EU-15 weighted average spend in 2013, taking total NHS spending to £185 billion.
Whether funded publicly or privately, spending more on health will necessarily mean less on other things – either less private disposable income (if the additional money comes from additional taxation) or less on other publicly funded services such as education or defence – or indeed, paying down the UK’s debt and reducing its deficit. Historically, increases in NHS spending have in the main been achieved by reduced spending on other public services (such as defence) rather than say borrowing or tax increases per se.
Whatever the flaws of international comparisons, it’s clear the UK is currently a relatively low spender on health care – as the Barker Commission pointed out – with a prospect of sinking further down the international league tables. The question is increasingly not so much whether it is sustainable to spend more – after all, many countries already manage that and have done for decades. Rather, it is whether it is sustainable for our spending to remain so comparatively low, given the improvements in the quality of care and outcomes we want and expect from our health services.