Is the NHS really too expensive?

I am, unsurprisingly, a fan of our National Health Service and think it is something we should be proud of. It is the one truly egalitarian institution we have, where anyone, regardless of ability, can access healthcare free at the point of use. It therefore surprises me when I see so many people criticising it and being outraged at the fact that their taxes go towards an institution which they either do not really use, or which they think is awful when they do use it. It is criticised for being too expensive and inefficient, which in many cases in politics, is code for “it costs too much money”. But how you put a price on saving a life, I do not know. Yes it may not be perfect, but when you are serving the whole country on a limited budget can you really expect it to be? And even if you do not use it at all often, I’m sure many pay for insurance such as for the home and for the Car which is never claimed on, and the NHS is no different, it is afterall subsidised by National Insurance contributions so there is protection when/if treatment is ever needed.

I have seen suggestions regarding alternatives to our model of healthcare which, as it is claimed, are cheaper and more efficient. Being open-minded, I decided to look up some of the different models of healthcare found worldwide and see if they are cheaper than our NHS. I have chosen to look at the US, the Netherlands and Japan because they offer 3 different models of healthcare and are the countries I often seen suggested on various social media types as alternatives to the UKs system.

US
The most obvious place for comparison to start is in the US. The US requires people to buy health insurance which is mainly supplied by private insurers, and it is common to have medical insurance as part of employer-sponsored plans. There is some public provision for those on low incomes, the elderly, the disabled and children, however there is little choice for those that do not qualify for public provision and cannot afford private insurance.
Despite not having a universal healthcare system the US has one of the, if not the, most expensive healthcare systems in the world spending around $7960 per capita (2009).

Netherlands

I have seen many people, who are in support of a privatised system of healthcare, suggest the Private Compulsory Medical Insurance model as found in the Netherlands. This is very different to that of the US, as this is compulsory – i.e all citizens are obligated to have it. Insurance is provided by private companies (both for and non-profit) which compete for business. This system however is far from the utopian ideal of free marketeers as, although it is privately provided, it is tightly regulated by the Government, and therefore insurers have to provide minimum coverage at a regulated price and cannot discriminate against who they insure. The Government also subsidises insurers for clients that have pre-existing conditions, and those on a low-income can apply for a healthcare allowance from the tax authorities. Healthcare spending in the Netherlands in 2009 was $5751 per capita.

Japan
Healthcare in Japan is both universal and compulsory and, similar to the Netherlands, all citizens are required to have health insurance. Unlike the Netherlands however all the insurers are not-for-profit and insurance companies do not compete. Those who cannot afford insurance receive government assistance. Japan is considered one of the best performing countries in regards to healthcare and coverage comes at a very low-cost. In 2009 Japan spent $3754 per capita on healthcare, less than half of what the US spent.

UK
As mentioned the UK has a universal healthcare system which is free to all citizens at the point of use. It is paid for out of National Insurance contributions, therefore instead of seeking a private insurance company, the state acts as one on the citizens’ behalf. Private healthcare is also an option for those that can afford it and has the bonus of shorter waiting times. Those that do opt for private insurance still have access to NHS facilities but do not receive any reduced National Insurance contributions. Those with private insurance are often still treated in NHS hospitals by doctors that work within the NHS. In 2009 the UK spent $3440 per capita, the lowest value of all four systems discussed.

More Stats

Country Total exp. as % of GDP Govt exp. on Healthcare as % total govt. exp. Life Expectancy Infant Mortality
(per 1000 live births)
US 17.9 22.4 79 9
Netherlands 11.9 18.5 81 7
Japan 9.5 18.4 83 5
UK 9.6 16 80 8
Physicians
(Per 10,000 pop)
Nurses/Midwives
(per 10,000 pop)
Hospital Beds
(per 10,000 pop)
24.2 90.2 30
28.6 1.5 47
21.4 41.4 137
27.4 101.3 33

(All stats are from the World Health Organisation, World Health Statistics 2012 http://www.who.int/gho/publications/world_health_statistics/2012/en/index.html)

As these statistics show, the UK spends a smaller percentage of GDP on healthcare than both the US and the Netherlands and spends (practically) the same as Japan. As a percentage of total government expenditure the UK spends less than all three.

Why then do many claim that our health system is too expensive, and alternatives are cheaper? As the figures show there appears to be little evidence to support these claims. Are arguments for a change to the NHS therefore purely ideological? I have seen arguments from some (mainly those on the right) that claim that private compulsory healthcare such as in the Netherlands is cheaper, yet the figures suggest that in such systems the government spends more, so in what sense are they cheaper?
Another argument for change I often see is “more competition will drive down costs and improve standards”, however as these figures show a system whereby all companies are non-for-profit and cannot compete is cheaper (Japan) than that where competition is permitted (Netherlands). As Japan also have one of the longest life expectancies, and their healthcare is one of the best in the world, perhaps if our system was to change it should be more in line with that rather than a private compulsory one.

The NHS in the UK also fairs well when it comes to the number of Physicians and Nurses(+Midwifery staff) it has in comparison to the others, although its hospital bed count is not so great. However, considering the UK spends less as a % of GDP and of its total expenditure on Healthcare it is fair to say that it is not doing too badly in comparison. If anything it is leaving me to wonder how much the UK system could be improved if spending was increased in line with spending of the other countries listed above. Perhaps then, the key to more efficiency and an improved service quality is actually more spending, rather than less.

Obviously there are problems with each of these healthcare systems, none of them are perfect and even in Japan, one of the better systems, there are complaints of long waiting times and poor emergency service provision. I believe therefore that we should stick with our NHS and if any change is needed I would suggest it needs more money, not less money put in to it. If alternatives were cheaper, efficient and universal I would be in full support of changing the whole system, however the figures just do not seem to support this. If anyone can show me otherwise then I do welcome comments, but for now I will continue to be proud and in full support of our NHS.

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3 thoughts on “Is the NHS really too expensive?

  1. Wow this is a really great comparison, it certainly has improved my own understanding of our own system and how other systems work around the world. I generally trust your figures, and do not necessarily intent to follow them up, but is it possible that you could offer some information on the sources you have used?

  2. Thank you, I appreciate the feedback. And yeah sure, I only really used one source to get the figures. There is a link to it just underneath the table (but atm I am changing the layout so the link isn’t as obvious). All the information is from the World Health Organisation, World Health statistics 2012 http://www.who.int/gho/publications/world_health_statistics/2012/en/index.html

    The figures they list in that 2012 document are 2009/2010 figures, but theyre the most up to date I could find.

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