A report by the Institute for Fiscal Studies and the Health Foundation has found that UK spending on health as a proportion of GDP is lower than in similar EU economies, and will need to increase if quality of care is to be maintained.
The report found that UK spending, at 9.5% of national income, was just below the EU15 average of 10.2% when weighting spending by GDP for each country. This was markedly below the figure for larger EU economies such as Germany (11.3%) and France (11.0%) and far below the US at 17.2%. Despite the fact 51% of US health spending is through private channels, the US still publicly spends a larger share of its national income on health (8.5%) through care programmes for the elderly (Medicare) and for low-income people (Medicaid) than the UK (7.7%). If the UK wanted to spend the same proportion of national income on health as Germany in the next year, it would have to spend more than an additional £30 billion.
In order to simply maintain current levels of service, an average annual growth in health spending of 3.3 per cent would be required for the next 15 years, whilst a slightly larger increase of 4% would be needed to address immediate funding requirements.
According to the IFS, “the choice is almost certainly whether to pay more tax, or lower our expectations about the services the NHS can provide.”