NHS, the failing National Health Service

The recent problems of the National Health Service (NHS) in the UK is well known worldwide.  In December of 2017 the UK government called for a temporary ban on all non-essential surgeries at all NHS hospitals because the systems was suffering from shortages of beds and staff to care for patients.  More than 90% of all patients to the A&E (emergency) rooms waited over four hours before being seen by staff.  Ambulances took too long to reach patients resulting in deaths.  Horror stories of patients dying in the hallways while waiting for treatment.  Some politicians publicly criticized social media for bad-mouthing the NHS saying the bad publicity could spell the end of the NHS.  Serious shortages in resources (i.e money) also resulted in the NHS now charging for certain services that were previously free.  Thousands of protesters took to the streets in February 2018 to call for the government to fix the NHS and raise taxes.

For every £1 pound spent by the government in the UK, 30p (30%) of it is spent on the NHS and healthcare.  The NHS is a generic term used for the nationalized health system for the UK, Wales, Scotland and N Ireland.  When the NHS was launched in 1948 it had a budget of £437 million (roughly £9 billion at today’s prices). In 2008/9 it received over 10 times that amount (more than £100 billion). In 1955/6 health spending was 11.2% of the public services budget. In 2015/6 it was 29.7%. This equates to an average rise in spending over the full 60-year period of about 4% a year once inflation has been taken into account. Under the Blair government spending levels increased by around 6% a year on average. Since 2010 spending growth has been constrained to just over 1% a year.

President Trump tweeted that national health schemes are bad mentioning the NHS as an example much to the consternation of NHS supporters.  To be fair, the NHS and the US healthcare regimes function in very different ways so it is not a good comparison to put the two side by side.  The NHS runs a system centered around key hospitals geographically located around the UK and there are local council operated healthcare systems meant to supplement the more critical NHS services with localized care facilities.  Private hospitals and private insurance exists in the UK for those who can afford it.  Most insurance in the US despite Obamacare is still privately funded with Medicare and Medicaid providing a large portion of coverage for the under-insured.  In the US, the equivalent to the NHS would be the very badly run Veterans Administration (VA) hospitals completely funded and operated by the Federal government.  There are similar horror stories of veterans dying while waiting for treatment and poorly qualified doctors, administrators, and staff mismanaging the system.

In terms of spending comparison, the US in 2017 spent approximately 18% of its GDP on healthcare while the UK spent around 10%.  In terms of per-capita spending as measured in US dollars, the US far outspends the UK with an average per capital spend in 2014 of $9,829 while the UK spent $4,129.  However, healthcare funding in the US consists of a large variety of sources in funding to include individual, business, private insurance companies, and government programs.  In the UK, taxes pay for the majority of healthcare money spent.  The interpretation of these facts could be the the US overspends on healthcare or that the UK underspends on the NHS.  However, the answer would not be to simply raise taxes in the UK as the danger of overtaxing business could result in another recession and result in even less money available to the NHS.

If one were to waive a magic wand and fix the one thing that plagues industrialized countries on healthcare is that of rising costs and inefficiencies in the system.