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13 reasons to spend more on health and social care

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Speaking at the Health Policy Summit 2017, Prof John Appleby outlines his reasons for investing more in the NHS.

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13 reasons to spend more on health and social care

  1. 1. John Appleby, Director of Research and Chief Economist, The Nuffield Trust 13 reasons to spend more on health and social care
  2. 2. 3% 52% Marks and Spencer John Lewis British busines Houses of Parliament Oxfam BBC Team GB Royal Family Armed Forces NHS 1… because we love it! 2 Q: What makes Britain great? A: The NHS! We may love the NHS, but is this really a good enough reason to spend more on it? Perhaps it’s precisely the things we don’t think make Britain great which need more money (education?) to make us proud of them?
  3. 3. 0 10 20 30 40 50 60 70 80 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Percent NHS Economy Immigration 2… because we’re worried about the NHS 3 The NHS: Top British bother
  4. 4. 3… because we’re getting richer 4 As we earn more, we spend more on the NHS The past may be a guide to the future… but then again… And in any case, compared to other countries the UK seems to be spending about as much as you’d expect given its GDP0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 0 500,000 1,000,000 1,500,000 2,000,000 UKNHSspendas%ofUKGDP UK GDP, 2010 prices (£ millions) 1970 2015
  5. 5. 4… because it’s a vote winner 5 Governments have protected NHS spending On the other hand, these real increases were way behind what the NHS reckoned it needed to cope with increasing demand.-50 -40 -30 -20 -10 0 10 20 30 Work and Pensions Justice Busines Culture, Media and Sport Enviroment, Food, and Rural Affairs Home Office Defence Education Cabinet Office Health Transport International development Percentage real change in funding 2010/11 to 2019/20
  6. 6. 5… because we need to 6 The UK’s population of over 75-year-olds will increase by nearly 75% over the next 20 years On the other hand, while older people may be big users of the NHS, the average future 75 year old is likely to be healthier than the current 75 year old and hence need less health care. 5.4 9.3 UK population aged over 75 (millions)
  7. 7. 6… because it costs more 7 The prices of things the NHS buys tend to rise faster than inflation generally Higher NHS-specific inflation may have been a feature in the past, but not so much recently -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 1975-76 1980-81 1985-86 1990-91 1995-96 2000-01 2005-06 2010-11 NHSinflationminusRPI(percentagepoints difference) NHS inflation higher than the RPI NHS inflation lower than the RPI
  8. 8. 7… because it’s difficult to improve productivity 8 Less bangs per buck in the NHS than the rest of the economy? In fact, the NHS has managed to improve its productivity over time, and since 2002, average increases have matched other sectors of the UK economy (although partly due to the impact of the 2008 recession on productivity in the economy). 90 95 100 105 110 115 120 125 130 135 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Indexofproductivitygrowth(1995=100) All market sectors in the economy UK NHS
  9. 9. 8… because we’re short of doctors 9 The UK lags behind many countries in the number of practising doctors Another way of looking at these numbers is that we get by with fewer doctors because they are more efficient than their German, Swiss and Norwegian colleagues. 2.22 2.79 5.05 Korea Mexico Poland Japan Canada Slovenia United Kingdom Ireland New Zealand Luxembourg Belgium France Latvia Estonia Hungary Australia Israel Iceland Spain Italy Germany Switzerland Norway Austria Practising physicians per 1000 population
  10. 10. 15% 10% 5% 0% Luxembourg United Kingdom Italy Greece Spain Finland Portugal Ireland Austria Belgium Denmark Germany France Netherlands Sweden 20 -3% 2% 7% 12% Luxembourg Greece Portugal Italy Spain Finland United Kingdom Ireland Austria Belgium Denmark Netherlands Germany France Sweden 201 4 Public Private 9… because other countries spend more 10 Are we spending less on health care than our European neighbours? But when we started comparing our spending on a more like-for-like basis (in 2014) our health spending jumped compared to 2012 so that it’s about average compared to countries we consider our peers (such as the old EU-14 countries). Health spend as a percent of GDP 8.5% 6.7% 10.9% 10.9% 6.3% 9.9% 2012 2014
  11. 11. 10… because it contributes to the economy 11 (Days off) Sick of not funding the NHS properly? There is a multiplier effect of health and care spending, but whether this is the most cost effective way of boosting the economy is doubtful.0 20 40 60 80 100 120 140 160 180 200 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Dayslostthroughsicknessabsence(millions)
  12. 12. 11… because lives could be saved 12 Good news: Deaths that could have been avoided through better health care have fallen. Bad news: they’ve started to rise recently… Of course my life (and yours) is worth everything. Yet, as individuals we take decisions every day (getting out of bed, crossing a busy road...) that implicitly place a finite (and actually quite small) value on our lives. Why should governments take a contrary view? 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 0 50 100 150 200 250 300 350 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Avoidabledeaths Avoidabledeathsper100,000population
  13. 13. 8% 38% Bottom 20% Top 20% Percentageofhouseholdswithprivate medicalinsurance Household income quintile 12… because more spending on private care is inequitable 13 The wealthier you are the more likely you are to have private medical insurance
  14. 14. 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 0 0.5 1 1.5 2 2.5 3 3.5 4 Benefit X X = Point at which we get more benefit by stopping spending on the NHS and spending on something else 'Benefit-spend' curve Total ‘ideal’ spend on the NHS Actual spend on the NHS 13… because we want more care than other things? 14 Spend more on care, get more benefit (but only up to a point) The economist’s approach: good in theory, next to impossible to locate point ‘X’ in practice.
  15. 15. www.nuffieldtrust.org.uk Follow us on Twitter – twitter.com/NuffieldTrust Sign up for our newsletter – www.nuffieldtrust.org.uk/newsletter-signup

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