Healthcare systems, funding and outcomes: international comparisons and experiences

By Lewis Peake

Background

The RCP’s Our Future Health project is exploring some of the major challenges facing the NHS, and the physicians that work within it. A key facet of this work lies in healthcare investment; quite simply, are we spending enough on our healthcare in contrast to other nations? We have already delivered a fascinating webinar, chaired by Professor Martin McKee from the London School of Hygiene and Tropical Medicine, on the issue of NHS finances, that touched on the inevitable international comparisons that questions around health spending generates. More recently, Theresa May has put forward her funding plan for the NHS, committing to a £20.5bn increased budget for NHS England by 20231 which importantly excludes social care and public health.

It can be easy to criticise the NHS and have unrealistic expectations of what it can provide. Since 2016 the RCP has argued that our health service is underfunded, underdoctored and overstretched, but are other systems similarly plagued? Do those deficiencies impact on the high-level health outcomes reported in the UK? One could argue that a publically funded health service, free at the point of care, is open to resource abuse and promotes a lack of personal responsibility for health upon its users that other nations may avoid. The purpose of this article is to provide RCP members with information on spending in other healthcare systems, how exactly they are financed, and the related health outcomes across comparable nations.

Economical comparisons

First, let’s consider how much the UK and other countries spend on ‘health’, and how this translates to variations in areas such as staffing levels, bed numbers and access to healthcare.  It is important to stress the complexity when comparing such headline figures; differences in how nations attribute and report funding allow only for limited, albeit interesting, conclusions.

As an example of this complexity, the amount of money spent on healthcare in this country is reported variably depending on the definition used. Measures can refer to: the money given annually to the Department of Health (therefore England specific, totalling £124bn in 2017)2, the total NHS UK budget (£135bn in 2015)3, or UK wide spending which includes prevention and other services (£150bn in 2013)4. More recently, international comparisons have been based on a modern, universal definition of spending that incorporates many social care functions. Based on this rubric, total healthcare spending in the UK for 2016 was £191bn5, according to the Office for National Statistics.

The UK government is often condemned for spending far less than its European neighbours on healthcare. However, comparisons of spending as a proportion of GDP are more favourable when considering this new definition, with the UK spending in 2015 slightly more than the EU average of 9.7% that year6. Nevertheless, the UK still lags behind the likes of Norway, Netherlands, Canada, France and Germany in its proportionate spending – to meet Germany’s benchmark, the UK would need to spend more than £30bn extra a year.

Percent GDP spent on healthcare (2016 or latest year)

There has been an explosion in healthcare costs since 2000; the UK was spending just 6% of its GDP on health at the turn of the century. Across the OECD, this additional finance has primarily been put towards the care of long term conditions and outpatient services, with a correlating squeeze on capital put towards pharmaceuticals and prevention (a 0.5% and 0.2% reduction in spending respectively, per year)7.

Despite the UK having an average GDP spend within Europe, this does not translate to the availability of ‘resources’ like staffing and hospital beds; the UK has one of the fewest numbers of doctors, nurses and beds per capita amongst Europe, and the OECD at large. A cursory glance would suggest that although the UK’s inpatient bed numbers are in keeping with other nations such as Canada, Denmark and Sweden (Germany and France have more than double the amount of beds), we do not have the same nursing or medical staffing that supports these populations. It seems that, at least with respect to international comparisons, the UK certainly is underdoctored.

At the turn of the 21st century, there was some concern about an excess of trainee doctors in certain specialties, leading to stagnation in medical school places. More recently the UK government agreed to increase these numbers8, to counteract the loss of trainees overseas and into other industries, and mitigate the number set to retire from practice in coming years. The RCP however continues to lobby for a greater increase to meet the rising demand9, and is actively campaigning for a doubling of medical school places.

With respect to the number of inpatient beds, there is a difficult balance between promoting community based care away from the hospital setting by curtailing beds, and having flexibility of access during times of pressure.

Number of doctors, nurses and inpatient hospital beds per 1,000 population (2015)

Health system comparisons

Variations in GPD spending give an incomplete picture; the relative amounts countries spend on healthcare are impacted greatly by the model of funding they use, and its relative cost effectiveness and patient accessibility.

Broadly speaking, there are three categories for how nations finance and deliver their healthcare systems, as described by the King’s Fund10:

  1. General taxation (e.g. UK): government (local or national) collect finances through general taxation, with money used to structure and deliver healthcare services. Providers can either be publically or privately owned.
  2. Private health insurance (e.g. USA): coverage from private providers is ‘bought’ independently or as part of an employer scheme. Personal contributions can vary depending on health risk. Care providers are typically run privately for-profit, with patients and their insurance companies ‘billed’ for usage.
  3. Social/statutory health insurance (e.g. Germany): salary sacrifice, usually matched by employers, is given to cost-neutral independent bodies. This is based on income, not on health risk. Health care providers are then reimbursed by these independent bodies.

Source of healthcare spending by country, 2014

Countries can adopt more than one of these models, and in most systems there are often additional out-of-pocket expenses for covered services (e.g. a co-payment for hospital admissions) or non-covered services (e.g. dental treatment).  These additional expenses can result in unmet care needs, even in countries where there is universal access11; NHS patients may not fill out a prescription because of its cost, or not attend a hospital appointment if they cannot afford transportation. Nevertheless, unmet care needs because of cost are expectedly low in the UK.

Percentage of population (low income) who reported unmet care needs due to cost

The table below briefly profiles how healthcare is provided in some comparable nations.

How healthcare is funded in some comparable nations

Health outcomes

Given the UK’s healthcare spend in comparison to other nations, and its relative lack of doctors, nurses and beds, how does this impact on outcomes? In summary, the United Kingdom performs variably and surprisingly poorly in some areas. As of 2015, the life expectancy at birth for UK males (79.2 years) and females (82.8 years) remains close to the OECD average but, is on the wrong side of that mean (lower than Switzerland, Sweden, Spain, Italy, Ireland, France and Germany, amongst others)23. Life expectancy in Japan was 80.8 years for males and 87.1 years for females in the same year.

Life expectancy in some comparable nations

When exploring the causes of that mortality, the UK still lags behind other comparable health systems in deaths from cancer, although that gap seems to have closed in recent years. In 2015, the UK recorded 222 (280.7 in 1990) cancer deaths per 100,000 population, compared to the OECD average of 204 (250 in 1990)11. There are however many positives – breast and rectal cancer mortality in the UK is better than average, possibly related to high screening rates7.

Total deaths per 100,000 popln: malignant neoplasm

The UK also ranks better than the OECD average in mortality from both ischaemic heart disease and cerebrovascular disease11, which is important considering that cardiovascular disease is the most common cause of mortality in most OECD countries. As with cancer, the UK has experienced a dramatic improvement in mortality rates since 1990 from ischaemic heart disease (a 67% decline), secondary to falling smoking rates and improved access to interventional cardiac procedures7.

Total deaths per 100,000 popln (2013): ischaemic heat disease

Mental health rates can be tricky to compare between nations, due to the reliance on self-reporting and cultural attitudes towards diagnoses such as depression. Suicide rates are therefore sometimes used as a fudged-marker of the impact and availability of mental health services. The age-standardised mortality rate for suicide in the UK was 7.5 per 100,000 population in 2013 (12.2 for men and 3.0 for women), far lower than the OECD average of 12.1 and better than the majority of European countries11.

Total deaths per 100,000 popln (2014 or latest): suicide

The causes for these outlined variances in life expectancy and mortality are numerous, and it would be short-sighted to assume that the way healthcare systems are structured and funded is the sole reason for these differences. Genetics, culture, housing, personal wealth, educational level and countless other factors all impact on health behaviours.

A surprising piece of good news for the UK is its rate of diabetes. When accounting for age, just over 4% of the population between 20 and 79 are thought to have the condition24. This is lower than many comparable nations (For example, 8.3% in Germany). Similarly, the UK ranks well when assessing smoking rates, reporting one of the biggest recent declines in adults who smoke11. In 2005, 27% of the adult population smoked daily, compared to 16.1% in 2016 (with an OECD average of 18.4%). These positive findings are in stark contrast to rates of obesity, with the UK consistently ranked one of the most overweight nations in Europe amongst both adults and children. Just under 63% of British adults are overweight or obese, compared to the OECD average of 54% (note: nations collect this data variably, either as ‘self-reported’ or ‘measured’ obesity), and surely calls into question the rationale behind falling public health spending.

Comparative prevalence of diabetes in 20-79 year olds, 2017

Percentage of over-15's overweight or obese (2015, or latest year)

Percentage of adult population who smoke daily

Conclusion

Our healthcare system is underdoctored, underfunded and overstretched. Many who work within the NHS have thought wishfully of the seemingly better financed healthcare systems of comparable nations such as Germany, Norway and alike, and pondered whether gains could be had from raising the NHS capital.

This is a view that perhaps the British public are also beginning to share. In 2010, at the culmination of the Blair/Brown government’s consistent NHS cash injection, public satisfaction with the service was at its highest level for decades, at 70%25. As of 2017, this has fallen to 57%25. Furthermore, many public polls have shown an appetite for increased taxation if funds were committed solely to the NHS26, 27.

Drawing conclusions between oversimplified funding figures and headline outcome data is perhaps impossible. To what degree can healthcare funding be liable for the perceived health outcomes of a nation? Genetics, diet, culture and a number of other factors play an important part. However, the data presented here adds fuel to the notion that the UK is underdoctored and under-resourced, whilst acknowledging that no healthcare system is prefect. Perhaps the biggest question  facing Theresa May is not how NHS financing should be secured, but where it should be spent to give the greatest impact.

References

  1. https://www.gov.uk/government/speeches/pm-speech-on-the-nhs-18-june-2018
  2. https://www.kingsfund.org.uk/projects/nhs-in-a-nutshell/nhs-budget
  3. https://www.kingsfund.org.uk/blog/2016/01/how-does-nhs-spending-compare-health-spending-internationally
  4. https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthcaresystem/articles/expenditureonhealthcareintheuk/2015-03-26
  5. https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthcaresystem/bulletins/ukhealthaccounts/2016
  6. https://www.nuffieldtrust.org.uk/news-item/spending-on-health-how-does-the-uk-compare-internationally
  7. Health at a glance: How does the UK compare?
  8. https://www.gov.uk/government/consultations/expanding-undergraduate-medical-education
  9. https://www.rcplondon.ac.uk/news/rcp-says-extra-medical-school-places-not-enough-address-current-workforce-gaps
  10. https://www.kingsfund.org.uk/publications/how-health-care-is-funded
  11. Health at a glance 2017.
  12. https://international.commonwealthfund.org/countries/australia/
  13. https://international.commonwealthfund.org/countries/canada/
  14. https://international.commonwealthfund.org/countries/france/
  15. https://international.commonwealthfund.org/countries/germany/
  16. https://international.commonwealthfund.org/countries/italy/
  17. https://international.commonwealthfund.org/countries/netherlands/
  18. https://international.commonwealthfund.org/countries/norway/
  19. https://international.commonwealthfund.org/countries/sweden/
  20. https://international.commonwealthfund.org/countries/switzerland/
  21. https://international.commonwealthfund.org/countries/england/
  22. https://international.commonwealthfund.org/countries/united_states G
  23. Health statistics 2017.
  24. IDF Diabetes Atlas.
  25. https://www.kingsfund.org.uk/publications/public-satisfaction-nhs-2017
  26. https://www.nhsconfed.org/media-centre/2018/06/ipsos-polling
  27. https://www.kingsfund.org.uk/publications/what-does-public-think-about-nhs

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