A major new IPPR report finds that there is no evidence that insurance-based healthcare systems out-perform tax-funded systems.
The analysis – spanning 22 high-income countries – concludes that switching the NHS to a European-style insurance system would not improve performance across measures of capacity, access, quality, efficiency and equity.
The report says that health system outcomes vary far more within funding models than between them. However, new research finds that tax-funded systems have some key advantages, including:
- They are cheaper for patients: people in the UK spend 2.6 per cent of household income on out-of-pocket health costs, compared to 3.5 per cent for those in insurance systems
- They have lower admin costs: administrative costs consume 2.2 per cent of health spending in tax-funded systems compared to 3.5 per cent in insurance systems
The authors of the report also point out the high risks of transitioning from one system to another, saying any such move could cost billions and potentially take decades.
The findings undermine claims that social health insurance systems such as those in France or Germany are inherently superior. The think tank warns that politicians risk pursuing costly distractions instead of addressing the real causes of the health service’s decline.
Instead, the report says the real reason for the NHS’s poor performance against comparator countries is partly driven by chronic underinvestment.
While the NHS has received record funding, its increase in spending in recent years has predominantly been focused on staff, salaries, and other costs that have risen due to inflation.
Date: 19 April