Britain's National Health Service is in Critical Condition

Last month, CNN asked ‘Why is Britain’s health service, a much-loved national treasure, falling apart?’:

Britain’s National Health Service (NHS) might be experiencing a particularly acute episode this winter, but its ailments are not new. ‘The NHS winter crisis explained,’ wrote the Guardian in 2000. A decade later it warned: ‘Hospital bed crisis ‘could leave neediest patients untreated‘. The policies of the present government may or may not make the malady worse, but such long standing problems indicate a more fundamental sickness.

The NHS is old. It was founded in 1948 to provide healthcare to all ‘free at the point of use’ funded by a payroll tax – National Insurance – and general taxation. But Britons, too, have grown old. In 1950, 21% of Britons were aged over 55; the figure is now 32%. In addition, the NHS now has to provide an array of treatments which its founders could scarcely have imagined. Demand for healthcare in Britain has become both more extensive and more intensive.

But while Britain has changed, the NHS has not, it has simply expanded. In the mid-1950s, the NHS cost 2% of GDP; that had risen to 10.2% on the eve of the COVID-19 pandemic. OECD data show that Britain has one of the highest rates among rich countries of Government/compulsory health spending as a share of GDP. The NHS is the fifth biggest employer on earth.

Yet, even with all these resources – and aside from the current crisis – the NHS is failing. As Kristian Niemietz notes:

The NHS simply isn’t very good at turning its inputs into outputs. OECD data show Britain ranks near the bottom among rich countries for the number of hospital beds per 1,000 people. And, while the NHS ranks high on the number of hospital staff per 1,000 of the population, it ranks much lower when we look at just the number doctors and nurses.

The NHS is suffering in acute form from the problems that are dooming other programs like state pensions. Implemented in an era when there were many more young people paying for them relative to older people using them, they become unsustainable as that relative number of young people falls. And the situation is only going to become more acute. According to the Office for Budget Responsibility, Britain’s fiscal watchdog, government spending on the NHS will rise even further, to 13.8%, by 2067.

The NHS requires radical surgery. Indeed, it is doubtful that it can survive in its present form. But it remains, like Social Security in the United States, the ‘third rail’ of politics. Nigel Lawson, Margaret Thatcher’s former finance minister, famously said: “The NHS is the closest thing the English people have now to a religion”. In 2018 it polled better than the queen. When President Trump criticized the system in 2018, the Conservative government leapt to its defense.

But the NHS won’t be healed by faith. The point of health care is to improve the health of the population and the NHS fails to do that relative to other systems, several of which require fewer inputs to generate superior outputs. The NHS does not require more resources but needs to use the resources it has more productively. And Britons should be prepared to countenance the possibility that the NHS simply cannot achieve that. We Brits need to be less sentimental and recognize that the NHS is simply a tool meant to achieve an end – improved health – and is not an end in itself. In the clash between sentiment and fiscal reality, fiscal reality – ultimately – wins every time.