Abstracts: January 5th, 2005

NHS improvements are being bought at huge and unnecessary cost. A report from Reform warns that by 2010, the NHS will cost up to £20 billion more than it should for its level of performance. The report contrasts two approaches to health policy: reform, meaning incentives aimed at increasing value from existing spending, and funding, which simply increases resources.Since the publication of its original NHS Plan in 2000, the Government has often presented funding and reform as being simultaneous and complementary. In reality, however, funding has come before reform.

In the 2002 and 2004 Budgets, the Government pledged to increase health expenditure by 7.4 per cent a year in real terms between 2002-03 and 2007-08. The Department of Health’s estimate is that health spending will be 9.5 per cent of GDP in 2007-08. If health spending were to continue at the same rate of growth for two further years it would be over 10.5 per cent of GDP in 2010. At that level, health spending would be well above the European average and more than 50 per cent higher than the GDP shares of Scandinavia and New Zealand. On a worldwide basis the public sector share of spending would be the highest of any system.

The report is available at http://www.reform.co.uk/