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In the past 50 years, spending on the NHS in the United Kingdom has increased from 3.4 per cent to 8.2 per cent of gross domestic product (GDP). If the next 50 years follow the same trajectory, the United Kingdom could be spending nearly one-fifth of its entire GDP on the public provision of health and social care.
This report considers the drivers of spending on health and long-term care, and asks whether spending must or should consume such large proportions of GDP in the future, and the fiscal feasibility of this.
It examines the evidence that spending will inexorably rise, considers projections and high-level modelling of future health spending both in the United Kingdom and internationally, and debates alternative systems of assessing current and future spending.
Finally, the report suggests a need for engaged and informed public debate about the choices to be made in future spending on health and social care.
Key findings
The NHS currently takes around 8.2 per cent of GDP, and according to the Office for Budget Responsibility (2012) could account for between 7.8 per cent and 16.6 per cent of GDP by 2061.
Spending on long-term care in 2061 could range from 1.5–2.5 per cent of GDP.
Spending on health and social care should not be seen solely as a debit or a burden: higher spending can improve the population’s health, wellbeing and quality of life, as well as having wider positive impacts on economic activity and productivity.
The key drivers affecting potential spending on health and long-term care include changes in population size and structure, growth in national wealth, increases in the costs of providing care, and developments in medical technology. The ageing of the population, however, is of much less importance than is generally supposed.
Policy implications
Regular projections should be undertaken to assess the scale and sustainability of future spending on health and social care. In addition to the annual projections by the Office for Budget Responsibility, a more detailed investigation should be carried out periodically, including, for example, projections at a disease level.
Economic sustainability of increased spending must be considered in terms of both consequences and options available.
As spending rises, diminishing returns are likely to set in.
Engaging the public in a detailed debate about their preferences for future spending is crucial. Possible trade-offs with other government spending should be quantified, and proposals should demonstrate their possible impact on tax and borrowing.
Video summary
John Appleby takes a closer look at how spending on the provision of health and social care in England may change in the next 50 years. Drawing on findings from his new report, Spending on health and social care over the next 50 years: why think long term?, he asks whether spending must or should consume such large proportions of GDP in the future, and the fiscal feasibility of this.