Diagnosis: Overrated: An Analysis of the Structural Flaws in the NHS

The NHS is falling well below its potential. Even the current unsatisfactory standard of healthcare is not financially sustainable, yet policymakers are often unwilling to challenge what has become a sacrosanct institution. The debate around healthcare needs to move beyond platitudes about the future of the NHS. Too often poor cancer survival rates and other quality measures are ignored, whilst the experiences of countries with much better outcomes, such as those with social insurance systems on continental Europe, are dismissed.

NHS has many structural flaws the demographic timebomb – the NHS is financed on a pure pay-as-you-go basis; all current expenditure is paid out of current revenue, without any old-age reserves. Against the backdrop of an ageing population, this leaves British healthcare highly vulnerable to demographic changes. If NHS productivity remains the same as it has been for two decades, spending will have to rise by nearly 15% of GDP by 2063, and future generations will face huge tax hikes. The funding structure is also flawed – free at the point of use provision has stymied pressure to harness technological innovations for cost-cutting. This is why cost-inflating innovations dominate and why productivity and efficiency are so low. Centralization means patients are often treated homogenously, rather than as individuals with varying wants and needs. This prevents innovation and the use of new technologies. The NHS is a tax-funded system, which leads to a lack of transparency. It is virtually impossible for taxpayers to work out how much they pay for healthcare.

Other issues with the NHS include political domination and the desire to “leave a mark”, poor health outcomes (the UK’s cancer survival rates never comes close to the top 12), and lack of patient choice.

Click here to read the full publication →