The long-standing debate over the NHS’s funding model has been reignited by a new report, which firmly dismisses the idea that a European-style insurance system would improve its performance.
Instead, the Institute for Public Policy Research (IPPR) asserts that “chronic underinvestment” is the true culprit behind the health service’s woes.
Experts involved in the report concluded there is “no structural silver bullet” for the NHS, branding discussions about moving to systems akin to those in Germany, France, or the Netherlands as a “pointless distraction”.
They urged policymakers to instead “focus on what actually works”, advocating for increased investment in infrastructure, bolstering primary care services, and proactive measures to prevent ill health.
The IPPR’s analysis, which scrutinised data from 22 countries across five key performance measures – capacity, access, equity, quality, and efficiency – found no evidence that social health insurance (SHI) systems outperform tax-funded models like the NHS.
SHI systems typically involve individuals paying a percentage of their salary for healthcare cover from non-profit funds or insurers.
Furthermore, the report highlighted that tax-funded systems proved cheaper for patients, with individuals in the UK spending 2.6 per cent of their household income on out-of-pocket health costs, compared with 3.5 per cent for those in insurance-based systems.
Administrative costs were also lower in tax-funded models, at 2.2 per cent versus 3.5 per cent in insurance-based systems.
In the report’s foreword, Lord Darzi, a former health minister, stated: “The social insurance systems of France, Germany and the Netherlands are regularly invoked as superior alternatives, with little scrutiny on what those systems actually deliver or what it would take to replicate them here.”
He added that abandoning the current model would be “enormously costly” and entail “surrendering” existing advantages.
Despite this, the report acknowledged that the NHS’s performance, when benchmarked against other systems, remains “sobering”.
The IPPR’s analysis of deaths from conditions where timely care should prevent fatalities placed the NHS as the second-worst performer, only ahead of the United States.
Sebastian Rees, head of health at IPPR, commented: “There is no structural silver bullet for the NHS. The idea that simply switching to a European-style insurance model would fix its problems is a pointless distraction and not supported by the evidence.
“The NHS’s challenges are real – but they are the result of a decade of chronic underinvestment and choices on how money is spent, not the funding model itself.”
The IPPR noted that capital investment for the NHS, covering essential assets such as beds, diagnostic equipment, and hospital buildings, is currently lower than it was in 2010.
The organisation called on the Government to prioritise investment in the NHS estate, shift more care from hospitals into community settings, and address the ongoing crisis in social care to reduce preventable hospital admissions.
Mr Rees concluded: “Policymakers should focus on what actually works: investing in infrastructure, strengthening primary care, and tackling the drivers of poor health.”
Health Secretary Wes Streeting said: “This is a timely report, as the arguments against the NHS grow louder.
“It dispels the myth that insurance-based healthcare systems are more efficient. While this Government is cutting the back office to reinvest in the front line, those who would rather move to an insurance system would do precisely the opposite.
“The NHS model is also the fairest way to provide care, rather than allowing your wealth to decide your health. The founding promise of the NHS is just as relevant today as in 1948: that healthcare should be made available to all, so whenever you fall ill, you never have to worry about the bill.
“Our investment and modernisation is rebuilding the NHS. Waiting lists are at the lowest level in three years, ambulances are arriving faster than for half a decade, and patient satisfaction is rising for the first time since” before the pandemic. Our plan will make it fit for the future, so it is always there for us when we need it.”
