I’ve been somewhat dissatisfied with the way UK healthcare has been examined over the long term. There are relatively few reports* so I thought I would slowly do my own assessment. Unsurprisingly, it’s taking a long time fitting this in my night hours. But, I have a couple of conclusions worth sharing already. I will try and drip these out over the year. The first conclusion is compared to France and Germany (and most of UK’s G7 peers where we have OK data). The UK has extremely significantly underspend on healthcare. 

The overall summary is that the UK underspent on healthcare for the 50 year period of 1970 to 2020. The underspend vs Germany and France s between 2 to 4 percent points of GDP.

But what does this mean in dollar or pound terms?

The approx. gap in USD is 46,000 per person less spend cumulatively per person or in absolute terms this is GBP989,719m (based on UK ONS GDP figures). So in the order of GBP1,000bn or GBP1 trillion. Another guide is that 2pp of GDP over 50 years is about 1 year’s worth of GDP! (Only ball park due to inflation etc.)

To give you scale of this underspend vs Germany. If all this money was spent on hospitals, given an average hospital is about GBP500m, then this would have been >1900 more hospitals. Today the UK has 1200 – 1300 hospitals (900 in England).

So we would have over double the number of hospitals if this had been spent on capital!

Here is a chart of this, and you can play around with the other OECD data (above).

One point of knowing this is that there is no quick fix to this. The UK has recentlyclosed the gap with France and Germany, but after 50 years of below average spending, one can not expect the gap to close.

Now there may be lessons from Japan, US etc - as US has significant above average spending. But the first topline macro point is that GBP1 trillion underspend relative to Germany means UK can not easily simply catch up in a few years.