How much does the NHS cost compared to other countries?
First of all, how much does the NHS cost?
It is actually very hard to say, as it is surprisingly difficult to define the NHS.
For example, does it include all the 4 nations, as they have different NHSs. Does it include healthcare for the armed services? Does it include arms length bodies like NICE, HEE, CQC and UKHSA? What about public health (UKHSA)? It is not clear.
Either way, the NHS is not cheap .. or free.
So. What does it cost?
Total UK central government funding for health (including spending by central government departments and devolved administrations) in 2023/24 was about £182 billion – about 1/2 £billion a day. With a population of 67 million, that’s about £2700 per person per year, or £225 a month.
How does that compare to other countries?
This is about 11% of total GDP (Gross Domestic Product), i.e. about 11% of your taxes. This is in line with other developed countries.
This compares to about 35% on ‘welfare’ (including benefits and pensions), 4% on justice (police, courts, and prisons), 2% of GDP spent on defence.
NHS England runs the NHS in England for the DHSC. About £115 billion of the (£163 billion) NHS England budget is allocated to the 42 Integrated Care Systems (which took over from CCGs in April 2022).
What happens to the rest of the money?
Specialised commissioning
NHS England retains around a quarter of its budget (about £45 billion) for other responsibilities including about £30 billion mainly for Specialised Commissioning; which is a national and regional method of funding the treatment of rare and expensive diseases. Examples include dialysis/transplantation, and cardiothoracic surgery.
Pre COVID-19 pandemic, Specialised Commissioning (part of ‘direct commissioning’ in the pie chart below) was one of the fastest growing elements of the NHS budget – increasing by an average of over 7% per year. This is a concern as it means in the future, there will be less funds for ‘ordinary’ healthcare like GPs, local hospitals and mental health.
NHS England funding allocation 2022/23
Other funding
The rest funds other things like prisons, armed services, and itself. It also funds ‘arms lengths bodies’ (linked to the NHS) like United Kingdom Health Security Agency (UKHSA; public health), Health Education England (HEE), National Institute of Health and Special Care Excellence (NICE) and Care Quality Commission (CQC).
These are national institutions that advise government and the NHS but are not formally part of it. This is because it is felt they need a degree of independence so they can say what they like.
The largest arms lengths bodies, in terms of cost, are UKHSA, and Health Education England – receiving £4.0 and £4.4 billion respectively.
Summary
We have explained how much does the NHS cost compared to other countries. It is not a simple question, as it is hard to define the NHS. Anyway we hope it is a bit clearer now.
Other resources
This is a good article from the BMA, especially comparing current funding to previous years.
This video explains more about the money flow.
