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Is the NHS Falling Apart?

Not a day goes by without another story about the 'crisis' in the National Health Service. The Prime Minister, Tony Blair, has pledged to bring health spending up to the European average. But some critics say that the NHS is falling apart and will never improve unless the system for funding the health service is radically changed. The German health system is often presented as a model for reform. The following article, reprinted with kind permission of THE WEEK, (29 January, 2000), looks at the background to the current press debate and presents arguments for and against change.

See Guardian Unlimited to update this article on contemporary NHS news and issues

For activities using this item prepared by Edyta Bracik, a teacher trainer from Radom, go to Health System Issues - classroom materials.

Is the NHS really so bad?

Measured by its impact on the health of the population it is actually performing far better than it was 20 or even ten years ago. Death rates from coronary heart disease and cancer, for example, have fallen dramatically; the life expectancy of a British child born today is four years greater than one born in 1979.

So why is it getting such a bad press?

Partly because, in many ways, the health services of other European countries are now faring better than ours. In Britain 70 out of every 100,000 people die of heart disease compared with just 36 in France. Cancer sufferers get better treatment than they used to, but we still have the worst survival rate from cancer in the developed world. More important than the statistics, however, is the perception that the quality of NHS care has dramatically deteriorated. The shocking cases of abuse in old people's wards, the continuing scandal of mixed-sex wards, the ever-lengthening waiting lists - all this suggests a service which can no longer cope with the demands put upon it.

Why can't it cope?

Because people's expectations of what they should get "free" on the NHS far exceed the growth in available funding. In the past ten years, open heart surgery, hip and knee replacements and keyhole surgery have become routine, but the NHS simply can't keep up with the phenomenal growth in medical advances - all of which require costly equipment and more highly trained staff. Meanwhile, the number of people over 65 (a group whose demands on the NHS are disproportionately high) has risen to 20% of the population - double what it was 50 years ago.

But don't all Western countries face similar problems?

Yes, but they also spend more to alleviate them. Each year Britain spends £946 per head on health, compared with £2,500 in the US, £1,600 in Germany and £1,400 in France. Germany spends well over one-tenth of its national income on healthcare; Britain spends just 6.7%. Inside the EU, only Spain, Ireland, Greece and Portugal spend less. As a result, the NHS is often desperately short-staffed. The number of cancer specialists in Germany and France, for instance, is around twice the number in Britain. A recent survey of 15 countries showed that Britain has just 1.7 consultant physicians per 1,000 of the population compared with 3.4 in Germany, 2.9 in France and 2.4 in Poland. Only Mexico, Korea and Turkey had a lower ratio.

Is it just a question of larger budgets?

No. Many argue that the NHS's problems are made worse by the way it's organised. The NHS is funded from central taxes; central government determines the level of spending and sets targets for waiting times and treatments; and local health authorities decide what services they will fund. All this, say the critics, leads to a bureaucratic obsession with outputs and targets at the expense of the individual patient who is treated like a statistic. People would be treated with more consideration, they argue, if we were to adopt a compulsory health insurance system of the sort used in Germany or France.

How does the German system work?

Unless you are very rich (in which case you can opt for private insurance), you are obliged to join one of the many non-profit sickness funds which administer national health insurance. Your premium is deducted from your pay - with about half contributed by your employer - and is set at a percentage of your income, between about 9% and 17%. The variation is due to competition between the funds, which compete for members by offering a wide variety of benefits over and above those required by law. Hospitals, too, are under diverse ownership so there is also competition between them to secure contracts from the funds. (The unemployed and those on benefit have their costs paid by the state.)

And why is that considered a better system?

Because competition between insurance companies and between hospitals switches power from bureaucrats to patients. That, at least, is the theory. In practice, the real advantage - and drawback - of insurance-based systems over tax-based ones is that government finds it much harder to control expenditure. This means the health system receives more money overall, which probably explains why fewer patients in Germany and France suffer long delays, and why there are fewer complaints about poor service. But it also means there is much looser supervision over costs. Indeed, the German and French systems are hugely inefficient and burdened by a massive bureaucracy for collecting payment and disbursement. Typically, the cost of administration adds around 27% to each insurance fund. It adds just 5% to the NHS.

So is the NHS an efficient system?

Very much so. Pressure on hospitals to treat more cases has led to a ruthless drive in Britain for greater efficiency, with beds (and associated nurses) being cut at the same time as the number of patients is reaching record levels. With hospitals running at near maximum capacity, British health services - measured in terms of cost per unit of output - are probably the most efficient in Europe. This creates huge problems when there are sudden surges in demand such as that caused by the recent flu epidemic. But the truth is that most developed countries - not least Germany and France - are desperate to find ways of reducing the costs of healthcare, which affect pay packets and are being blamed for high levels of unemployment. The irony is that many are looking to Britain for lessons in how to do it.

Is compulsory private insurance the answer to our problems?


  1. Compulsory private insurance-based schemes produce more money overall for healthcare.
  2. Competition between insurance companies and hospitals puts the patient, not the bureaucrat, in the driving seat.
  3. People will only be prepared to pay more into the system if they know the money is going on health.


  1. Private insurance schemes are far more wasteful and inefficient than the NHS.
  2. Insurance-based schemes tend to create a two-tier system, with the poor routinely getting the worst deal.
  3. The real need is to spend more money on health. How that spending is organised is of secondary importance.

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