Health Spending

Question 1

What impact does real terms UK health spending have on the economy as it has grown below the long term average

Answer 1

2.4% per year over this parliament, versus an average of 3.6% over the longer term. But the uk’s poor economic performance means that health spending as a share of national income has increased by more than the long term average.

Question 2

Health spending has shown a clear tendency to rise faster than planned

Answer 2

But in recent years higher than expected inflation has reversed this trend

Question 3

The Department of Health and Social Care (DHSC) budget

Answer 3

Has by less than planned over this parliament, with cash top-ups insufficient to offset the effects of higher inflation

Question 4

The DHSC’s day-to-day budget has went up dramatically from

Answer 4

26% share of all-department total in 1998-1999 to 43% in 2022-23

Question 5

Consequence of low capital spending

Answer 5

The deterioration of the NHS estate in England, where the maintenance backlog has more than doubled over the past decade. Within that, a high risk backlog has quintupled

Question 6

Health spending per person has been consistently higher in Scotland, Wales and Ni

Answer 6

Within England, NHS spending this year is planned to be 32% higher per person in the area of the highest funding

Question 7

The size of the NHS means that

Answer 7

Any increases in Health spending will force difficult fiscal trade-offs elsewhere (opportunity cost)

Question 8

Factors driving increased health spending

Answer 8

Ageing population
-11 million people above 65
-UK population of 68milliom
- 850,000 people living with dementia

Rising life expectancy
-78.6 years for a man
-82.6 years for a female

Increased expectations of consumers

Population growth
- UK population was 50 million in 1948 when NhS started
- a 37% increase in population

High cost of new treatments and surgeries
-£3,000 - £8,000 for birth
- £11,200 for hip replacement
-£41,000 brain surgery

Increase in chronic illness and conditions
the past affecting their future / present (i.e industry worker)

Increased poverty and inequality

Question 9

Discuss possible economic implications of increasing spending on nhs

Answer 9

• taxes (both direct and indirect) may have to go up to pay for funding

• tax increases may reduce consumer spending, particularly given stagnation in wage growth (1)
government borrowing may be used to fund the NHS, (thus the government may not achieve a budget surplus). Resulting in increased interest payments of debt (1)

• NHS may be forced to deliver productivity gains (it currently employs 1.3m people)

• increased spending may deliver improved health outcomes/ more productive workforce by reducing sickness due to ill health

• an increased NHS workforce could have a direct benefit on the local economy through a boost to employment/ spending/tax revenues

• a large proportion of increased spending may be spent on wage increases which does not translate to increased treatment

• increased spending on wages may encourage NHS workers to remain within the NHS which could reduce waiting times/staff shortages (1)