Countries that spent a larger share of their economic wealth on health over time had more stable levels of funding in 2020

By stewartb

The letter writer in ‘Stop sweating the small stuff and keep our eyes on the prize‘, refers to the cost to the UK government of Covid-19 and then links this with how much better off Scotland must be as part of the Union. As well as the important counter to this based on how public finances work, there is also a complementary, strategic health investment perspective.

The health think tank, the Nuffield Trust last November contributes to this other perspective in an article headed: ‘Health spending during Covid-19: how does the UK compare?’. It examines how health spending changed across different countries in response to the pandemic. It assess why the UK may have spent – had to spend – more comparatively.

It reports that in the UK, government health spending per head of population grew by 21.9% in 2020 compared to 2019 – second only to Estonia (23.5%) among European OECD countries reporting data up to that point. In Germany and Sweden spending only increased by 3.9%, and in Norway expenditure stayed about the same (0.3%).

Importantly, it notes that those countries with the lower increases in the year still spent more overall on health as a share of their GDP and per head than the UK: ‘While the UK government spent $4,306 per capita in 2020 (up from $3,533 in 2019), historic and current investment of the highest spending countries ranged from over $4,000 in 2014 (Germany, Sweden and Norway) to $5,800 in 2020 (Germany and Norway).’

The Nuffield researchers consider what might explain the UK’s large spending increase during the pandemic: is it a reflection of the variable experience of the crisis across countries, or were some better prepared to deal with the impact of Covid? It makes several observations:

– a large proportion of the UK’s additional spend in the early phases of the pandemic went towards the Test and Trace programme. Germany, as an example, entered the pandemic with stronger public health infrastructure, made greater use of local laboratories, and so may not have had to make the same level of investment to build up capacity.

– different health systems had varying levels of stocks of PPE with which to respond to the crisis. The volume purchased at the prices needing to be paid at the time will have affected health budgets differently.

– countries have experienced different rates of Covid transmission, and waves of outbreaks hit at different times. The UK had higher rates of Covid hospitalisations in the first year of the pandemic than most other countries analysed.

It acknowledges that the UK government had to increase spending as a matter of genuine urgency – ‘a positive action’. However, the need for this increase in spending may reflect the UK’s structural vulnerabilities going into the pandemic.

It adds: ‘For example, during the first wave the UK experienced high rates of Covid infections acquired in hospital partly due to the lack of testing capacity, outdated building design, and high levels of bed occupancy that made it difficult to isolate Covid patients. This is in part a product of CONSISTENTLY LOW LEVELS OF INVESTMENT in health care capital as a proportion of GDP, which meant less flexibility in the earlier waves of the pandemic to cope with rising Covid cases.’ (with my emphasis)

And for further perspective, the Nuffield article notes: ‘Countries that have spent a larger share of their economic wealth on health over time – like Austria, Germany, Sweden, Norway and the Netherlands – appeared to have more stable levels of funding in 2020. The inverse is true for countries with relatively lower levels of government health spending, such as Estonia, Slovenia, Poland and Ireland.’ And including the UK.

One thought on “Countries that spent a larger share of their economic wealth on health over time had more stable levels of funding in 2020

  1. Really excellent Stewart. I for one had never thought about it this way. Certainly it’s not a left field point that Nuffield are making – I knew about the utter lack of testing capacity quite early on – it was about 6k a day for the entire UK. But as Nuffield point out, that unwillingness to invest in health care went much further.
    One important point it does raise though is the wisdom of comparison with rUK. Certainly there is justification for this at the moment as funding is within a common envelope. But, it means our ambition is constrained by the ambition (or lack of) at WM. What could we learn by thinking about a different system of healthcare, such as that in Germany or Norway? And remember, it’s not only about healthcare. We really need to raise our ambitions.

    Liked by 2 people

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