Innovation in European healthcare – what can Sweden learn? - LIF

Health services in England are mainly financed
through taxes
• Primarily funded by general taxation and
National Insurance contributions.
• Some care is funded privately through private
medical insurances (PMI), – some user charges,
cost sharing and direct payments for health care
delivered by NHS and private providers.
• Health expenditure in the United Kingdom has
risen significantly in recent years, with total
spending on health care as a proportion of gross
domestic product (GDP) increasing from 5.6% in
1980 to 8.7% in 2008.
• Each year, the Department of Health allocates
around 80% of the total NHS budget to PCTs
using a weighted capitation formula.
• Since 1999, there have been significant
changes to the way in which PCTs pay for
health services, particularly in the hospital
sector, with the introduction in 2003–2004 of
activity- based funding – developed in England
as a system known as Payment by Result
(PbR).
• The NHS spends about £1,980 for every
man, woman and child in the UK per year
• In 2009–2010, of estimated total NHS current
expenditure of £99.8 billion, £88.5 billion (88.7%)
was expenditure on NHS bodies (e.g. NHS
trusts, GPs, dentists), £9.7 billion (9.7%) was on
centrally-managed budgets (e.g. Connecting for
Health), and £1.5 billion was on funding personal
social services (1.5%); in addition the NHS had
a capital budget of £5.5 billion.
• In terms of out-of-pocket payments, while most
NHS health care is free at the point of use, some
services are either not covered by the NHS and
patients must, therefore, pay themselves (direct
payments) or are covered by the NHS but are
subject to cost sharing, usually in the form of copayments.
• Most out-of-pocket payments by individuals are
direct, with some 41% devoted to over-thecounter
medicines, while user charges for NHS
services are the largest part of co-payments,
accounting for 13% of the total.
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