Book of the Month England vs Scotland: Does More Money Mean Better Health?
Authors: Rudolf Klein
Journal: Journal of the Royal Society of Medicine (2004)

Will the extra billions now pouring into the National Health Service deliver the extra benefits that Ministers are hoping for? One way to answer this question is to look at Scotland. Over the decades the NHS has been funded more generously in Scotland than in England: spending per head in the former has been 20–25% higher than in the latter (a difference only partly balanced by the higher rate of private spending in England). So if more money is indeed the answer to the NHS’s problems—if chronic underfunding is the explanation of the service’s shortcomings—then Scotland ought to have been leading the way all these years, a shining example to its cash-starved English counterpart.

Benedict Irvine and Ian Ginsberg have looked into this matter, and the answer to the question in the subtitle of their book1 (Does more money mean better health?) is of course a resounding ‘no’. Higher spending has not produced a healthier population. Predictably so, given that the relationship between the level of spending on healthcare and population health is problematic and complex. To cite a famous monograph by Aaron Wildavsky, in the case of the USA at least, it is perfectly possible to spend more and feel worse. And one of the reasons why, historically, Scotland has received more money is precisely that its population has been, and continues to be, less healthy than England’s; in short, a needs-based allocation favoured Scotland (as did the political need to respond to Scottish nationalism).

So if the only concern of the book had been to answer its own question, it would not have been worth writing (and the only review worth writing would have been to say ‘stop asking silly questions’). Fortunately, however, it also makes a contribution to answering the larger and more sensible question of what benefits extra billions can be expected to bring to users by comparing the characteristics of the service offered to the Scottish and English populations. So we learn that Scotland does indeed have more doctors and nurses, that general practice list sizes are smaller, that activity rates are higher and that hospital stays are longer. More specifically, the analysis concentrates on the treatment of conditions responsible for a high proportion of mortality—in particular cancer and cardiovascular disease—where Scotland tends to have the edge on England, if only marginally so, in terms of activity (such as rates of coronary artery bypass grafting and the reach of screening programmes) but not of outcomes. The book thus provides a useful source of data. It could perhaps have been more useful still if it had not concentrated so much on mortality and, instead, asked whether Scotland’s NHS makes a significantly higher contribution to its population’s quality of life than its English counterpart—for example, by repairing eyes, hips or knees. An earlier comparative study of the UK healthcare systems (strangely not cited in the very long bibliography) suggested that once again the answer would be that Scotland’s performance is not particularly outstanding. It could be that the more leisurely pace of work in Scotland makes for higher patient satisfaction, as well as making life easier for staff.

Overall, however, the findings of this study stand: when England and Scotland are compared, there is no direct, lineal relationship between extra money and better performance, let alone population health. The odd thing is that the authors use this entirely unsurprising finding as a springboard for a reckless leap into prescription. The common factor in the comparative analysis, they argue, is that the NHS in both countries is a centralized, tax-funded service. It is this which explains why Scotland does not appear to benefit proportionately from the extra spending. System characteristics inhibit the effective use of the extra money. It does so in Scotland. It will do so in England. The solution is to adopt instead a European-style social-insurance-based healthcare system, with competing insurers and providers.

Whatever the case may be for such a move, it does not follow from the evidence cited in the book. And the case (which seemed plausible to me a few years ago) is weakening by the day, as more European countries discover the inadequacies of payroll-based social insurance systems, given labour market and demographic changes, and the attractions of drawing on a larger tax base. But if we ignore the prescription, the book does offer a timely warning. The extra billions flowing into the NHS will not produce automatic proportional benefits to its users (as distinct from its staff) unless incentives change producer behaviour. And in this respect England’s NHS—assuming that the emphasis on moving towards a more decentralized, pluralistic system is sustained—looks a better bet than Scotland’s more traditional way of running its service.