Menu Close

The NHS explained in eight charts

The Beveridge Report outlined a radical plan for a National Health Service, provided free to all UK citizens, regardless of their income. Seventy years later, the groundbreaking NHS is as complex as it is large (it is the fifth biggest employer in the world). To break down the complexity here are eight simple graphs that explain the state of the NHS today, and how it got there.

Rising proportion of GDP

Since 1948, funding to support healthcare has been raised from general taxation and national insurance. As a proportion of gross domestic product (a measure of the value of the economy), the amount spent on healthcare has risen over time, from just over 2% in the early years of the NHS to over 7% most recently – an average of 4% over the period.

Alternative definitions of spending on healthcare provide different estimates for % of GDP, but the trend is always upwards.

Growth has slowed in recent years as government budgets have come under pressure, and there is a debate about the potential gap between demand for care and expenditure. The reasons for the increase in spending are complex, but demographic change – a growing and ageing population – is a major cause, along with medical advances that allow some conditions that were previously untreatable to be addressed, as well as a tendency for spending on healthcare to rise as countries become richer. The increase in spending probably also reflects rising public expectations from healthcare.

How the NHS compares internationally

If the NHS is costing more each year in absolute terms and more as a proportion of GDP, how does it compare with other countries? Is the UK getting good value for money?

Unfortunately, these sorts of comparisons are tricky because of the different ways healthcare systems are organised and the various definitions of spending. Also, international comparisons can’t determine what the “correct” level of spending should be.

It is often reported that the UK spends less than many EU countries and below the OECD average. Recent analysis of data that takes account of some of these differences, and includes spending on capital and health-related social care, has concluded that using these accounting methods, the UK government is more of a middling spender.

It is important to bear in mind that in some countries spending by individual citizens on healthcare is much higher than in the UK, where most of healthcare is provided free. Also, higher spending does not automatically mean better healthcare. The US is a very high spender, but many would argue that their healthcare system is far from perfect.

Where is the money spent?

Most healthcare spending is devoted to curative and rehabilitation care (around 63%). Almost half of total spending is in hospitals, and 15% in the family health services sector, which includes spending on GPs, dentists, opticians and pharmacists.

Long-term care spending accounts for 15%, but this does not include significant spending by individuals on social care. Spending on medical goods, which includes medicines bought at a pharmacy on prescription, accounts for about 10% of the total.

The largest category of spending in England in terms of condition (in 2010-11) was mental health (11%), followed by circulatory problems (7%) and then cancers and tumours (5%). This pattern of spending has been fairly stable over the previous few years, but as the number of people suffering from mental health problems has increased since 1993, and mental health issues are one of the main causes of the overall disease burden worldwide, there is some debate about the degree to which spending is keeping up with population need.

Rapidly rising cost of medicines

Let us delve a bit deeper into spending on medicines as this is an area of spending that has experienced a rapid increase in recent years, rising from £13 billion in 2010-11 to £17.4 billion in 2016-17. The annual rate of increase in spending on drugs far outstrips the annual rate of NHS budget increases.

Just under half the amount spent on drugs is in hospitals, and just over half is spent on drugs prescribed in primary care. A smaller amount was prescribed in hospitals but dispensed at a high street pharmacy.

The actual amount paid for medicines by the NHS will differ from these so-called “list costs” because they exclude discounts the NHS may receive, dispensing costs, as well as income from prescription charges.

Spending on medicines has risen faster in hospitals than in primary care, with the former almost doubling between 2010 and 2016. Overall, the costs of medicines have increased by over 33% since 2010. The availability of new medicines and increased use of specialist medicines have contributed to rising costs.

The most money spent on a medicine, overall, according to the most recent data, is on adalimumab, an arthritis drug. In primary care, the greatest amount spent on a drug was on rivaroxaban, a medicine to treat acute coronary syndrome.

Demographic change

Improvements in social conditions, lifestyle changes and advances in medical treatment mean that life expectancy has increased steadily since 1948. In England and Wales in 1948, males aged 65 could expect to live a further 12 years and females 15 years. By 2016 this had risen to 21 and 23 years, respectively.

Over the last century, life expectancy in England and Wales has increased by almost three years every decade. Men born in the early 1950s could expect to live 66 years and women 72 years. By the mid 2000s, this had risen to 79 and 83, respectively.

The life expectancy gap between males and females has changed over time, in favour of females. It widened in periods where working conditions for men were poor and when more women were surviving childbirth. Then it began to narrow from the early 1970s, reflecting a shift away from physical labour – including mining – and a fall in smoking among males.

There are some signs of life expectancy gains slowing down in recent years. Also, there are significant geographical variations that largely reflect differences between rich and poor. For example, men living in the most affluent areas of England can expect to live six more years than those living in the poorest areas.

Improved life expectancy means that the population is ageing overall. While in 1948, 5.5% of the UK population was 65 or older, 1.9% was 75 and over and only 0.2% of the population was over the age of 85, by 2016, this had grown to 18%, 8% and 2.4%, respectively.

However, not all of the additional years of life experienced are necessarily lived in good health, and data on self-reported health suggests that “healthy life expectancy” is much lower at 63 years for males and 64 for females. At age 65, men will spend about eight years in poor health and women about ten years. Again, there is substantial geographical variation, mainly reflecting differences in income.

Figures vary according to population and year considered.

This is reflected in the growth in NHS activity over time, for example in 2016-17, the greatest number of episodes of hospital care in England were experienced by those in the age group 70-75 years, and the fastest growth over the last ten years has been in the 85 years and over group.

The extra demands placed on the NHS by a growing ageing population living longer, but not necessarily in good health, is at least part of the explanation for the pressure on resources that we see in the NHS today.

Causes of death are shifting

In the latter part of the 19th century, infectious disease was the biggest cause of death, affecting mainly children. Subsequent reductions in mortality can be attributed to improvements in diet, sanitation, housing and water quality, as well as changes in behaviour.

Later on, advances in immunisation also played a major role in reducing infectious disease, especially among children. Reductions in deaths from airborne infections, such as bronchitis, pneumonia and influenza, have continued over time, but since the early 1970s, the reduction in mortality from heart disease and stroke has been a major factor in reducing overall mortality.

Other trends also reflect wider changes in society, such as large numbers of deaths from vehicle accidents during the blackout of World War II, declining after seatbelt laws were introduced.

Deaths are now concentrated more in older age groups. And for both men and women, death rates from heart disease and stroke have declined by around 50% over the past ten to 15 years, thanks to advances in prevention and treatment.

There have also been reductions of around a third in death rates from lung cancer in men, and a quarter for breast cancer in women. In contrast, death rates from dementia have increased for both men and women. For men, death rates for liver disease have increased. And for women, death rates for kidney disease, urinary disease and lung cancer have gone up.

These changes, even over a relatively short period of time, reflect population changes, treatment advances, and improvements in the diagnosis and recording of conditions. They also reflect changes in behaviour and lifestyle.

Despite falling mortality rates, however, some of these conditions still account for large numbers of deaths. In 2015, heart disease, stroke and certain cancers were still among the top ten leading causes of death in males and females. As people live longer and the population ages, the number of deaths where dementia is the primary cause of death has increased, making it the leading cause of death for women and the second leading cause for men.

Many of the top ten conditions have underlying risk factors that are linked to behaviour and lifestyle, such as smoking, drinking and nutrition. For example, 26% of adults in England are classified as obese, compared with 15% in 1993, and there were 617,000 hospital admissions in 2016-17 for which obesity was a direct or underlying factor – an increase of 18% since the previous year.

Similarly, smoking is also a leading cause of preventable death. In 2015, around 15.5% of adults (17% males, 14% females) smoked. There were 79,000 smoking-related deaths in England, with almost half a million hospital admissions attributed to smoking, albeit that the proportion of population who smoke has declined over time and the number of cigarettes smoked is lower than in the 1970s. Dramatic reductions have occurred since the 1950s, when 80% of men and 40% of women smoked.

Compared with the early days of the NHS, many of the top ten conditions that people are dying from can now be treated more successfully, but there is now a much greater emphasis on addressing the underlying behaviours that are associated with risk factors for many of these conditions, in order to prevent, rather than cure, these illnesses.

The NHS is just one strand in this approach, as the means to change behaviour go beyond the healthcare system towards the education and support of individuals. For example, legislation on smoking in public places, advertising restrictions and taxes on cigarettes, alcohol and, most recently, sugary drinks, play an important role. Given the increasing pressure on resources and the fact that we are living longer, the need to ensure we live these extra years in good health, is more pressing than ever.

Something to be proud of

Only 70 years ago, healthcare was a luxury that not everyone could afford. The NHS was founded on the principle that the health service should be available to all, free at the point of delivery and financed from taxation, which means that people contribute according to their means. This principle is still a central pillar of most parts of the NHS today, and despite some significant anxieties about future funding and dissatisfaction with some aspects of the service, it is at the top of the list of things of which the public are most proud, with strong support expressed for the underlying values on which it is based.

Since 1948, both the healthcare system and the nation’s health have transformed. Despite all the challenges that still remain to be tackled, the NHS survives and retains the principles of fair access and financial protection that Aneurin Bevan, the founder of the NHS, embraced.

More evidence-based articles about the NHS:

Want to write?

Write an article and join a growing community of more than 185,200 academics and researchers from 4,982 institutions.

Register now