Improve, rather than replace


In a paper aimed at informing debate about different models for publicly-funded healthcare systems, the Health Foundation finds there is no perfect funding system.

Is the grass really greener’ compares how social health insurance (SHI) and tax-funded models raise revenue for healthcare services across seven European countries – three versions of SHI (France, Germany and the Netherlands) and four tax-based systems (Italy, Spain, Sweden and the UK).

Some suggest the UK should switch to a SHI model, to increase overall funding, give citizens more choice and reduce central government’s role in local health funding decisions.

This report concludes that switching to a SHI system would be costly and disruptive, with no evidence it would deliver benefits. Instead, UK policymakers should recognise the strengths of the UK’s existing model - low administrative costs and low financial barriers to care compared with other countries - and focus on how to secure long-term sustainable funding in the face of growing demand.

The analysis also points out that the distinctions between funding models have blurred over time, and all three of the SHI schemes covered have added tax-based revenues to fund healthcare and are therefore no longer solely reliant on employment-based insurance contributions.

Regardless of the funding model, the analysis recognises that each healthcare system will have to grapple with the common challenge of ageing populations needing more care as they grow older.

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