Trends in and drivers of healthcare expenditure in the English NHS: A retrospective analysis

Trends in and drivers of healthcare expenditure in the English NHS: A retrospective analysis

Background: In England, rises in healthcare expenditure consistently outpace growth in both GDP and total public expenditure. To ensure the National Health Service (NHS) remains financially sustainable, relevant data on healthcare expenditure are needed to inform decisions about which services shoul...

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Bibliographic Details
Published in:Health economics review Vol. 10; no. 20; pp. 1 - 11
Main Authors: Santana, Idaira Rodriguez, Aragon, Maria Jose, Rice, Nigel, Mason, Anne Rosemary
Format: Journal Article
Language:English
Published: Heidelberg Springer 30-06-2020
Springer Berlin Heidelberg
Springer Nature B.V
BMC
Subjects:
Activity
Cost
Demographic pressures
Drivers
Expenditures
Health Care Management
Health Economics
Health Services Research
Healthcare expenditure
Medicine
Medicine & Public Health
Pharmacoeconomics and Health Outcomes
Public Finance
Public Health
Technology
Trends
United Kingdom > UK
England
Demographic pressures
Activity
Drivers
Technology
Cost
Healthcare expenditure
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Summary:Background: In England, rises in healthcare expenditure consistently outpace growth in both GDP and total public expenditure. To ensure the National Health Service (NHS) remains financially sustainable, relevant data on healthcare expenditure are needed to inform decisions about which services should be delivered, by whom and in which settings. Methods: We analyse routine data on NHS expenditure in England over 9 years (2008/09 to 2016/17). To quantify the relative contribution of the different care settings to overall healthcare expenditure, we analyse trends in 14 healthcare settings under three broad categories: Hospital Based Care (HBC), Diagnostics and Therapeutics (D&T) and Community Care (CC). We exclude primary care and community mental health services settings due to a lack of consistent data. We employ a set of indices to aggregate diverse outputs and to disentangle growth in healthcare expenditure that is driven by activity from that due to cost pressures. We identify potential drivers of the observed trends from published studies. Results: Over the 9-year study period, combined NHS expenditure on HBC, D&T and CC rose by 50.2%. Expenditure on HBC rose by 54.1%, corresponding to increases in both activity (29.2%) and cost (15.7%). Rises in expenditure in inpatient (38.5%), outpatient (57.2%), and A&E (59.5%) settings were driven predominately by higher activity. Emergency admissions rose for both short-stay (45.6%) and long-stay cases (26.2%). There was a switch away from inpatient elective care (which fell by 5.1%) and towards day case care (34.8% rise), likely reflecting financial incentives for same-day discharges. Growth in expenditure on D&T (155.2%) was driven by rises in the volume of high cost drugs (270.5%) and chemotherapy (110.2%). Community prescribing grew by 45.2%, with costs falling by 24.4%. Evidence on the relationship between new technologies and healthcare expenditure is mixed, but the fall in drug costs could reflect low generic prices, and the use of health technology assessment or commercial arrangements to inform pricing of new medicines. Conclusions: Aggregate trends in HCE mask enormous variation across healthcare settings. Understanding variation in activity and cost across settings is an important initial step towards ensuring the long-term sustainability of the NHS.
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ISSN:2191-1991
2191-1991
DOI:10.1186/s13561-020-00278-9