Health & Social Care

The NHS is often defended on the grounds that it is underfunded. This claim does not survive contact with the data. The United Kingdom spends approximately 11.3 per cent of GDP on health — a figure that has risen sharply in recent decades and now sits within a percentage point of France (11.9 per cent) and Germany (12.7 per cent). When the argument was that Britain spent far less than its peers, underfunding was a plausible explanation for poor outcomes. That argument has largely collapsed. Britain now spends at a level broadly comparable to France and significantly more than Australia (9.6 per cent of GDP), yet delivers outcomes that are materially worse than both.

Cancer survival rates tell the story most starkly. Five-year survival for breast cancer in England is around 85 per cent; in France it is 87 per cent, in Germany 86 per cent and in Australia 91 per cent. For bowel cancer the gap is wider: England manages roughly 60 per cent five-year survival against 63 per cent in France, 65 per cent in Germany and 71 per cent in Australia. These are not marginal differences. Across the major cancers, England consistently sits in the bottom third of comparable Western nations. Late diagnosis is the principal driver — patients wait longer to see a specialist, longer to receive imaging and longer to begin treatment.

Waiting times are the system's most visible failure. The elective waiting list in England exceeded 7.5 million in 2024, a figure without precedent and without parallel in any comparable country. The four-hour target for accident and emergency departments — once a point of pride — has not been met in a single month since July 2015. Ambulance response times for the most serious emergencies routinely exceed their eight-minute target. These are not the characteristics of a well-functioning healthcare system. They are the characteristics of one that rations access by making people wait.

Patient satisfaction has cratered accordingly. The NHS inpatient survey recorded overall satisfaction at 92 per cent in 2011; by 2023 it had fallen to 67 per cent, a collapse driven by difficulty accessing GP appointments, long waits for elective procedures and the perception — increasingly well founded — that the service is deteriorating year on year.

The standard response to these figures is that they reflect years of austerity and would improve with more money. This is the argument that has been made in every decade since the Service was founded. More money has been provided — repeatedly, substantially and by governments of both parties — and the fundamental problems have not been resolved. Spending per head in real terms is roughly five times what it was at the Service's founding. The question is not whether more money would produce marginal improvements in the short term (it would) but whether the system's structure is capable of delivering outcomes commensurate with what the country spends. The evidence of seventy-five years suggests it is not.

The NHS operates as a monopoly provider funded from general taxation with no price signal to the patient and no meaningful competition between providers. A patient's choice of hospital has no meaningful effect on that hospital's revenue. A GP surgery that cannot offer appointments within a reasonable time faces no penalty for the failure. A trust that delivers exceptional care receives no reward beyond the satisfaction of having done so. The incentive structure is, in economic terms, almost perfectly flat — and a system without incentives is a system without the means to improve itself.

The NHS was built on the principle that healthcare should be free at the point of use and funded from general taxation. The intention was egalitarian: that no person should be denied treatment because they could not pay for it. This remains a principle worth defending. But the mechanism chosen to deliver it — a monolithic state provider funded from a general tax pool in which no individual can see what they contribute or what it costs — has produced a culture of entitlement without responsibility, of demand without limit and of provision without accountability.

The Beveridge Report of 1942, which laid the intellectual groundwork for the welfare state, envisaged a system of social insurance — contributory, transparent and linked to specific benefits. Beveridge was explicit that his scheme rested on the contributory principle: that citizens would pay identifiable contributions and receive identifiable entitlements in return. What was actually built departed from this vision almost immediately. National Insurance contributions became a payroll tax in all but name, pooled into general revenue and bearing no relationship to the benefits they notionally funded. The contributory principle survived as a label on the payslip but not as a feature of the system.

The consequences are visible across the welfare state but nowhere more acutely than in healthcare. When a service is presented as free, demand for it is functionally unlimited. Every economist understands this. When the patient bears no cost for a GP visit, there is no disincentive to attend for trivial complaints. When an emergency department charges nothing, it becomes the default option for people who cannot get a GP appointment — not because their condition is an emergency but because the emergency department is open and the GP surgery is not. The system rations not by price but by queue, and the queue falls hardest on those whose conditions are serious but not immediately life-threatening: the patient with a suspicious lump who waits months for a scan, the pensioner whose hip replacement is delayed and delayed again.

The continental European model takes a different approach. In France and Germany, citizens pay identifiable health insurance contributions — visible on their payslip, distinct from general taxation — into funds that are ring-fenced for healthcare. These contributions buy them membership of an insurance scheme that covers a defined package of care. The link between contribution and entitlement is direct and understood. Patients know what they are paying for. They know what they are entitled to. And because the system includes co-payments for most services, they have a reason to use it thoughtfully rather than reflexively.

This is not an argument against collective provision. It is an argument for collective provision that is structured honestly — where the cost is visible, the contribution is identifiable and the entitlement is defined. A system built on these principles does not abandon the poor. In every country that operates a social insurance model, those who cannot afford to contribute have their contributions paid by the state. The safety net is preserved. What changes is the mechanism: from a monolithic state service funded by an invisible slice of general taxation to a pluralistic insurance system in which every citizen has a stake, a contribution and a claim.

The proposal is for a system of mandatory social health insurance, modelled broadly on the German and French systems but adapted to British circumstances. Every resident of the United Kingdom would be required to hold health insurance from a regulated insurer. The insurance would cover a defined basic package (set out in Section IV below). Insurers would be required to accept all applicants regardless of pre-existing conditions and would be prohibited from varying premiums on the basis of health status.

For employed persons, contributions would be split between employer and employee as a percentage of earnings, collected through the payroll system. Germany sets this at 14.6 per cent of gross salary, split equally; France operates a more complex arrangement in which employer contributions are higher. The precise rate for the United Kingdom would need to be determined actuarially, but a combined rate of between 12 and 15 per cent of earnings — replacing the existing National Insurance contribution — is a reasonable starting estimate. The employer share would be mandatory; the employee share would be deductible from income tax, as proposed in Item VII.

Self-employed persons would pay the full contribution themselves, again deductible from taxable income. For those out of work, on low incomes or in receipt of state pensions, the government would pay the insurance contribution directly from general taxation — preserving the principle that no person should be uninsured because they cannot afford the premium. Germany handles this through its Jobcentres, which pay contributions for the unemployed into their chosen sickness fund. France uses a system called the Complémentaire Santé Solidaire, which provides full coverage for those below an income threshold. Either mechanism would work.

The insurance market should be composed of a mixed estate of insurers: not-for-profit sickness funds on the German model, mutual societies and regulated for-profit insurers. The German system operates primarily through not-for-profit sickness funds (Krankenkassen), of which there are roughly a hundred, competing for members on service quality and supplementary benefits. France uses a hybrid of not-for-profit caisses for the base layer and a competitive market of mutuelles and private insurers for the top-up layer. Australia permits for-profit insurers but regulates them tightly through community rating and portability requirements.

What matters is not the ownership structure of individual insurers but the regulatory framework within which they operate. The essential features are community rating (premiums cannot vary by health status), open enrolment (insurers must accept all applicants), portability (citizens can switch insurer annually without penalty) and a risk-equalisation mechanism that transfers funds from insurers with healthier populations to those with sicker ones, preventing cherry-picking. Germany's Risikostrukturausgleich and Australia's Risk Equalisation Trust Fund both achieve this effectively. The United Kingdom would need an equivalent.

The American system serves as a cautionary tale. The United States spends roughly 17 per cent of GDP on healthcare — far more than any other country — and yet leaves tens of millions uninsured or underinsured, produces mediocre population-level outcomes and generates medical debt that is the leading cause of personal bankruptcy. The American failure is not a failure of insurance per se but of regulation: insurers were for decades permitted to deny coverage, exclude pre-existing conditions and impose lifetime caps. The Affordable Care Act addressed some of these failures but left in place a system of Byzantine complexity. The lesson for Britain is not that insurance does not work but that it must be mandatory, universal and tightly regulated. An opt-out model or a voluntary top-up model would replicate the American pathology.

Every regulated health insurance policy must cover a basic package defined by statute and reviewed periodically by an independent body. The package should be comprehensive enough that a person holding only the basic policy receives care of a high standard, without supplementary insurance being necessary for any essential treatment. Supplementary policies — covering private rooms, faster access to elective procedures or treatments not included in the basic package — should be available but never required.

The basic package should cover emergency care without exception and without co-payment. A person who arrives at an emergency department with chest pain or a broken limb should be treated immediately, regardless of insurance status, with the cost recovered from their insurer afterwards. This is how emergency care works in every social insurance system and it is one area where the NHS principle of universality at the point of use should be preserved without modification.

Primary care — GP consultations, routine diagnostics, preventive screening, vaccinations and maternity care — should be covered in full, subject to modest co-payments for GP visits (discussed in Section V). Mental health services should be covered on the same terms as physical health, without the artificial distinction between the two that has plagued the NHS since its inception. France covers psychiatric consultations and psychotherapy under the standard reimbursement framework. Germany requires its sickness funds to cover psychotherapy as a Pflichtleistung — a mandatory benefit. The United Kingdom should do the same.

Hospital treatment — elective and emergency, surgical and medical — should be covered in full for treatment delivered by any accredited provider. Dental care should be included in the basic package for preventive and restorative treatment. The NHS has effectively abandoned universal dental care; in many parts of England it is impossible to find a dentist accepting NHS patients. A social insurance system would fund dental care through the same mechanism as medical care, with dentists billing insurers rather than relying on a state contract that most find economically unviable.

Prescription medicines should be covered subject to a co-payment, with exemptions for chronic conditions and low-income patients. The existing NHS prescription charge is already a form of co-payment; the difference under a social insurance system is that the co-payment would be a percentage of the medicine's cost (as in France, where the patient pays 35 per cent for most medicines) rather than a flat fee that bears no relationship to the cost of the drug dispensed.

The scope of the basic package should be determined not by Ministers but by an independent body — analogous to Germany's Federal Joint Committee (Gemeinsamer Bundesausschuss) — comprising clinicians, insurers, patient representatives and health economists. This body would decide which treatments are included in the basic package, on the basis of clinical evidence and cost-effectiveness. Political interference in coverage decisions — the kind that produces headlines about "postcode lotteries" — would be replaced by a transparent, evidence-based process with published criteria and a right of appeal.

The phrase "free at the point of use" has become an article of faith in British political discourse. To question it is to invite accusations of wanting to deny care to the poor. But the claim that removing all price signals from healthcare produces better outcomes is contradicted by the experience of virtually every high-performing health system in the world. France, Germany, Australia, Japan, South Korea and Switzerland all impose co-payments on patients for GP visits, specialist consultations, prescriptions and in some cases hospital stays. Their outcomes are superior to England's across nearly every measure.

The purpose of a co-payment is not to raise revenue, though it does so. Its purpose is to give the patient a reason to consider whether a consultation is necessary. A co-payment of ten or fifteen pounds for a GP visit — roughly what France charges for a consultation with a médecin généraliste — would not deter a patient with a genuine concern. It would deter a proportion of the visits that GPs themselves describe as unnecessary: the patient with a cold that will resolve on its own, the repeat prescription that could be handled by a pharmacist, the worried-well consultation that consumes fifteen minutes of a doctor's time and produces nothing but reassurance. Every such visit that does not happen is an appointment freed for someone whose need is greater.

The objection that co-payments fall hardest on the poor is valid only in the absence of exemptions. In France, patients with chronic conditions (affections de longue durée) are exempt from co-payments for treatment related to their condition. Low-income patients receiving the Complémentaire Santé Solidaire pay nothing. Germany caps out-of-pocket spending at two per cent of household income (one per cent for the chronically ill). These are not theoretical protections; they are features of systems that have operated for decades without the sky falling in. A British co-payment scheme should include equivalent exemptions: no co-payment for children, for patients with chronic conditions being treated for those conditions, for the unemployed or for those below a defined income threshold.

Emergency care should carry no co-payment whatsoever. The last thing a functioning health system needs is a patient with chest pain hesitating over whether to call an ambulance because it might cost them money. The co-payment applies to routine, non-emergency care where the patient has time to exercise judgment. In emergencies, the system should act first and settle accounts afterwards.

Under a social insurance model, the question of who provides care is separated from the question of who pays for it. The insurer pays. The provider — whether a hospital, a GP surgery, a diagnostic centre or a mental health clinic — bills the insurer for the services it delivers. Patients choose their provider. Providers compete for patients. Insurers negotiate prices and quality standards with providers on behalf of their members.

This does not require the abolition of publicly owned hospitals. France operates a mixed estate in which roughly 65 per cent of hospital beds are in public institutions and 35 per cent in private ones, both for-profit and not-for-profit. Public and private hospitals bill the same insurance system on the same terms. Germany's hospital landscape is similarly mixed: municipal hospitals, charitable foundations (many with religious affiliations) and private hospital groups all operate within the same insurance framework. In both countries, public hospitals have adapted to the insurance model without becoming private. They simply bill insurers rather than receiving a block grant from the state.

The existing NHS estate — its hospitals, clinics and equipment — would not need to be sold or privatised. NHS trusts could be converted into independent public providers: self-governing institutions, publicly owned but operationally independent, billing insurers for the care they deliver in exactly the way a German Kreiskrankenhaus or a French hôpital public bills the relevant sickness fund. Some would thrive under this model. Others, freed from the obligation to provide services regardless of demand, might specialise. A hospital that is particularly good at orthopaedic surgery might attract patients from a wide area; one that struggles might need to restructure or merge. This is how a functioning market in healthcare works, and it is how the best European systems have driven improvements in quality without abandoning public provision.

GP surgeries would operate as they do now in structural terms — small practices or partnerships — but would bill insurers per consultation or per registered patient rather than receiving funding through the opaque and much-criticised NHS GP contract. The advantage is transparency: the GP knows what each consultation is worth, the insurer knows what it is paying for and the patient can switch if the service is poor. France's médecins libéraux operate precisely this way, as do the majority of GPs in Germany and Australia.

The fear that this would produce a two-tier system — better care for the rich, worse care for the poor — is understandable but not supported by the evidence from countries that have adopted this model. In France, the same hospitals treat privately insured and publicly subsidised patients, using the same staff and the same facilities. The basic package is the same for everyone. What supplementary insurance buys is convenience — a private room, faster access to an elective procedure — not a higher standard of clinical care. The two-tier system that Britain fears already exists: it is called the NHS, and the tiers are determined not by income but by geography, by postcode and by the accident of which trust happens to serve your area.

The National Institute for Health and Care Excellence evaluates new medicines against a cost-effectiveness threshold and recommends whether the NHS should fund them. In principle this is rational. In practice it means that British patients are routinely denied access to drugs that are available as standard in France, Germany and Australia. NICE's threshold — roughly £20,000 to £30,000 per quality-adjusted life year — is among the most restrictive in the developed world. The result is a formulary that is narrower than those of comparable countries, longer delays in making new treatments available and a pattern of "managed decline" in which cost containment takes precedence over patient access.

The contrast with France is instructive. France operates a system in which the Haute Autorité de Santé evaluates new drugs and assigns them a rating (known as the ASMR — Amélioration du Service Médical Rendu) that determines both the price the state will negotiate and the reimbursement rate. Drugs rated as offering a significant therapeutic advance are fast-tracked and priced higher. Drugs offering marginal or no improvement over existing treatments are priced lower or not reimbursed at all. The system is more permissive than NICE for genuinely innovative treatments and more restrictive for me-too drugs that add nothing to the existing arsenal. The overall effect is that French patients get access to new cancer drugs, immunotherapies and biological treatments significantly faster than British patients.

Germany takes a different approach again. Since the AMNOG reform of 2011, new drugs enter the market freely at the manufacturer's price for the first year. During that year, the Federal Joint Committee conducts a benefit assessment. If the drug is found to offer additional benefit over existing treatments, the manufacturer negotiates a price with the GKV-Spitzenverband (the umbrella body of the statutory sickness funds). If no additional benefit is found, the drug is placed in a reference-price group with existing treatments. The result is faster initial access than in either Britain or France, combined with effective price control once evidence has accumulated.

Under a social insurance model, the United Kingdom should replace NICE's gatekeeping role with a body that combines the French and German approaches. New drugs with evidence of significant therapeutic advance should be available within months of regulatory approval, at prices negotiated between insurers and manufacturers. The cost-effectiveness threshold should be raised to a level comparable to France and Germany — roughly €40,000 to €50,000 per QALY — reflecting the fact that a wealthier society can and should be willing to pay more for treatments that extend and improve life. Drugs that fail to demonstrate meaningful benefit over existing alternatives should face the same rigorous price control that Germany applies through its reference-pricing system.

The pharmaceutical industry's willingness to launch new drugs in a market depends in part on the prices that market will pay. The UK's position as one of the lowest-priced major markets has contributed to a pattern in which manufacturers launch first in Germany and the United States, later in France and sometimes not at all in the UK. A more competitive pricing framework — still regulated, still negotiated, but not as restrictive as the current NICE regime — would make the UK a more attractive launch market and reduce the delays that currently leave British patients waiting years for treatments their continental peers take for granted.

An elderly person who has a stroke is treated in hospital by the NHS, free of charge. When she is medically fit for discharge but needs help with washing, dressing and eating — because the stroke has left her partially paralysed — she enters the social care system, which is means-tested, poorly funded and in many parts of the country barely functional. If she has savings above a modest threshold (currently £23,250 in England), she pays for her own care. If she owns her home, its value may be counted against her. The clinical care that saved her life costs her nothing. The daily care that makes her life liveable may cost her everything.

This boundary between health and social care is the single most destructive feature of the English welfare system. It produces the phenomenon known as bed-blocking — patients who are medically fit for discharge but remain in hospital because there is no social care placement available for them. In the winter of 2023–24, an average of more than 12,000 hospital beds per day were occupied by patients who did not need to be there. Each of those beds cost the NHS roughly £400 per night — vastly more than the cost of the care home or home-care package that would have freed it. The system wastes money on expensive hospital beds because it will not spend money on cheaper social care. This is not a policy. It is an absurdity.

Germany solved this problem in 1995 with the introduction of Pflegeversicherung — long-term care insurance. Every person enrolled in the statutory health insurance system is automatically enrolled in long-term care insurance, funded by a payroll contribution (currently 3.4 per cent of gross salary, split between employer and employee). The insurance pays for care in nursing homes, assisted living and domiciliary care, with benefits graded according to the level of need as assessed by the Medical Service of the Health Insurers. It does not cover the full cost in every case — many Germans still contribute from their own resources towards a care home — but it removes the catastrophic financial risk that the English system imposes on families.

France takes a different approach through the Allocation Personnalisée d'Autonomie (APA), a universal benefit for those over 60 assessed as having lost autonomy. It is not insurance-based but is funded from a mix of national solidarity contributions and departmental budgets. The benefit is not means-tested for eligibility — all who qualify on the basis of need receive it — though the amount of co-payment varies with income. The French system is less generous than the German one in terms of total coverage but avoids the cliff-edge means-testing that makes the English system so destructive.

The proposal for the United Kingdom is to fold social care into the mandatory insurance system. Long-term care insurance should be a compulsory component of the health insurance contribution, as in Germany, adding an estimated 2 to 3 percentage points to the payroll rate. This would fund a defined entitlement to care — domiciliary, residential and nursing — assessed on the basis of need by the same independent body that determines the basic health insurance package. Means-testing would be abolished for care covered by the insurance. Those requiring care beyond the insured level would pay from their own resources, but the catastrophic risk — the prospect of losing one's home to fund a care placement — would be eliminated.

Employer contributions towards long-term care insurance deserve particular attention. Both the German and the French systems place a share of the cost on employers, on the principle that a workforce in good health — including one whose elderly relatives are properly cared for, reducing the burden of informal caregiving on working-age adults — is more productive. The precise split between employer and employee is a matter for negotiation, but the principle that employers share the cost is well established in continental practice and should be adopted here.

No honest advocate of this reform can pretend that dismantling the NHS and replacing it with a social insurance system is a simple undertaking. The undertaking would be the most significant structural reform of the British state since the creation of the welfare state itself — a decade at minimum, more likely a generation. It would require sustained political will of a kind that British politics has rarely produced, and would face opposition of extraordinary ferocity from those who have built their careers and their identities around the existing system.

None of this is a reason not to do it. It is a reason to be honest about the difficulty and to plan the transition carefully rather than pretending that the journey from a tax-funded monopoly to a pluralistic insurance system can be accomplished by a single Act of Parliament.

The transition should begin with the insurance infrastructure. The regulatory framework for health insurers — community rating, open enrolment, portability, risk equalisation — must be legislated and the regulator established before any patient is asked to choose an insurer. This is preparatory work that can begin immediately and that need not disrupt the existing system at all. Germany spent several years building its regulatory architecture before the modern Gesundheitsfonds (health fund) came into operation in 2009.

The payroll contribution should replace National Insurance over a defined period. Employees would see a new line on their payslip — "Health Insurance" — and the corresponding National Insurance rate would fall by the same amount. For most employees, the net effect on take-home pay would be minimal in the early years. The difference is transparency: the money is visibly going to health insurance, not disappearing into the general tax pool.

NHS trusts should be converted into independent public providers over a period of five to seven years. During the transition, they would continue to receive public funding but would begin billing insurers for a growing proportion of their revenue. By the end of the transition period, all providers — public and private — would derive their income from insurance payments rather than from government grants. Staff would retain their employment rights; pension obligations would be honoured. The change is in the funding mechanism, not in who owns the hospital or who works in it.

GP practices would transition more quickly, as they are already semi-independent businesses. The shift from an NHS contract to an insurance billing model is operationally simpler for a GP surgery than for a major hospital trust. A phased rollout — beginning with willing practices in areas where the insurance infrastructure is most developed — would allow lessons to be learned before national implementation.

The political obstacle is the greater challenge. The NHS is not merely a healthcare system; it is a national totem. Politicians who propose its replacement will be accused of wanting to "privatise" or "Americanise" healthcare — charges that are factually wrong but rhetorically devastating. The answer is not to avoid the argument but to make it relentlessly, with evidence, pointing always to France and Germany and Australia rather than to the United States. The question is not "do you want American healthcare?" — nobody does. The question is "do you want French healthcare, or German healthcare, or Australian healthcare?" Because those systems are better than ours, and we can afford them, and there is no good reason not to have them except that we have allowed sentiment to take the place of thought.