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Rising health spending ‘is affordable’

Ministeral claims that the NHS will become 'unaffordable' if not reformed have been undermined by an analysis  by a top economist published today.

Writing in the BMJ, chief economist for health policy at the King's Fund John Appleby says that even healthcare spending in the UK continues at its current level it will still be comparable to other major EU countries and  ‘will be a matter of choice, not affordability'.

Lansley predicts that health spending will rise to £230 billion in the next couple of years but Appleby points out that this figure could well be a proportionate increase.

In an article for the Daily Telegraph in June, Andrew Lansley said of NHS spending in England: 'If things carry on unchanged, this would mean real terms health spending more than doubling to £230 billion... This is something we simply cannot afford.'

But Mr Appleby says if the economy grows by 2.5%, and England continues to take the same share of GDP then Lansley's figure represents just 10.9% of projected GDP in 2030 - 12.4% if private healthcare spend is included in this percentage.

Even in 2009, seven of the EU-15 countries spent over 10% of GDP on healthcare. The highest spender, the Netherlands, devoted 12% of its GDP to healthcare.

Mr Appleby writes: ‘The real question to ask about health spending is what we think we might get in return as a result of forgoing the benefits of spending increasing amounts of our wealth on other things,' Appleby concludes.

‘For example, is the two year increase in life expectancy at birth we are likely to enjoy from higher health spending worth the benefits we will not get to enjoy from spending more on education, food, or housing?'

BMJ 2011; published online 12 July 2011