The total budget of the Department of Health in England in 2017/18 was £124.7 billion. £13.8 billion was spent on medicines. The
National Audit Office reports annually on the summarised consolidated accounts of the NHS. The population of England is aging, which has led to an increase in health demand and funding. From 2011 to 2018, the population of England increased by about 6%. The number of patients admitted to hospital in an emergency went up by 15%. There were 542,435 emergency hospital admissions in England in October 2018, 5.8% more than in October 2017. Health spending in England is expected to rise from £112 billion in 2009/10 to £127 billion in 2019/20 (in real terms), However, according to the
Institute for Fiscal Studies (IFS), compared to the increase necessary to keep up with a rising population that is also ageing, spending will fall by 1.3% from 2009–10 to 2019–20. This has led to cuts to some services, despite the overall increase in funding. In 2017, funding increased by 1.3% while demand rose by 5%. Ted Baker, Chief Inspector of Hospitals has said that the NHS is still running the model it had in the 1960s and 1970s and has not modernised due to lack of investment. The
British Medical Association (BMA) has called for £10bn more annually for the NHS to get in line with what other advanced European nations spend on health. In June 2018 ahead of the NHS' 70th Anniversary then Prime Minister
Theresa May announced extra funding for the NHS worth an average real terms increase of 3.4% a year, reaching £20.5 billion extra in 2023/24.
Jeremy Hunt describes the process of setting the NHS budget as far too random - "decided on the back of headlines, elections and anniversaries rather than on rational calculations of demand and cost."
The commissioning system From 2003 to 2013 the principal fundholders in the NHS system were the
primary care trusts (PCTs), which commissioned healthcare from
NHS trusts, GPs, and private providers. PCTs disbursed funds to them on an agreed tariff or contract basis, on guidelines set out by the Department of Health. The PCTs budget from the Department of Health was calculated on a formula basis relating to population and specific local needs. They were supposed to "break-even" – that is, not show a deficit on their budgets at the end of the financial year. Failure to meet financial objectives could result in the dismissal and replacement of a trust's board of directors, although such dismissals are enormously expensive for the NHS. In April 2013 a new system was established as a result of the
Health and Social Care Act 2012. The NHS budget is largely in the hands of a new body, NHS England. NHS England commissions specialist services and primary care. Acute services and community care are commissioned by local
clinical commissioning groups (CCGs) led by GPs. From April 2021 all CCGs have become part of Integrated Care Systems.
Free services and contributory services Services free at the point of use The vast majority of NHS services are free at the point of use. This means that people generally do not pay anything for their doctor visits, nursing services, surgical procedures or appliances, consumables such as medications and bandages, plasters, medical tests, and investigations, x-rays, CT or MRI scans, or other diagnostic services. Hospital inpatient and outpatient services are free, both medical and mental health services. Funding for these services is provided through general taxation and not a specific tax. Because the NHS is not funded by a contributory insurance scheme in the ordinary sense and most patients pay nothing for their treatment there is thus no billing to the treated person nor any insurer or sickness fund as is common in many other countries. This saves hugely on administration costs that might otherwise involve complex consumable tracking and usage procedures at the patient level and concomitant invoicing, reconciliation, and bad debt processing.
Eligibility Eligibility for NHS services is based on having
ordinary resident status, regardless of nationality.
Prescription charges Prescriptions for medication in England and Wales are subject to a fixed charge per item for up to three months' supply, regardless of the actual cost of the medicine. Some people qualify for free prescriptions. Higher charges apply to medical appliances. Pharmacies or other dispensing contractors are reimbursed for the actual cost of the medicines through NHS Prescription Services, a division of the NHS Business Services Authority. the NHS prescription charge in England was £9.35 per item (in Scotland, Wales and Northern Ireland there is no charge for items prescribed on the NHS). People over sixty, children under sixteen (or under nineteen if in full-time education), patients with certain medical conditions, and those with low incomes, are exempt from charges, subject to penalties for claiming exemption when not entitled. Those who require repeated prescriptions may purchase a single-charge pre-payment certificate that allows unlimited prescriptions during its period of validity. The high and rising costs of some medicines, especially some types of cancer treatment, means that prescriptions can present a heavy burden to the
primary care trusts, whose limited budgets include responsibility for the difference between medicine costs and the low, fixed prescription charge. This has led to disputes whether some expensive drugs (e.g.,
Herceptin) should be prescribed by the NHS.
NHS dentistry The position of dentistry within the NHS has been contested frequently. At the inception of the NHS, three branches of dental service were established: local health authority dental service; general practitioner service; and hospital dental service. Dental treatment was initially free at the point of use; however charges were introduced in 1951 for
dentures – leading to the resignation of the architect of the NHS and Minister for Labour, Aneurin Bevan in March 1951 – and in 1952 for other treatments. Dentists are private contractors to the NHS, which means practitioners must purchase and maintain the practice premises, equip the surgery, and hire staff to provide an NHS dental service. The contract between the NHS and dentists determines what work is provided for under the NHS, payments to dentists, and charges to patients. The contract is regularly revised – in 2003, the Government announced major changes to NHS dentistry, giving
primary care trusts (PCTs) responsibility for commissioning NHS dental services in response to local needs, and using NHS contracts to influence where dental practices were located, and in 2006 a new contract was introduced following Department of Health recommendations on how to cash limit NHS primary care dentistry. Professional bodies such as the
British Dental Association have complained that the 2006 contract changes introduced a remuneration system which fails to incentivize disease prevention, leading to declining patient outcomes and that radical reform was needed. NHS dentistry charges were: £20.60 for an examination; £56.30 for a filling or extraction; and £244.30 for more complex procedures such as crowns, dentures, or bridges. As of 2007, less than half of dentists' income came from treating patients under NHS coverage; about 52% of dentists' income was from treating private patients.
NHS Optical Services From 1 April 2024, the NHS Sight Test Fee (in England) was £23.53, and there were 13.1 million NHS sight tests carried out in the UK. For those who qualify through need, the sight test is free, and a voucher system is employed to pay for or reduce the cost of lenses. There is a free spectacles frame and most opticians keep a selection of low-cost items. For those who already receive certain means-tested benefits, or who otherwise qualify, participating opticians use tables to find the amount of the subsidy.
Injury cost recovery scheme Under older legislation (mainly the
Road Traffic Act 1930) a hospital treating the victims of a road traffic accident was entitled to limited compensation (under the 1930 Act before any amendment, up to £25 per person treated) from the insurers of driver(s) of the vehicle(s) involved, but were not compelled to do so and often did not do so; the charge was in turn covered by the then legally required element of those drivers' motor vehicle insurance (commonly known as
Road Traffic Act insurance when a driver held only that amount of insurance). As the initial bill went to the driver rather than the insurer, even when a charge was imposed it was often not passed on to the liable insurer. It was common to take no further action in such cases, as there was no practical financial incentive (and often a financial disincentive due to potential legal costs) for individual hospitals to do so. The Road Traffic (NHS Charges) Act 1999 introduced a standard national scheme for recovery of costs using a tariff based on a single charge for out-patient treatment or a daily charge for in-patient treatment; these charges again ultimately fell upon insurers. This scheme did not however fully cover the costs of treatment in serious cases. Since January 2007, the NHS must claim back the cost of treatment, and ambulance services, for those who have been paid personal injury compensation. In the last year of the scheme immediately preceding 2007, over £128 million was reclaimed. From April 2019 £725 is payable for outpatient treatment, £891 per day for inpatient treatment and £219 per ambulance journey.
Car park charges Car parking charges are a minor source of revenue for the NHS, with most hospitals deriving about 0.25% of their budget from them. Patient groups are opposed to such charges. and with Wales where car park charges were scrapped at the end of 2011.
Charitable funds There are over 300 official NHS charities in England and Wales. Collectively, they hold assets over £2 billion and have an annual income of over £300 million. Some NHS charities have their independent board of trustees whilst in other cases the relevant NHS trust acts as a corporate trustee. Charitable funds are typically used for medical research, larger items of medical equipment, aesthetic and environmental improvements, or services that increase patient comfort. In addition to official NHS charities, many other charities raise funds that are spent through the NHS, particularly in connection with medical research and capital appeals. Regional
lotteries were also common for fundraising, and in 1988, a
National Health Service Lottery was approved by the government before being found illegal. The idea continued to become the
National Lottery. == Outsourcing and privatisation ==