Healthcare expenditure, UK Health Accounts: 2019

• Total current healthcare expenditure in 2019 was £225.2 billion, equating to £3,371 per person.

• Total current healthcare expenditure in the UK accounted for 10.2% of gross domestic product (GDP) in 2019, compared with 9.9% in 2018.

• Total current healthcare spending grew by 4.0% in real terms in 2019, the strongest rate of annual growth since 2009.

• Government-financed healthcare expenditure grew by 4.0% in real terms in 2019 to £176.8 billion, making up 79% of total healthcare spending.

• Spending on total long-term care grew by 2.8% in real terms in 2019, slower than growth in total current healthcare expenditure.

Healthcare expenditure in 2019

In 2019 spending on healthcare in the UK totalled £225.2 billion, equating to £3,371 spent per person. This includes both government and non-government spending on healthcare.

Data in this bulletin presents detailed analysis of healthcare spending in 2019. More information on our provisional estimates of healthcare expenditure in 2020 is available in Healthcare expenditure, UK Health Accounts: provisional estimates for 2020.

Healthcare expenditure represented 10.2% of gross domestic product (GDP) in 2019, up from 9.9% in 2018. This increase is because of health expenditure growing at a faster rate than GDP. Health spending in nominal terms grew by 6.2% between 2018 and 2019, and by 4.0% in real terms when adjusted to account for inflation¹.

Most healthcare expenditure in the UK is financed by government

Government expenditure on healthcare, including spending by the NHS, local authorities and other public bodies financing healthcare, was £176.8 billion in 2019, equating to £2,647 per person or 79% of total current healthcare expenditure.

The largest of the non-government financing arrangements was out-of-pocket expenditure, accounting for 16% of overall spending or £35.7 billion. Voluntary health insurance accounted for 3% of overall spending on healthcare, or £6.3 billion, while non-profit institutions serving households (NPISH) and enterprise financing were the smallest financing schemes, accounting for 2% and less than 1% respectively.

Growth in healthcare spending in 2019 was driven by government expenditure

Adjusting for inflation, expenditure by all financing schemes aside from voluntary health insurance grew in 2019.

Government expenditure contributed most to the increase in overall healthcare expenditure in 2019. Given that government-financing accounts for the majority of healthcare spending in the UK, it tends to drive the direction of overall healthcare expenditure.

Notes for: Total current healthcare expenditure in the UK

1. Our real terms spending estimates are produced using the GDP deflator. As a general, whole economy price deflator, this is not a measure of average healthcare inflation, nor will it account for the variation in price inflation across different components of health spending.

Government healthcare expenditure increased by 6.2% in nominal terms and 4.0% in real terms in 2019, the fastest rate of real growth in government healthcare expenditure since 2009. The real terms average annual rate of growth in government-financed healthcare expenditure from 1997 to 2019 was 4.0%, with growth tending to be strongest during the 2000s.

Further information on government healthcare expenditure can be found in HM Treasury’s Public Expenditure Statistical Analyses (PESA). While the definition of healthcare differs to that used for the UK Health Accounts, PESA shows growth in government healthcare expenditure in the financial year ending (FYE) 2020 to be the highest since FYE 2010.

Care provided in hospitals accounts for the largest share of government healthcare spending

In 2019, the main provider type of government-financed healthcare was hospitals, making up 48% of government healthcare expenditure¹. Providers of ambulatory healthcare (otherwise known as outpatient facilities), including GP surgeries, dentists and home care providers, comprised a further 24% of government expenditure.

Outpatient curative and rehabilitative care accounted for 27% of government healthcare spending

In 2019, £48.5 billion was spent through government schemes on services providing curative or rehabilitative care for outpatients, growing by 2.1% in real terms compared with 2018.

Specialised curative outpatient care, which includes services delivered by specialist consultants and mental health practitioners in hospital and community-based settings, represented the largest share at 44% of spending. A further 37% of this expenditure related to general curative outpatient care, covering services delivered by A&E departments and GPs. The remaining outpatient spending related to other curative outpatient care (10%), dental care (5%), and rehabilitative care (4%), such as rehabilitative hospital treatments and community-based rehabilitative therapies. The predominant type of outpatient care varied across different provider settings.

Notes for: Government healthcare expenditure

1. Government healthcare spending by hospital providers is not equivalent to healthcare spending by acute NHS Trusts.

The type of healthcare spending differs between non-government financing schemes

Individuals' out-of-pocket spending represented the largest of the non-government financing schemes, at £35.7 billion in 2019. Individuals spent £15.3 billion on medical goods, accounting for 43% of out-of-pocket spending on healthcare, with a further 37% on health-related, long-term care services.

The remaining non-government healthcare financing schemes in the UK represented just 6% of overall healthcare spending in 2019. The type of healthcare purchased varied across different non-government financing schemes.

Long-term care expenditure accounts for services aimed at managing chronic health conditions related to long-term care dependency (including old-age and disability-related conditions) and reducing suffering where an improvement in health is not expected.

Total long-term care expenditure can be divided into:

• health-related long-term care, an element included within our measure of total current healthcare expenditure, relating to services where care ordinarily includes help with activities such as bathing, dressing and walking

• social long-term care, an element relating to assistance-based services, such as shopping, cooking and managing finances, which sits outside the definition of healthcare and so is not included in our measure of total current healthcare expenditure

When these elements are combined, total expenditure on long-term care in 2019 was £50.5 billion. This was an increase on 2018 of 5.0% in nominal terms, and 2.8% in real terms.

Health-related long-term care grew by 2.5% in real terms in 2019, compared with growth in social long-term care spending of 4.2%. Social long-term care spending is not included in our measure of current healthcare expenditure.

In 2019, 64% of total long-term care was financed through government and 26% through out-of-pocket funds, with the remaining services financed through charities. Government expenditure was the main means of financing both health-related and social long-term care in 2019, accounting for 65% and 60% of financing respectively.

Gross fixed capital formation (GFCF), is an estimate of net capital investment by both the public and private sectors in the UK. In 2019 the net capital outlay on healthcare in the UK was £6.8 billion. Investment in fixed assets is separate from the measurement of healthcare consumption and so is not a part of our headline current healthcare expenditure statistics.

Improvements and changes to data sources have resulted in revisions to the UK Health Accounts back series of no more than plus or minus 1.4% of total current healthcare expenditure. Further information on revisions is available in the UK Health Accounts reference tables.

For more information about the sources and methods used to produce the UK Health Accounts, please see UK Health Accounts: methodological guidance and Estimating the 1997 to 2012 UK Health Accounts time series – methodology guidance.

International comparability

The UK Health Accounts are constructed using standardised definitions drawn from the System of Health Accounts 2011 (SHA) framework. This framework is employed by all EU member states and most OECD countries, making health accounts the most suitable source for international comparisons of healthcare expenditure.

Timeliness

Sufficiently detailed data on healthcare functions and providers are only available at a two-year lag, limiting the timeliness of the UK Health Accounts. However, new provisional estimates of healthcare spending in 2020 are available in Healthcare expenditure, UK Health Accounts: provisional 2020 estimates.