Future funding and current productivity in Northern Ireland’s health and social care system

Like many developed countries, Northern Ireland is facing difficult questions about funding and sustainability in health and social care provision. 

On 7 September 2022, the Northern Ireland Fiscal Council, an independent body created in March 2021 to bring greater transparency and scrutiny to NI’s public finances, published its first annual assessment of the sustainability of NI’s public finances. As part of this major review, the Nuffield Trust was commissioned to carry out a review of sustainability in the health system, the Executive’s biggest budget item. 

Nuffield Trust looked at health and care funding, productivity, service performance and spending projections in Northern Ireland relative to other countries of the UK, with a focus on comparisons with the English NHS.

Key findings

Historic public spending

• Since 2002/3, on average, per capita health spending in Northern Ireland has been around 7% higher than England and around 4% lower than Scotland – though with wide fluctuations from year to year.
• As in the rest of the UK, health spending in Northern Ireland has grown significantly over time: total spending has increased by nearly 67% in real terms since 2002/3. That’s the second-largest increase among the UK nations after England. Per capita spending has increased by 63%, the highest across the four UK nations.
• Health spending also consumes a larger proportion of public spending than ever – increasing from around 16% in 2002/3 to 22% in 2019/20.
• Since 2016/17, public spending on social care across all age groups in Northern Ireland has been rising faster than the rest of the UK and per capita spending is now around a fifth higher than in Wales and Scotland, and 43% higher than in England.

Spending projections

• Across the different ways in which spending might be projected out to 2070, health care funding is likely to continue to rise relentlessly.
• A model based on population projections suggests an increase in demand for health care and, hence, in spending (if that need is met) of around 0.6% per year in real terms. Any adjustment for technological change is likely to produce a considerably faster increase. Actual real spending increases over the past two decades have been at 3.3%.
• While projections are subject to great uncertainty, it is likely that Northern Ireland will continue to face difficult choices about how to make this sustainable.
• Our projections show health and care spending increasing considerably as a proportion of the economy under most scenarios: if spending continues to rise at recent rates, it will also use an ever-increasing share of the block grant which funds all departmental budgets.

Performance and productivity

• A comparison of the costs of providing particular procedures in a hospital setting across the two countries suggests that Northern Ireland has considerably higher costs than England.
• Northern Ireland spends 25% more on elective inpatient care than it would if it provided the same mix of treatments at English costs, and 33% more on long-staying emergency patients.
• Around a third of higher costs are attributable to Northern Ireland’s higher rate of ‘excess’ bed days, where patients who might normally stay between one and three nights are instead in hospital longer than is usual for the procedure in question.
• A lower proportion of patients in Northern Ireland are cared for as single-day or short overnight-only patients than in England, adding to higher relative costs. These reflect data showing generally somewhat longer lengths of hospital stay in Northern Ireland.
• Overall, estimates suggest that compared to an equivalent mix of patients, Northern Ireland's elective, non-elective and outpatient activity cost £410m more than England's in 2019/20.
• Since 2016, unit costs of hospital care have risen by around 28% in Northern Ireland, as opposed to 7–8% in England.
• Northern Ireland has 35% more registered nurses in total than England relative to the size of its population, and likely a lower rate of admissions per nurse. Precise estimates are impossible because of limited data collection.
• Hospital beds in Northern Ireland are run at a slightly lower rate of occupancy, though the level of crowding in England is undesirable.
• However, indicators of inefficiency do not only point in one direction. Northern Ireland prescribes a higher proportion of generic medicine, implying better use of pharmaceutical budgets, although its per capita spend is much higher. The crude output of admissions per hospital doctor is similar.