DATA BRIEFING: What would happen if the UK moved from a tax-based health system to one that is insurance based? John Appleby points out some of the misinformation being peddled by the campaigners

Britain's Third World tabloid newspapers have for some time kept up a relentless line in bashing the NHS. More recently, they have started to suggest that the way the NHS is funded is the root of the problem with its performance.

The argument - such as it is - to support this diagnosis seems to be: the NHS needs more money, but taxpayers are unwilling to vote for political parties pledging to spend more (especially if this means higher taxes).

If the problem is diagnosed as the funding source, then the prescription is obvious: change the way health care is paid for. But what system would be best? Even the Daily Mail baulks at suggesting outright privatisation of the NHS, where we would all pay or rely on private insurance. Instead, social insurance appears to be the funding system of choice - and not, it should be noted, only for those on the political right. A number of leftleaning groups/think tanks and individuals have also mooted an interest in social insurance: perhaps It is the conjunction of the leftish-sounding word 'social' and the more rightish sounding 'insurance' that has attracted the third wayers.

Two problems are evident in the polemics on social insurance. The first is a problem with facts. Proponents of alternative funding systems often suggest that the UK is unique (or in a very small minority of countries) in the way it pays for healthcare. This is not the case. All countries are to some degree pluralistic in the way healthcare is paid for. In the UK, tax funding dominates; in the US most assume that private insurance dominates. But in fact, tax financed subsidies and direct government spending on healthcare account for most US spending.

In western Europe, while around seven countries (including Germany, France, Austria, Belgium) have well-established versions of social insurance systems, another seven (including UK, Sweden, Norway, Finland) rely on taxes.

The second problem concerns difficulties with describing what kind of social insurance system the UK should adopt. Often, social insurance is suggested as if it were a single system. In fact, there are many possible variants. For example, some involve a high degree of compulsion while others are more flexible.

Some systems enjoy/bear a high degree of government regulation and 'topping up' of funds from the tax system. In Belgium, for example, around 40 per cent of total healthcare spending is from taxation.

Some social insurance systems are organised around occupational groups, others are geographically based. And in some countries, the system lays down a minimum benefits package, while other countries have choices of schemes.

The point about all this is that the detail of a social insurance scheme matters - not only in terms of the choice available to patients, but in terms of the micro incentive systems different schemes work under. How providers are paid, the number (and organisational set up) of insurance funds, and so on, all contribute to the overall performance of a healthcare system.

Of course, if underfunding (not source of funding) is the real problem with the NHS, the fact that the last two general elections appear to contradict the psephological 'law' that voters will not vote for governments promising to spend more on healthcare (especially if it involves higher taxes) suggests that social insurance proponents have misdiagnosed.