Judging productivity measures in the NHS

As the demands upon the NHS increase, it needs to harness technology and drive out waste to be more productive.  More targeted and effective drugs and keyhole surgery have done that and in some maternity wards, expectant mothers barely have time to warm the bed sheets before, babes in arms, they are in their taxis going home. 

Yet in all the debate about funding, there has been little if any discussion of productivity, how should it be measured or how it should be enhanced.  The health lobby has politicked its way to more funding without any commitment to the better use of that funding.  Both nationally and for secondary care (hospitals) productivity should be the key metric: how much is spent matters less than the money being spent as well as it could be.

Measuring healthcare productivity, i.e. dividing the multivariate outputs by the inputs, is not easy. The Office for National Statistics takes the outputs to be:

  • Hospital and Community Health Services (HCHS) – includes hospital inpatient, outpatient and day case episodes
  • Family Health Services (FHS) – includes General Practitioner (GP) and practice nurse consultations, publicly-funded dental treatment and sight tests
  • GP prescribing – includes all drugs prescribed by General Practitioners
  • Non-NHS provision – including services funded by the government but provided by the private or third sector

And then they adjust the output quantities for quality:

  • The extent to which the service succeeds in delivering its intended outcomes: for HCHS services, this is measured using short-term survival rates2, health gain following treatment in hospital and changes in waiting times; and for primary care, this is measured with a selection of measures from the GP Quality and Outcomes Framework, including measures for the percentage of certain groups of patients meeting target ranges for blood pressure"
  • The extent to which the service is responsive to users’ needs: National Patient Survey.” 

The ONS compounds the input figures from:

  • Labour inputs, ideally measured in hours worked, are differentiated by type of labour, for example, we distinguish between doctors, nurses and other staff
  • Goods and services used up in production, such as heating and lighting costs, textbooks, bandages and dressings 
  • The cost to the government of the activities performed by private sector providers of healthcare, such as independent treatment centres or hospitals made available under the private finance initiative
  • An estimate of the annual use of fixed capital assets, such as the school and hospital buildings and the IT equipment”

All that complexity makes the results hard to believe when the productivity metrics swing wildly year to year for no obvious reason.  From the turn of the millennium to 2003 productivity changes fluctuated wildly between of -.3%, +2.8%, -2.2% and +1.3%. These outcomes show no correlation with outputs or inputs.  

Given the stable total workforce and steady march of government funding the figures should be more consistent but they are not. We can be sure about one thing about the NHS: it is very big and like most other big things, seen as a whole, it changes slowly and so should credible measures of productivity.  

The second two of the three inputs are what the government spends on healthcare apart from labour. The only difference, therefore, between the ONS definition of the total input and the cost of healthcare is using the time the workforce uses, and the cost of that time. It would be more realistic simply to use total healthcare cost – possibly adjusted by inflation – as the denominator. It would both be more honest and more stable.

The government made a serious mistake this month by promising large increases in funding without gaining specific undertakings on productivity.

Perhaps the increased funding was a political necessity – but putting in more money without achieving more outputs, simply reduces productivity.

Bed blocking is a prime example.

According to the Government Statistical Service, nearly 2 million NHS England beds were occupied a day more than they need have been. With NHS England having just over 130K beds, blocking occupies about 4% of hospital beds throughout the year. As hospitals take two thirds of the NHS budget, that alone wastes about 2.7% of the NHS budget (or £3bn if you prefer straight number costs), according to Lord Darzi.  

Social services usually get the blame for bed blocking but 58 per cent in 2016/17 were due to the NHS' own inefficiencies and the clock only starts when all the medics have signed off and the admin has been completed – often another two days. I am far from alone in insisting, twice recently, on discharging myself when I was ready to go home. For those who do require ongoing care, the costs are about £50 per person/day compared with £400 in hospital. Saving a over 87% of the cost is not to be sniffed at.   

Advocates for reform have highlighted many other areas of waste in the NHS whose elimination would enhance productivity, reduce waiting times and enthuse patients and staff once they had gotten over their resistance to any change.

Let's not forget of course that reform has been offered. Simon Stevens promised of £22bn. efficiency savings but none were delivered. We don't need an NHS that over promises and under delivers. 

No. What we need now is clear commitment to specific NHS efficiency savings. They need to be simple, credible, and easily understood.

Yes, some budgest may have to rise. Social care will need money. Maybe up to £3bn from existing NHS budgets to get them to sort out bed blocking. And we estimate nearly another £1bn is available from unnecessary DHSC quangos. But right now we need to clarify how we're going to measure successes, else we could be pouring good money after bad and not even know it.