03 March 2006
Productivity in the NHS is at best stagnant, despite the record sums of money invested in the health service by the government, figures from the Office for National Statistics show.
The statistical agency's latest attempt to capture the relationship between investment in the service and the results achieved has found little evidence of improved quality of outcomes.
It has published productivity assessments of the NHS from 1995 to 2004 using a range of methodologies, but these have produced at best an average increase of just 0.2% a year.
Using the existing measure of productivity, the ONS, which released its findings on February 27, found that it had dropped by between 0.6% and 1.3% per year.
An alternative set of methodologies, using a wider range of NHS outputs such as survival rates, waiting times, and improvements in primary care, put the average annual change for 1995-2004 at between +0.2% and -0.5%.
Only when the ONS incorporated an external suggestion from Professor Tony Atkinson's review of public sector productivity to reflect the increasing value of good health to the economy did productivity show a sustained increase.
Atkinson recommended adjusting the value of NHS outputs to reflect rising real earnings in the economy, which was put at 1.5% per year. That methodology, which is already used by the Department of Health, led to an average annual increase in productivity of between 0.9% and 1.6% per year.
However, Atkinson warned that this adjustment should be used cautiously, and needed further consultation and analysis.
The ONS also took pains to highlight the limitations of these new methodologies, pointing out that they are based on a sample of NHS activities rather than the entire range.
Karen Dunnell, the national statistician, said the ONS would now launch a consultation jointly with the Department of Health to find an agreed method of measuring NHS productivity. 'Measuring value for money in the public services is of major importance to everyone,' she continued.
'But this needs to be seen as a staging post in an ongoing journey. What is now needed is a thorough public discussion of the methodologies involved.'
Health Secretary Patricia Hewitt said: 'The department is now working with the ONS towards an even more comprehensive measurement. We also want to ensure productivity grows further, whatever the basis of measurement.'
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