NHS productivity still falling, says PAC

15 Mar 11
MPs today criticised declining levels of productivity in the NHS, saying taxpayers are getting less for each pound spent than they were ten years ago.
By Vivienne Russell


15 March 2011

MPs today criticised declining levels of productivity in the NHS, saying taxpayers are getting less for each pound spent than they were ten years ago.

Over the decade from 2000/01, NHS spending increased by 70% but productivity fell by average of 0.2% a year, and by an average of 1.4% a year in hospitals, according to the Public Accounts Committee.

The PAC report defines productivity as the ratio of volume of resources or inputs to the quantity of health care provided (outputs), adjusted to reflect relative costs and quality.

PAC chair Margaret Hodge said: ‘The Department of Health will now have to work to reverse the trend of falling productivity if it is to meet its ambitious revised target of achieving, by the end of 2014/15, savings of up to £20bn each year.’

She identified national pay contracts as a key problem. These had not been used to manage staff effectively, she said.

‘It is indicative of this that consultants’ productivity has fallen at the same time as they have had significant pay rises.’

But doctors’ leaders said ‘crude’ measures of productivity did not take into account improvements such as allowing doctors to spend more time with patients as well as falls in waiting times and reduced mortality rates.

Paul Flynn, deputy chair of the British Medical Association’s consultants’ committee, said: ‘Although this report talks about “significant pay rises”, consultants’ salaries have been frozen for two years. We agree that new ways of working are necessary if the NHS is to achieve the efficiency savings demanded of it. However, knee-jerk responses – such as cutting the time consultants can spend on the development of new services – are likely to be counterproductive in the long term.’

Jo Webber, deputy director of policy at the NHS Confederation, agreed that productivity measures often missed a lot of what the NHS does.

She said: ‘We agree that there is a pressing need for a more accurate measure of productivity and that more needs to be done to produce comparative information about performance. But no one should underestimate how complex it is to get this right.  

‘Our members have told us they are relentlessly focused on finances and on getting as much value as possible for every pound. No one should be in any doubt that this is the prime concern for the NHS right now.’

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