22 October 2004
The Statistics Commission has questioned the value of NHS productivity figures published this week because they do not include 'crucial' changes in the quality of services.
The independent watchdog, which oversees the Office for National Statistics, told Public Finance that the methodology used to assess public sector outputs failed to give a full picture.
Commission chief executive Richard Alldritt said the review by Sir Tony Atkinson of government statistics, which delivered its interim report in July, had identified measures of quality as the key component of meaningful output figures.
At the moment the methodology captures input and activities, such as the number of operations, but does not assess the resulting changes to the quality of services.
'The activity measures have been improved, but there are considerable questions over where we are in terms of measures of output. The figures are still a long way short of what you would want, ideally, as a measure of that,' Alldritt told PF. 'Quality measures are needed, but they don't currently exist in a usable form.'
He was responding to the publication by the ONS of productivity figures for the NHS, compiled using a range of revised methodologies. Embarrassingly for ministers, all eight models showed that NHS productivity had fallen by between 3% and 8% from 1995 to 2003, despite the extra billions of pounds poured in by Labour.
The ONS also found that although costs had risen by up to 39% over that period, outputs – measuring activities rather than quality – had increased by only 28%. These figures imply that the NHS is becoming increasingly inefficient.
Health Secretary John Reid condemned the ONS's findings. 'It is absurd that the current measure of productivity does not cover the range of massive improvements that are being seen across the NHS,' he said.
Chief statistician Len Cook, who announced earlier this month that he will stand down at the end of next year, said the figures were not definitive. 'Measures of productivity need to be interpreted with care, there are no simple or unique answers,' he said.
Nigel Edwards, head of policy at the NHS Confederation, told PF that the ONS findings were the product of a perverse statistical model. 'Once the damage caused by the historic lack of investment had been repaired, the extra money was targeted at improving the quality of treatment rather than the quantity. But it is quantity that has been measured.'
PFoct2004
