01 February 2008
NHS productivity is still falling by an average of 2% a year, despite the extra billions of pounds that have been pumped into the health service in recent years, official statistics have revealed.
Figures from the Office for National Statistics, published on January 29, show that from 2001 to 2005 the volume of activities, such as operations and GP consultations, has increased and the quality of care has improved by around 4% per year.
However, they have failed to keep pace with the increases in inputs – resources – which have grown by 6.5% a year over the same period.
In 2006, the most recent year for which figures are available, the decline in productivity slowed sharply to 0.2% as growth in staffing levels and pay fell back.
These productivity figures, which are based on a new methodology developed over the past two years, take account of improvements in service quality, such as whether patients get better more quickly. Without this being factored in, the ONS said, the fall in productivity between 2001 and 2005 would have averaged 2.5%.
The revised methodology also factors in improvements in how patients rate their experience. But the ONS revealed that this had not had any impact on productivity, because improvements to services had not generated a corresponding increase in patient satisfaction.
Previous ONS statistics on NHS productivity were attacked by the then health secretary John Reid, who claimed the methodology failed to capture improvements in services.
Aileen Simpkins, head of the ONS's centre for the measurement of government activity, told Public Finance the current figures were the best available measurement of NHS productivity, although work would continue to develop the methodology in future years. 'We think our figures are fit for purpose,' Simpkins added.
David Nicholson, the NHS's chief executive, said: 'The ONS's findings are useful in the wider debate about productivity and efficiency in the NHS. But as the ONS itself admits, any single measure of productivity is unlikely to capture all the costs and benefits of health care services.'
He added: 'We note that the ONS article shows a significant upturn in performance in 2006, even without quality adjustment… we are confident this improvement will be sustained.'
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