Hospital productivity has plummeted

16 Dec 10
Increased NHS funding over the past ten years has not been used as effectively as it could have been, the National Audit Office has found.

By Jaimie Kaffash

17 December 2010

Increased NHS funding over the past ten years has not been used as effectively as it could have been, the National Audit Office has found.

A report published today by the spending watchdog says there has been an average decline in hospital productivity of 1.4% a year since 2000. Across the entire health service, productivity declined by 0.2% each year.

NHS expenditure increased by two-thirds over the same period, at the start of which the NHS Plan was introduced to try to boost efficiency.

Auditor general Amyas Morse said most of the extra cash was used to fund higher pay and increases in staff numbers. 

The report Management of NHS productivity warns that there will need to be a 6% annual increase in productivity across the health service if the required efficiency savings of £15bn–£20bn are to be made by 2014.

Margaret Hodge, chair of the Public Accounts Committee, welcomed improvements that had been made in the NHS since 2000 – such as reduced waiting times and lower rates of hospital-acquired infections.

But she added: ‘It will be of concern to every citizen that the substantial increases in NHS funding over the decade have not been used as efficiently as they could.

‘With the rate of increase in NHS resources set to slow markedly, the Department of Health now needs to ensure that hospitals focus as much on delivering value for money as they have on meeting targets and improving outcomes.’

John Appleby, chief economist at the King’s Fund think-tank, said the NAO findings were not ‘a counsel of despair. As the report points out, there are significant opportunities for the NHS to improve productivity, especially by reducing variations in clinical performance between frontline teams delivering health care.’

Dr Hamish Meldrum, chair of the British Medical Association, added: ‘Productivity in health care is not just about crude numbers. It should be noted that other recent research, which took into account quality indicators such as reductions in cancer mortality rates, found that NHS productivity growth had been positive.’

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