The NHS needs to be more productive – or is it more efficient?

David Maguire writing at the King’s Fund – Stop reading this and get back to work – you need to be more productive. Or is it more efficient?




In the long-term plan, NHS England sets out a goal of achieving at least 1.1 per cent increases in productivity over each of the next five years. But there’s often confusion about the term ‘productivity’ and what it really means, with efficiency and productivity often used interchangeably despite meaning very different things. In the simplest terms, an increase in productivity is when a business makes more of a product (in the case of the NHS, it would be more “care”- doing more operations, for example) using the resources they have available. Efficiency, however, relates to the quality of the work being done – so producing the same, but at a lower cost to the NHS or with less waste.

NHS England and NHS Improvement have spent the past few years focusing on pushing the NHS to the limits of what can be efficiently achieved with the resources available. And it’ll use some of the additional £20.5bn in the funding settlement to get more of the same with the resources available, improving efficiencies in staffing, estates, equipment etc. But there’s a limit to what you can do with those resources, and that’s where productivity should come in.

If you look at the Office for National Statistics’ recent trend in public service healthcare productivity in England, 1.1 per cent per year doesn’t seem like an unrealistic target on the surface. Keep in mind this is productivity, and does not include the cost saving targets of around 4 per cent given to providers of hospital and other frontline services in recent years. The chart below shows that productivity increased by 2.1 per cent per year on average between 2010/11 and 2016/17. In fact, there was only one year of negative growth between 2002/03 and 2016/17.

Healthcare Productivity

Source: Office for National Statistics

The most significant gains since 2010/11 came from the extent of wage restraint in the NHS keeping input costs down. By keeping wage growth much lower than the increase in the number of people being cared for, the NHS was able to see big increases in the amount of care provided relative to the cost of each staff member or piece of equipment. With wage restraint ending and a big recruitment drive outlined in the long-term plan, how is this trend going to be maintained? If you look at the post-Francis Report period in Figure 1 (2012/13), you can see that the last significant NHS recruitment drive slowed productivity growth as labour costs rose at a faster rate.

For the next 2 years, the long-term plan outlines 10 priority areas for productivity growth. Most of these have already been enacted or announced – such as capping spending on agency staff, improving procurement, networking pathology and diagnostic services, improving value for money in prescription spending and reducing the number of clinically ineffective treatments. Future plans to increase productivity include a greater emphasis on using digital technology in community health services, a drive to reduce administrative costs and the publication of a 10-year national strategy to reduce patient harm.

The agency staff cap has provided significant savings to the NHS, with trusts spending more on bank than agency shifts, at least in nursing. In the future though we can expect to see the percentage of this saving fall as that form of staffing becomes less common. At the same time, absence due to stress and mental health issues has increased to record levels in recent years among nursing staff. How can we expect staff to work even harder in their time on shift?

The NHS has been working to reduce prescription costs and has produced huge savings over time through better use of generic drugs (though drug costs have been increasing in recent years, thanks to big increases in the cost of certain generic drugs). Similarly, waste in procurement and variation in prices paid for supplies could also open up significant savings, following on from NHS Improvement’s Model Hospital programme.

Less clear is the impact that technology will have on the productivity of the NHS. There are plans to digitise some services in the community across mental and physical health as well as primary care, but the evidence on the likely return on this investment is mixed. Individual schemes have shown cost-effectiveness, but the success of many digital technology schemes depends on a range of cultural factors, including the clinical model at work and engaging clinicians and other staff.

The thing is, of all the activities I’ve listed, in practice it’s likely only the digital technology schemes that would potentially increase productivity as opposed to efficiency. Despite referring to these changes as improvements for productivity and efficiency, most of the schemes outlined in the long-term plan focus on improving how the NHS provides more of the same care with the same workforce, rather than transforming the possibilities of what staff can do.

If the NHS continues to focus on the same schemes and improving efficiency it’ll see smaller and smaller returns until there’s little left to gain. As we and others have said, the funding settlement is only enough to maintain existing services at their current level, not provide enough additional funding to help transform how care is provided.

Productivity may have to wait, efficiency calls.



Health inequalities and the NHS

Many speeches have been given to mark 70 years of the NHS. They have rightly celebrated the considerable achievements of this much-loved institution. Few though have mentioned the origins of the NHS in the Welsh valleys. It was the experiences of those here, unable to afford access to doctors and medicine, which shaped the vision for today’s NHS.

In 1915, the Tredegar Workmen’s Medical Aid Society was set up by, and for, the people of Tredegar, a mining community in South Wales. The people of Tredegar were pioneers. What they did went beyond anything that had gone before. They provided the inspiration for Aneurin Bevan, a local MP, who as Secretary of State for Health went on to design the new national health service in the same fashion.

It’s often repeated that the NHS is a ‘religion’ for the British people. The fundamental belief underpinning it, common to young and old, is in free health care for all. I believe this is because we have a visceral memory of the suffering and cruelty people experienced before the health service was founded. And a memory that, of all the public services we enjoy today, the NHS is ours because we designed it.

National Helth Service

The impact of the NHS on the nation’s health has been transformational. Decade after decade, life expectancy and health outcomes across the board have improved. Something created by a community with relatively little has benefited everyone, including the middle classes and the wealthy.

And yet today this situation is in danger of being reversed, with the primary benefit for the better off and the poor being left behind. In the 10 years since the publication of The Marmot Review, health inequalities appear to be widening. Shifting trends in life expectancy, and a widening gap between rich and poor, are of deep concern. Recent data published by the ONS indicates that, for those living in Herefordshire, the average disability-free life expectancy is 71 years. However, if you live in Tower Hamlets in East London, your disability-free life expectancy is 55 years. Unless the NHS makes a significant investment in preventive services, the gap between rich and poor will likely continue to grow.

In his speech to NHS Expo 2018, Simon Stevens referenced the twin needs to work towards narrowing the life-expectancy gap and to measure the impact of NHS services on reducing this divide. Not only is there a huge injustice happening here but it’s also costing us all a lot of money. The cost to the NHS of failing to provide comprehensive preventive services to people living in poor communities is huge – £4.8 billion a year according to York University’s Centre for Health Economics.

One response is the idea that people should ‘take responsibility for their own health’. This is part of what preventive services are about. But without explicit reference to the relationship between poverty and poor health, there’s a risk that this will become a political slogan that undermines and marginalises people living in poverty. Dr Andy Knox wrote an insightful blog recently about involving communities in the design and delivery of services to tackle health inequalities in Morecambe Bay. He rightly reflected that improving health and wellbeing is far easier for some individuals and communities than for others.

On a recent visit to Turning Point’s integrated healthy lifestyles and Improving Access to Psychological Therapies (IAPT) service in Luton, Total Wellbeing, I was impressed by the team’s work. This service is supporting people to learn new skills and motivating them to make changes to their lifestyle, keeping people out of hospital. Services like these – treating people holistically and recognising the impact of the wider determinants of health and the relationship between mental and physical wellbeing – can genuinely empower people to take responsibility for their own health.

It’s my belief that we are failing to shift resources towards prevention because the NHS is no longer run by, and for, the people. Our national health service is highly complex and in so many ways so much more sophisticated than it was in 1945. But, communities are no longer involved in the design and oversight of bespoke local health services as they were with the Tredegar Workmen’s Medical Aid Society. There are some pockets of good practice in terms of community involvement but mostly this is tokenistic, under-resourced and unable to make much impact on how services are delivered. When it’s done well, community involvement takes time, effort and resources – but will pay dividends by enabling services to work more effectively in the longer term.

One good example is Turning Point’s Connected Care model, which provides skills for local people to work alongside commissioners to redesign health and social care services and test new ways of working. Across the country we trained 250,000 local people, including by sharing information about health inequalities facing the local community. Our experience of applying this approach in diverse communities across the country is that people want to get involved in the design and delivery of preventive services. Sadly, this and other similar approaches such as those documented in Public Health England’s A guide to community-centred approaches for health and wellbeing are simply not incentivised in a system that continues to reward hospitals for treating people rather than keeping them healthy.

We need to learn or re-learn the lesson that the creation of the NHS teaches us: the NHS cannot be imposed on people but must be developed with them – and it has to change with them too. In my mind, devolved health and social care budgets, overseen by democratically elected representatives as in Greater Manchester, provide the greatest potential to make this a reality. There’s a long way to go but this is how we will ensure that local people are involved in the design and delivery of local services that genuinely meet their needs. We need services like the Tredegar Workmen’s Medical Aid Society – services run by, and for, the people.

Source: Lord Victor Adebowale writing at The King’s Fund