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News archive - March 2013

NHS struggling to translate savings into productivity improvements

NHS struggling to translate savings into productivity improvements

NHS EFFICIENCY measures are failing to boost staff productivity, according to the Nuffield Trust.

A new report from the think tank examines patterns of spending and labour productivity, drawing on the accounts data of strategic health authorities, hospital and mental health trusts, and commissioning organisations. Following a small improvement in 2010/11, the figures for 2011/12 show a slight decline in labour productivity.

Larger NHS and foundation trusts tend to have somewhat lower labour productivity, suggesting the existence of diseconomies of scale, says the Trust. This finding implies that managers and policy-makers should carefully review the impact of potential trust mergers on staff productivity.

Looking at aggregated spending, the analysis shows that funding for community health services has increased rapidly in line with Government policy. Yet despite efforts to move care closer to patients, spending on hospital care has also grown rapidly at an average of 5.2% over the last five years while spending on GP services has seen a real terms decline.

Report co-author and the Trust’s chief economist Anita Charlesworth said underlying hospital labour productivity remains stubbornly stagnant, though analysis of variation among regions and the success of workforces with more medically qualified staff, suggest ways in which this pattern might finally be broken. “We will overlook opportunities to meet the efficiency challenge unless we pay close attention to where and how the NHS spends money, and what we get for it.”

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