Further supplementary memorandum from
the Chief Executive, NHS Department of Health
As David Nicholson promised, I would like to
share with you the findings of the recent publication of the Centre
for Health Economics (CHE) at York University led by Professor
Andrew Street on NHS inputs for the period 2003-04 to 2007-08.
The report includes figures on NHS productivity for the period
2003-04 to 2006-07.2 Productivity is measured by comparing the
rate of output growth with the rate of input growth. It shows
an increase in NHS productivity for the most recent years (2004-05
to 2005-06 and 2005-06 to 2006-07).
Since 2000-01 there has been strong input growth,
with significant investment in new staff, equipment and buildings.
Meanwhile output growth has lagged behind input growth. This is
unsurprising since investments take time to bear fruit. Even so,
year-on-year increases in the number of patients treated meant
that output growth averaged more than 3.7% per year up to 2003-04.
The net effect, though, was negative productivity growth up to
2003-04.
This latest publication shows that the trend
has since changed. NHS output has continued to rise, but at a
faster rate, averaging 5.5% per year between 2004-05 and 2006-07.
Not only are more patients being treated, but the quality of the
care they receive has been improving. For example:
— Waiting times have been falling,
both for outpatient appointments and for admission to hospital.
— Survival rates have been improving
for patients admitted to hospital whether as electives or non-electives.
— Improved disease management in primary
care, brought about largely by the Quality and Outcomes Framework,
has led to reductions in blood pressure for patients suffering
chronic heart disease, stroke and hypertension.
There has also been a slowdown in input growth
since 2003-04. This is primarily the result of a levelling off
in staff recruitment and less reliance on the use of agency staff.
As a consequence recent NHS productivity growth has been positive
or, at worst, constant.
Although this is positive news, it is not the
end of the story. Although we are at the forefront of international
efforts to better measure health care productivity, this is an
inherently difficult task. The Department will continue to work
closely with CHE and ONS to improve the measurement of NHS output,
input and productivity.
Next year CHE will produce some estimates of
productivity at sub-national (Strategic Health Authority) level.
These estimates will help us to better understand the drivers
of productivity in the NHS. Furthermore, when patient reported
outcome measures (PROMs) become available it will be possible
to capture improvements in health status more accurately.
April 2009
2 http://www.york.ac.uk/inst/che/pdf/rp47.pdf
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