Decline in NHS productivity over past decade is branded “a myth”

BMJ 2012; 344 doi: (Published 14 February 2012) Cite this as: BMJ 2012;344:e1110
  1. Ingrid Torjesen
  1. 1London

Official claims that NHS productivity has declined over the past 10 years have been disputed by a leading expert in health policy, who argues that this is a myth and that productivity has probably gone up.

Claims by politicians that NHS productivity is in decline, which are being used by the Conservatives to justify a need for their controversial health reforms, have been based mainly on an analysis by the Office for National Statistics (ONS) showing that overall NHS productivity has fallen by 0.4% a year since 2000 ( A National Audit Office report published in 2010 concluded from these figures that this meant that hospital productivity had fallen by around 1.4% a year (BMJ 2010;341:c7287, doi:10.1136/bmj.c7287).

But Nick Black, from the department of public health and policy at the London School of Hygiene and Tropical Medicine, writing in the Lancet this week (doi:10.1016/S0140-6736(11)61782-0), argues that “rather than declining, the productivity of the NHS has probably improved over the past decade.”

He wrote: “Until the election in 2010, debate as to whether productivity had fallen or risen was played out, predictably, largely on party lines. To justify the reforms to the NHS that the Conservative Party wanted to introduce, the claim of declining NHS productivity was necessary.”

Although during the general election the issue of productivity remained a contested area, afterwards Labour seemed to lose faith in the policies it had followed since 2010, Professor Black pointed out. “It was as if, exhausted from years in power and bruised by an election defeat, Labour’s will to defend past achievements had gone. The absence of opposition resulted in a consensus that NHS productivity had indeed declined.”

The ONS analysis in question compared the rise in expenditure between 2000 and 2008 (5.9% a year) with the rise in output, which it determined was 5.5% a year. The ONS came to this figure by adding together estimated improvements in the quantity and in the quality of NHS care. Although its assessment of quantity may have underestimated the increase in activity at 4.7% a year, because it was restricted to three aspects of healthcare (numbers of hospital admissions and outpatient attendances, numbers of consultations in primary care, and numbers of prescriptions dispensed), it was the estimate of quality improvement (better outcomes and patient experience) that was the major cause of concern, Professor Black said.

The ONS considered that quality had risen by 0.8% a year, but Professor Black states that in some areas for which accurate data exist the improvement was considerably greater. For example, deaths in adult critical care fell by 2.4% a year, and deaths after a heart attack fell by 5.3% a year. Meanwhile, in clinical practice, adherence to evidence based guidelines for stroke patients rose 5.7% a year, and patients’ satisfaction rose steadily. The number of patients admitted to a single sex ward rose by 11% a year, and the proportion of people who believed the NHS to be getting better rose by 10.8% a year.

“Clearly, in view of the small difference between expenditure and output (0.4% a year), any shortcoming in the determination of either component could easily affect whether productivity is judged to have fallen or risen,” Professor Black said.

“The diversity and size of the annual relative improvements suggest that a 0.8% a year adjustment for improvement in quality is insufficient. Even an additional improvement of 0.5% a year (ie, 1.3% a year improvement in quality) would change the judgment that NHS productivity fell to a verdict that it rose.”

Joe Grice, chief economist at the ONS, said that there had been some “misunderstandings” in Professor Black’s study and that he would be writing to the Lancet to point these out.

Speaking on BBC Radio 4’s Today news programme on Tuesday 14 February, he said, “Professor Black is absolutely right that quality has made a substantial contribution to the output of the health service and indeed to the productivity—we reckon by about 0.9% a year. But actually, notwithstanding that increase in quality which certainly seems to have taken place, we still think that productivity fell slightly over the period between 1995 and 2009.”

The fall in productivity was about 2.7% over that period, about 0.2% a year, said Mr Grice. “The key point is that in the rest of the economy over that same period productivity has risen by 20% or so, and that’s the important point. We haven’t seen that rise in productivity that we have seen in the rest of the economy,” he said.


Cite this as: BMJ 2012;344:e1110

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