Intended for healthcare professionals

Analysis NHS at 70

Productivity in the NHS: why it matters and what to do next

BMJ 2018; 363 doi: (Published 26 October 2018) Cite this as: BMJ 2018;363:k4301
  1. Jennifer Dixon, chief executive1,
  2. Andrew Street, professor of health economics2,
  3. Dominique Allwood, assistant director of improvement1
  1. 1Health Foundation, London, UK
  2. 2Department of Health Policy, London School of Economics and Political Science, London, UK
  1. Correspondence to: J Dixon jennifer.dixon{at}

A clear strategy for increasing productivity is vital for a sustainable NHS, argue Jennifer Dixon and colleagues

Earlier this year, the prime minister announced a financial settlement for the NHS over the next five years of 3.4% real terms growth, or £20.5bn (€23bn; $27bn) a year by 2023-24.1 Although greater than the 1.5% growth over the past eight years, the settlement is less than the long term average of 3.7% and the 4% recommended after recent detailed analyses.2 It will not be enough to modernise the service or head off difficult decisions about what services and treatments to provide. These decisions will be easier if the NHS is able to get more out of the funding it receives, which requires a focus on productivity.

Productivity is not normally a centrepiece of reforms to the NHS, but it should be. Paul Krugman, the distinguished US economist, put the issue starkly: “Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise output per worker.”3

However, productivity is a subject guaranteed to kill the attention of clinicians and patients. Clinicians associate it with working harder—something viewed with derision in today’s resource squeezed stressful working environment—and patients with cutting costs. Policy makers highlight new technologies that “disrupt” usual working practices as being the key to higher productivity—a narrative that can easily alienate staff and often omits the need to support staff to introduce and adapt new innovations, without which diffusion is slow. It is true but a cliché that increasing productivity means working more effectively not necessarily harder, reducing waste not sacrificing quality.4

Consistent with the rest of the economy5 and international best practice,6 productivity of the …

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