David Oliver: Is NHS “inefficiency” a public myth?

National insurance contributions increased at the start of April. Last week I heard small business owners on the radio, anticipating the hike in the employers’ contributions they have to make and the increase their staff must also pay as part of the government’s “levy” to increase health and social care funding.1

From the relative security of a salaried public sector job, I can only begin to imagine the stresses that covid restrictions, Brexit, new immigration rules, a labour shortage, and inflation have placed on small and medium businesses and self-employed people. During the radio discussion a small business owner said something I’ve heard repeatedly in the media: “The NHS needs to become more efficient. We know it is inefficient, and it has too many managers. We are paying for it, and we can’t keep paying more. Businesses make efficiency savings, so why can’t the NHS?” Many seem to have this view. But does it stand up to scrutiny?

Certainly, NHS services can seem hard to navigate, poorly joined up, unresponsive, and not personalised2 when compared with private sector service industries or indeed private healthcare. Covid has also exacerbated long waits for elective care and problems with access to general practice, as well as overcrowding and waits in acute care.34 And I can understand people’s frustration at the NHS consuming year-on-year increases in real terms funding, when key process performance indicators and outcomes don’t always seem to improve in proportion to investment.5 Performance data show wide variation in processes and outcomes—some of it outlying and unwarranted—and room for efficiencies.6

That said, the NHS is not notably overmanaged. Only 2% of NHS staff are managers—less than in most UK sectors7 and in health systems of other developed countries.8 The Health Foundation recently concluded that the NHS needed more management capacity, to add value to care processes.9

NHS funding, whether in terms of spending per head or percentage of gross domestic product, sits mid-table in the Organisation for Economic Co-operation and Development (OECD) nations and just above the EU average.10 We have a relatively low proportion of self-funded spending and the lowest proportion of people denied or avoiding healthcare for fear of cost.11

The regular OECD comparison of countries and a recent paper in The BMJ comparing health systems in 11 high income countries have shown that the NHS has among the fewest doctors, nurses, and beds per 1000 people. Our GPs see around twice as many daily contacts as their counterparts in 10 other comparator countries,12 and GP numbers haven’t grown since 2015, though their workload has.13 We now have big and growing staffing gaps, and the NHS is also affected by a staffing and capacity crisis in social care, which is even more pressing.14 With workloads rising and staff numbers falling, it’s perhaps no surprise that a pre-pandemic analysis showed that gains in NHS productivity had outstripped those of other sectors, private and public.15

As for the progressively greater real terms funding that the NHS consumes, healthcare use reflects demographic demand. In a growing and ageing population, with greater health inequalities and more people with long term conditions, activity and need inevitably increase, as do treatment, staffing, and equipment costs.16

We don’t need a private versus public culture war. The public and private sectors are inextricably linked and interdependent. We need more mutual understanding and less of the language of blame. But recovery from the covid pandemic has exacerbated tensions and misunderstandings that were already high.