NHS productivity outpaces wider economy

A new study by health experts has shown that the productivity of the NHS has improved almost two and a half times as fast than the wider economy over the last 12 years, meaning more care and treatments for patients and better value for taxpayers.

According to the University of York's Centre for Health Economics, hard-working NHS staff provided 16.5% more care pound for pound in 2016/17 than they did in 2004/05, compared to productivity growth of only 6.7% in the economy as a whole.

Their study, Productivity of the English National Health Service: 2016/17 Update revealed NHS outputs have continuously increased since they began measuring a dozen years earlier. 

Some 5.2 million more patients received planned or emergency hospital treatments in 2016/17 than in 2004/05 - an increase of about 42%.

Separately outpatient activity has shot up by 131% since 2004/05, with over 60 million more attendances in 2016/17 compared to 2007/08.

The new research reinforces figures published by the Office for National Statistics in January, which showed that NHS productivity in England in 2016/17 grew by 3% from the previous year, more than treble the 0.8% achieved by the whole economy.

NHS England chief executive Simon Stevens said: "This independent research confirms that NHS productivity has been growing at more than double that achieved by the rest of the UK economy including the private sector.

"This is a huge tribute to the work of NHS staff, and the intrinsic efficiency of this country's health service. It represents further welcome proof that taxpayers' investment in our health services is money well spent."

Last year the NHS delivered over £6 billion of quality and cost improvements, and action taken in recent years to improve efficiency by NHS England and NHS Improvement includes:

• The introduction of a cost-per-hour cap on agency staff from November 2015;
• Curbing prescribing of medicines that have little or no benefit that will over time help save up to £200 million a year, and;
• Stopping the routine commissioning of 17 procedures where less invasive, safer treatments are available and just as effective, over time saving up to an estimated £200 million a year.

The NHS Long Term Plan sets out plans to deliver further efficiency savings equivalent to around £1 billion in extra investment each year, including by:
Making savings on everyday items by using the combined buying power of the whole NHS;

• Getting better value from the £16bn annual drugs spend, with more clinical pharmacists working with GPs and care homes to reduce prescribing errors and over-medication, and switching to generic versions of branded medicines as soon as they become available;
• Freeing up £700 million a year in administration costs, which at 2 pence in the pound already compare favourably Germany (5 pence) and France (6 pence), and;
• Continuing to tackle fraud against the NHS.

Savings made through these and other measures will free up resources to deliver cutting edge technology such as CART cancer therapy and genomic testing for every child with cancer as part of the NHS's mission to save approach an extra 500,000 lives over the next 10 years.

New ways of delivering care, including delivering more tests and treatments in the community rather than hospital, bringing together mental and physical health services to provide more preventative care, and harnessing the potential of technology and data to streamline processes for staff and patients alike are also expected to improve efficiency, as well as delivering better results and being more convenient for those who use them.