Focus on the front line to close £14 billion NHS productivity gap, says new report from The King's Fund

A new report, Improving NHS productivity: more with the same not more of the same, from The King's Fund shows that the most significant opportunities for improving productivity in the NHS lie in changing clinical practice among frontline staff.

Based on the small real terms increase in funding promised by the coalition government, the report shows that the NHS will face a productivity gap of up to £14 billion a year by 2014. This is less than previous assessments as it is based on reduced estimates for costs that may not be required or could be reduced in light of changing priorities. It equates to a need to find productivity improvements of 3-4 per cent a year if the NHS is to maintain quality and avoid cutting services.

The report is based on a thorough review of the evidence about the options available to the NHS to improve productivity. It shows that although some progress can be made by reducing administrative costs - by cutting management, sickness absence and back office costs - this will fall a long way short of meeting the £14 billion gap identified by the report.

The report shows that the majority of the productivity gains needed can be delivered by reducing 'clinical variation' - the differences in performance between front line teams involved in delivering health care. This means driving up performance among poorer performers to the level of the best by focusing on:

  • The efficiency of services - for example reducing hospital stays, pre-operative bed days and hospital readmission rates
  • The quality of care - for example by tackling health care-acquired infections, reducing errors in prescribing drugs and improving management of leg ulcers.

Following on closely from the publication of the government's NHS white paper, the report warns that the NHS must continue to focus on delivering the productivity savings needed, despite the structural upheaval signalled by the proposed reforms. It also recommends:

  • Continuing to invest in developing the leadership and management skills needed to drive the productivity agenda across the NHS.
  • Increasing integration between health and social care services, especially in view of the significant cuts in social care budgets likely to follow the Spending Review.
  • Engaging and motivating staff at all levels to ensure they play their part in delivering the productivity savings needed.

Professor Chris Ham, Chief Executive of The King's Fund and one of the report's authors, said:

'As the NHS grapples with much smaller increases in funding from 2011, the danger is that the focus on delivering productivity improvements becomes, at best, an end in itself and, at worse, a misunderstanding that it needs to cut budgets. To maintain quality and avoid cutting services, the NHS must focus on delivering more value from the same amount of money, not delivering the same value for less money. This means focusing on the front line teams who provide care to patients and hold the key to delivering the productivity gains needed.

'There is a significant risk that the structural changes announced in the recent White Paper will distract attention, precisely at a time when there needs to be a single-minded focus on closing the £14 billion productivity gap facing the NHS. This risk must be managed so that improving productivity remains the NHS's number one priority. A number of studies have highlighted the opportunities to improve NHS productivity - the focus must now switch to execution and implementation.'

Read the report: Improving NHS productivity: more with the same not more of the same

Notes to editors: 

  1. Previous analysis by The King's Fund with the Institute for Fiscal Studies identified a £21 billion productivity gap based on a real terms freeze in NHS funding. Our latest analysis identifies £6.5 billion in expenditure that either may not be required or could be reduced, assuming that previous assumptions about pay and procurement, reducing waiting times and capital investment are revised. On the basis of a small real terms increase in NHS spending, as pledged by the coalition government, this leaves a productivity gap of around £14 billion if the NHS is to maintain quality and avoid cutting services.
  2. For further information or interviews, please contact The King’s Fund media and public affairs office on 020 7307 2585. If you are calling out-of-hours, please ring 07584 146035. An ISDN line is available for interviews on 020 7637 0185.
  3. The King's Fund is a charity that seeks to understand how the health system in England can be improved. Using that insight, we help to shape policy, transform services and bring about behaviour change. Our work includes research, analysis, leadership development and service improvement. We also offer a wide range of resources to help everyone working in health to share knowledge, learning and ideas.