What ‘performance’ means in the NHS

NHS performance can mean a number of different things. First and foremost, performance means the quality of care that the NHS provides, defined in the NHS Next Stage Review as 'clinical effectiveness, patient safety and patient experience'. Performance can also relate to the access patients have to services, the equity of service provision, the efficiency of services, and the financial health of NHS organisations (more information on quality of care is available on our quality of care topic page).

How performance is managed and incentivised

Performance management in the NHS is complex, involving many organisations interacting at different levels. The system has been subject to frequent change and revision throughout the NHS’s history.

The diagram below from the Department of Health in 2008 provides a basic structural outline of roles and responsibilities of the major organisations involved in NHS performance.

Source: Department of Health (2008). Developing the NHS Performance Regime. London: Department of Health.

Starting at the highest national level, the Department of Health agrees Public Service Agreement targets with HM Treasury. The Department also produces an annual NHS Operating Framework, setting out an overall direction for the NHS, and including particular measures of performance called ‘Vital Signs’. It sets National Service Frameworks, which specify particular requirements for particular services, and clinical guidelines and guidance from the National Institute of Health and Clinical Excellence are also nationally mandated.

Regulation is managed at a national level by the Care Quality Commission, which ensures that only providers achieving a specified basic standard of care can be registered to provide NHS services, and provides further information about the performance of particular services through a programme of surveys and reviews. Monitor regulates the financial performance of NHS foundation trusts. The skills of individual clinicians and health care staff are regulated by their professional bodies.

The NHS Performance Framework, introduced in 2008, sets out the approach for dealing with underperforming organisations, for example, when strategic health authorities (SHAs) and primary care trusts (PCTs) should intervene and how failing organisations should be managed. SHAs are held to account for their performance through the SHA assurance framework, and PCTs by the world class commissioning assurance framework.

At the level of individual providers, an array of performance management and improvement tools are increasingly used to assist boards in managing performance, such as balanced scorecards and quality dashboards. The system also includes a range of financial incentives to drive performance improvement – for example, Payment by Results, and more recently the Commissioning for Quality and Innovation (CQUIN) payment. In primary care, the Quality and Outcomes Framework provides a direct financial incentive for individual GPs’ performance against a set of quality metrics.

How the NHS is performing

NHS performance is measured in a number of ways, none of which can provide an entirely comprehensive picture. Moreover, different sorts of metrics developed for different purposes can and do give differing pictures of performance, so there is no agreed overall indicator of performance. What is clear is that there is considerable variation in performance, however it is defined, across the NHS.

Performance has undoubtedly been more transparent in recent years with much more information, such as the reports of the regulator, now in the public domain; this will be extended with the introduction of quality accounts, through which NHS providers will be required to publish annual reports on the quality of services alongside their financial accounts. The Indicators for Quality Improvement project from the NHS Information Centre is developing agreed quality indicators for use across the NHS and is aiming for more clinical ownership of indicators, more focus on outcomes, and more and better measures of patient experience. 

For NHS providers regulated by Care Quality Commission, the 2008/9 Annual Health Check rated 15 per cent of trusts 'excellent', 47 per cent 'good', 32 per cent 'fair' and 5 per cent 'weak' (2007/8 ratings were 26 per cent, 35 per cent, 34 per cent and 6 per cent respectively). In terms of their management of financial resources, 26 per cent  were rated 'excellent', 45 per cent 'good', 26 per cent 'fair' and 3 per cent 'weak' (2007/8 ratings were 24 per cent, 37 per cent, 34 per cent and 5 per cent respectively).

PCT performance was assessed under the world class commissioning assurance system for the first time in 2008/9. As world class commissioning is a developmental programme, it was not expected that PCTs would score highly in the first year, and indeed most PCTs achieved only levels 1 or 2 out of a possible 4 against each of the 10 competencies. None of the 152 PCTs achieved level 4 for any of the competencies, but level 3 was awarded 37 times.