Skip to content

Thoughts on the NHS’s productivity decline


Health and care secretaries have some common preoccupations. These include: announcing reviews of NHS leadership and management (often led by former CEOs of Marks & Spencer or Sainsburys); efforts to get more clinicians into NHS management roles; initiatives to bust bureaucracy and cut red tape; and, of course, reviews of NHS productivity.

Alongside its inclusion in the Chancellor’s current public-sector-wide productivity review, the NHS has also had a number of dedicated productivity reviews in recent years: the Townsend efficiency stocktake; the Rowe review of NHS waste; Lord Carter of Coles’ review of NHS operational productivity; the McKinsey NHS productivity review; and recent research reports from the Institute for Fiscal Studies, and the Institute for Government and Public First on this topic.

The presence of so many reviews demonstrates that NHS productivity is a political priority. It also implies that if we really knew what was going on with NHS productivity, we wouldn’t be talking about it so much. So, to add a little more to this debate, here are a few thoughts on NHS productivity.

First, productivity growth isn’t always a good thing – at least in the short term. In crude terms, productivity in health care is measured by looking at how the outputs of a health care system (eg, accident and emergency (A&E) attendances and GP consultations) are growing compared to the inputs you need to produce them (eg, staff, capital investment). So you could have impressively high productivity growth, for example, by holding down staffing numbers and underinvesting in capital infrastructure while asking the NHS to provide more care. Those actions may have defined health policy in the noughties but few would argue that they are a marker of healthy productivity or a terribly useful yardstick with which to measure current productivity.

Health care productivity growth was affected by low input growth during austerity and then fell sharply during Covid-19

Second, although we know productivity growth in the NHS fell during Covid-19 (see above), no one really knows why it has remained sluggish since. There are many plausible hypotheses, from worn-out facilities to burnt-out staff. NHS finance directors have certainly been repeatedly surveyed to get to the bottom of this productivity puzzle. I still remember talking to an operations manager who said ‘You want to know what my productivity problem in operating theatres is? Of course, I can get better in my surgical knife-to-skin time and rota design. But my problem is I work in a tower block with a lift with bespoke parts that keep breaking. And I lose time every day transporting patients from the ward to the theatre.’ So while we know the NHS has a productivity challenge, we may have to accept that there are limits to what further insight another national review of productivity can unearth.

So while we know the NHS has a productivity challenge, we may have to accept that there are limits to what further insight another national review of productivity can unearth.

Third, we need to be clearer about what conversation we are really having, because too many conversations about NHS productivity seem to be a proxy for conversations about delivery. You start meetings talking about technical issues – such as how to best adjust productivity calculations for the changing quality of NHS output – and before long someone is voicing their frustration that ‘the NHS said it needed more money. It got it. Then it said it needed more staff. It got them. So why can’t it just deliver?’.

In this context, ‘delivery’ does not mean better performance on productivity growth equations but instead means everything from meeting A&E waiting time targets or financial targets or other government priorities. If that’s the real impetus behind productivity reviews – and it might well be because questions about delivery were being raised even when the NHS was demonstrating strong performance on productivity measures – then productivity reviews will always be trying to answer the wrong question.

Finally, it might be time to rebrand NHS productivity drives. I have rarely met anyone in the NHS who was inspired by pleas to improve productivity. Productivity is cold. It is equations. It is more for less. It is something that is done for a taskmaster. Waste, on the other hand, is visceral. Ask a clinician about waste in their service – the things that waste their time, that waste their patients’ time, and that waste taxpayers’ pounds – and you will see them light up with ideas on ways to improve how services are run.

Paul Krugman famously said ‘productivity isn’t everything, but in the long run it’s almost everything’. Maybe so. But in the past ten years, the OECD (Organisation for Economic Co-operation and Development) published a seminal report on waste in health care and the Academy of Medical Royal Colleges published a report on improving value in health care. In time, these may prove a more fruitful stimulus for sustained improvement in NHS services than a plethora of productivity reviews.

Meeting the productivity challenge

Join this two-day virtual event to be at the forefront of discussions how the narrative around productivity is changing and how we can make it work, both for those working in the health system and for the people and communities who use health services.

Book now