NHS hospitals will struggle to meet productivity targets

Many NHS hospitals will struggle to deliver productivity improvements essential to maintaining quality and avoiding significant cuts to services, according to the latest quarterly monitoring report on NHS performance published by The King's Fund.

The majority of finance directors from NHS providers questioned for this quarter's report revealed that their trusts face productivity targets for 2011/12 of 6 per cent or more – well above the level required across the NHS as a whole to deliver the £20 billion in efficiency savings needed by 2015. Of these, more than half said they are 'uncertain' of meeting their targets. (1)

The key findings obtained from our panel of NHS finance directors are:

of the 29 finance directors who responded, 27 said their trust has a productivity target of 4 per cent or more, with 13 of these having targets of 6 per cent or more – all of them from provider organisations
around half the panel are uncertain of meeting their targets, while eight of the 13 panellists with targets of 6 per cent or more are uncertain of meeting them
26 of the 29 finance directors expect their trust to break even or be in surplus at the end of the year, with three expecting to be in deficit
the majority are confident that measures taken to meet their targets will not harm clinical quality, although around a quarter are uncertain or concerned about this
nearly half the panel are pessimistic about the financial prospects for their local health economy, with only five of the panellists optimistic about this.

These findings highlight the pressure on NHS providers in particular as the health system struggles to deliver significant improvements in productivity. It suggests that providers are facing higher targets than commissioners, perhaps indicating that the government sees them as better placed to deliver the improvements needed, given the upheaval faced by commissioners as a result of the health reforms. The findings also highlight concern about the prospects for NHS finances as the spending squeeze begins to bite, with three panellists expecting their trust to be in deficit at the end of the financial year.

The report also includes analysis of the latest NHS key performance data.

Median waits for hospital treatment rose in May 2011, but the proportion of patients waiting 18 weeks or longer for treatment fell for the third consecutive month. (3)
The median waiting time for diagnostic tests fell in May 2011, although the number of patients waiting six weeks or longer is at its highest level since February 2008. (4)
The proportion of patients waiting longer than four hours in A&E fell back slightly at the beginning of 2011 but remains higher than at any time since 2004. (5)
Levels of hospital-acquired infections remain low compared to their peak in 2008. (6)
The six months to March 2011 saw an almost threefold increase in the number of compulsory redundancies – more than 1,200 NHS staff were made redundant in the last quarter of 2011/12, of whom more than 200 were clinical staff. (7)
Delays in transferring patients out of hospital remain stable. (8)

The analysis on waiting times follows the Prime Minister's recent pledge to keep waiting times 'low', although the data it is based on pre-dates the pledge. (2) It reveals a complex picture – while they are still low by historical standards and median waits for diagnostic tests and hospital treatment remain reasonably stable, waiting times have risen against a number of key target measures since the coalition government relaxed performance management shortly after coming into office.

Professor John Appleby, Chief Economist at The King's Fund said:

'This quarter's report suggests that the government is looking to NHS providers to deliver the lion's share of productivity improvements, with many facing very tough cost improvement targets as a result. Based on the feedback we received, there must be significant doubt about whether many of these targets will be met. While waiting times remain low in historical terms, the rise against key target measures since this time last year shows how difficult it will be for the NHS to meet the Prime Minister's pledge to keep waiting times low as the spending squeeze begins to bite.'

Download the full quarterly monitoring report for July 2011

Notes to editors

How is the NHS performing? the second of The King's Fund's regular quarterly monitoring reports, is published on 15 July 2011. For further information, or to request an interview, please contact the Press and Public Affairs team on 020 7307 2632 (if calling out of hours, please ring 07584 146035).

For the first time, we are using a 'prezi' – an engaging way of presenting facts through an online presentation that zooms in and out of graphics – to highlight the key findings of the report. The prezi is available on our website at www.kingsfund.org.uk/quarterlyreport alongside the full report. You are welcome to embed it in your own website (an embed code is available on our website).

(1) The survey of finance directors aims to provide a snapshot of opinion and is not intended to be a representative sample. Of 49 finance directors invited to join the panel, 29 participated, with respondents drawn from acute trusts, mental health trusts and primary care trusts, and at least one panel member from all the English regions. Responses were provided in the period from 9-22 June 2011.

(2) On 7 June 2011, the Prime Minister pledged to keep waiting times 'low'. He indicated that the 18-week limit on referral to treatment in hospital will be retained and that waiting times for A&E will continue to be measured, as one of a range of indicators for monitoring performance in A&E.

(3) Based on analysis of data published by the Department of Health on 14 July 2011. The median wait for inpatients increased from 7.9 weeks in April 2011 to 8.7 weeks in May, while the median wait for outpatients increased from 3.7 weeks to 4.4 weeks. The proportion of patients waiting for 18 weeks or longer fell from 13.61 per cent to 12.80 per cent for inpatients, and from 2.52 to 2.32 per cent for outpatients. Median waits are now at the same level as in June 2010, when the government ended performance management of the 18-week target, while the proportion of patients waiting for longer 18 weeks remains higher.

(4) Based on analysis of data published by the Department of Health on 6 July 2011. The median wait for diagnostic tests in May 2011 was 1.9 weeks (down from 2.3 weeks in April 2011), while the proportion of patients waiting longer than six weeks was 2.73 per cent (15,929 patients), up from 2.54 per cent (14,163 patients) in April 2011.

(5) Based on analysis of data published by the Department of Health on 23 May 2011. 3.43 per cent of patients waited for four or more hours in A&E in the last quarter of 2010/11, compared to 3.52 per cent in the previous quarter. These are the highest figures since the second quarter of 2004/5.

(6) Based on analysis of data published by the Health Protection Agency on 6 July 2011. In May 2011, there were 782 cases of C difficile (an increase of 70 cases compared to April) and 53 cases of MRSA (four less than in April).

(7) Based on analysis of data published by the Department of Health on 30 June 2011. There were 1,250 compulsory redundancies in the last quarter of 2010/11, 234 of which were clinical staff. This compares to 769 in the previous quarter, of which 119 were clinical staff, and 432 in the second quarter of 2010/11, of which 112 were clinical staff.

(8) Based on analysis published by the Department of Health on 24 June 2011. 2,291 delayed transfers of care were recorded from providers of acute care in May 2011, an increase of 150 on the previous month.