The NHS productivity challenge: Experience from the front line

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The unprecedented slowdown in the growth of NHS funding in England since 2010 required the NHS to pursue the most ambitious programme of productivity improvement since its foundation. It has broadly risen to the challenge, with pay restraint, cuts in central budgets, and the abolition of some tiers of management producing significant savings. But the strongest pressure has been applied and felt at the front line, by hospitals and other local service providers, faced with squeezing more and more value from every health care pound.

This report describes how six trusts have been grappling with the productivity challenge. It also suggests ways to divert the NHS and social care from their current trajectory, which is heading towards a major crisis.

Key findings

  • The current NHS productivity challenge is uniquely different (and difficult) because funding restraint has been more severe and long lasting, and coincides with major reorganisation.
  • 2015/16 is a possible financial ‘cliff edge’ for some providers, who plan to cut emergency and other elective work as part of the opportunity cost of diverting a further £1.8 billion of NHS allocations to consolidate the £3.8 billion Better Care Fund.
  • NHS spending as a proportion of gross domestic product (GDP) will fall from its peak of 8 per cent in 2009 to just over 6 per cent in 2021 – equivalent to 2003 spending levels.
  • Closing the ‘income–expenditure gap’ at local level requires significant efforts to increase income (not just reduce costs). 
  • Current productivity policy levers are not sustainable, even in the short term. Local health economies needed to think collectively (and with guidance) about how to provide services within budget. Politicians and the public need to acknowledge that this means major shake-ups in where and how services are provided.

Policy implications

The NHS and social care face enormous challenges over the next 18 months. To avoid a major crisis – in terms of widespread overspends, decreasing quality of care, or both – the NHS needs:

  • more time
  • more money for transformational change and short-term support
  • measures to support change and value for money.

It may also need to run overlapping services – ‘double running’ – until new services and delivery arrangements take root, while acknowledging that payback (in terms of better quality services and improved productivity) may not be realised for some time.

Finally, there needs to be a renewed effort to encourage clinicians to identify and lead change. This is the best way to ensure that improving patient outcomes remains at the heart of the search for greater efficiency.

More on NHS productivity



Healthcare director,
Comment date
19 February 2015
Oh dear. Here we are, 1 year on nearly and it's just gone from bad to worse. Change is not being welcomed or acted upon. Things are going to continue to get worse at huge long term cost. Expect legal action by the private sector against local authorities next. So many are in breach of so much now, this will become inevitable. Until central government start setting costs and ring fencing them, local authorities will continue to abuse funding from their dominant position. It's gone too far now with no sign of correction. Expect major fall out of the sector with dire consequences.

Geoffrey Cox

MD Southern Healthcare,
Nusing Home group
Comment date
18 June 2014
The article of John Appleby, Amy Galea and Richard Murray has the ring of truth, realism and common sense. It is unfortunate that those who call the shots do not seem to share these attributes.

I see several concerns.

Firstly, it seems to me that sadly the NHS has become so politically interfered with, cutback and faced with impossible demands, it would be difficult to predict much positive news for the nations health and wellbeing in the foreseeable future.

Secondly, worse still, good people within it are unable to do the work they are committed to, and it is worth reading Prof Buchanan, of Cranfield on this

Thirdly it is a major concern that key components of the lessons to be learnt from Mid Staffs - to some extent within the NHS hierarchy, but more perhaps more the DoH / Politicians appear to be unheeded.

Fourthly, it is what may go under the radar that is even more disturbing. I fear that there is a lot more that we do not see, hear or know about, and if we were to assess public confidence, opinion and trust, the results might be disappointing, and for all that, I am absolutely confident that the overwhelming majority of NHS employees are committed to doing their best, doing the right thing and making a difference. The question is are they allowed to?

Geoffrey Cox MSc. (Dementia studies) LLb.

Dr Michael Crawford

Comment date
06 May 2014
Today, there have been two health-related news stories.

One was about mental health; “A lack of beds is forcing mental health patients in England to seek treatment in other NHS facilities up to hundreds of miles away, BBC research has found.” This puts into context Sid David Nicholson’s comment on his valedictory interview in The Guardian that when the NHS used a reserve fund and “moved mental health care in the 1980s from traditional asylums, which were closed, to new community-based services – and that proved successful.” You still need the hospital facilities and all the more so if the community resources are inadequate. The problem is that mental health patients are much less competitive when it comes to NHS resources than are patients whose needs are surgical procedures and where waiting lists are a measure of capacity shortfall. But then we made surgical patients even more competitive by setting waiting time targets and triumphed on wonderful policy success when the targets were met. But Goodhart’s Law tells us that when a measure becomes a target, it ceases to be a good measure.

The second was the issue of avoidable deaths in asthma which is in truth about asthma patients competing for attention in primary care or else using emergency services.

Two things about the Productivity Challenge report. Firstly, there is no mention whatsoever about inequalities in access. These are a fundamental point in the NHS; that’s why we have a taxpayer-funded service in the first place. There is ample evidence that poorer people have less access. This is especially evident in my field of cancer medicine because cancer registration means we can explore access to services at the population level. I think that the major piece of research that needs to be done to understand the effectiveness of the NHS in looking after people is to compare how those who live in localities where the Index of Multiple Deprivation is above 20 have their needs met compared wit those who, like me, live in an area with an IMD less than 10.

Secondly, again illustrated by cancer services, there is a contradiction between demand management and timely diagnosis. QIPP savings here between 4 and 11 per cent, depending on how you measure, it are claimed. GPs are enthusiastic about their role as gatekeepers but patients who attend the surgery with early symptoms of cancer bring about a particular dilemma. The symptoms of some common cancers that give the first opportunity to make the diagnosis with lifesaving timeliness have a predictive value of 1 to 5 per cent.(Lancet Oncology, Feb 2014, p232). A predictive value of 2% means that to diagnose one cancer you need to test 50 people. The “demand management” philosophy works against this. Screening, that is the testing of people with no symptoms, requires even more resource in the Anytown Multidisciplinary Healthcare Facility (aka General Hospital).

Harry Longman

Chief Executive,
Patient Access Ltd
Comment date
05 May 2014
Powerful analysis of the problem. The next piece is how to address it. We need to start by measuring different things, and measuring differently. The primary focus on waiting time targets encourages thinking of ways to massage the numbers, but discourages thinking of ways to understand demand better, and manage flow better. There's a lot of creativity out there, doing the wrong stuff.

Dr Michael Crawford

Comment date
05 May 2014
Why was the question in the March 2014 survey about achievability of 15% reductions in emercency admissions addressed to trust finance directors? It seems strange to put this to such a group.

george coxon

various health and social care roles,
Comment date
02 May 2014
I remain absolutley certain that until we see a greater genuine commitment to true health and social care integration the NHS silo battle on productivity and QIPP will remain untenable leaving the social care squeeze (so called bulge management) leading more and more older people with frailty and dementia into hospitals at circa £500 per occupied bed day

Terry Roberts

Member of the public,
Comment date
02 May 2014
More money is not the answer to every problem. Lets start by managers managing better.
It is easy to deceive and mislead sentimentalists with soothing management speak and massaged figures. The Francis report makes such accusations all too plausible.
The NHS has so much to offer and there are some real gems but the public must stop being so sentimental over it, that is dangerous because it is at odds with evidence and truth, it leads from wishful thinking to self deception and denial.

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