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NHS productivity targets are “undoable” says King′s Fund economist

NHS productivity targets are “undoable” says King′s Fund economist

[London, UK/ Implementations] - Asking the NHS to find nearly £50 billion in efficiency savings in under 10 years would be “frankly undoable” says John Appleby, Chief Economist at the King′s Fund, in an article published on today [1].

The NHS has been set the target to achieve £20bn of efficiency savings by 2015 in the so-called “Nicholson challenge”, which amounts to a 3-4% annual cut in budget. For a medium-sized hospital trust that is equivalent to a reduction in budget of about £10m annually. It is now widely recognised in the NHS that information technology will play a vital role in achieving these efficiency savings, as shown at the recent BCS Health Informatics Congress (HC2012) [2] and the Health+in4matics 2012 conference [3] last month. The NHS Confederation has also come out strongly in support of the proper use of information technology [4].

Harsher savings to come

Senior government figures, however, have warned that total savings of £50bn may need to be found by 2019-20. Appleby warns that the NHS could be “setting itself up for failure” by stretching this already “barely achievable” productivity challenge another four years. “If we assume no real funding growth (inputs) and the need to improve outputs (the activity of the NHS adjusted for the quality of those outputs) by around 5% a year ... by 2018 this is equivalent to an improvement in productivity of around £49bn at 2010 prices,” he explains. But he shows that, while the NHS has produced more with more inputs, it has rarely made a positive productivity increase in a year in excess of 1% — let alone 5% each year for eight years.

There is something to be said for having a “stretching” target, but giving the NHS a challenge on this scale would risk setting it up to fail, he says. He acknowledges that “there should be no let up in finding new and better ways of using finite budgets to do good things for people who use the NHS” but says “maybe it′s time for some realism.” He concludes: “Even if the NHS achieves half the challenge over the next eight years it will have produced something quite unprecedented. Perhaps that′s the best that can be hoped for.”[hw]

[Related information]

1. John Appleby. A productivity challenge too far? BMJ 2012; 344:e2416.

2. HEALTH+IN4MATICS 2012. Why can′t I type in my NHS number and find out all my patient information?

3. HC2012 / Day 2: "Its worth sticking your neck out sometimes because the results can be brilliant"

4. BJHC Vox Pop: Mike Farrar. The NHS Information Strategy: The strategy will be influential because it puts the responsibility back in NHS hands.

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