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How do we measure productivity in our health service?

11 October 2007

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The NHS Alliance has wlecomed the government’s comprehensive spending review, which it calls “more generous than expected for the NHS”, but says the focus should now be on improving productivity.

In a press statement, the NHS Alliance said it is “a major mistake to confuse productivity in the health service with simple unit costs”, and added that new methods are needed for measuring productivity.

Take the much criticised GP contract. It was designed to improve the quality of patient care. An example of that in action is better treatment of diabetes by GP practices. That takes more time – so at first sight, it means reduced productivity. But in 10 years, there will be fewer diabetes patients losing their sight or developing kidney failure. Isn’t better care early enough a productive use of NHS resources?

A great deal of activity in primary care is about making sure that people who are ill are treated promptly and efficiently, so that their condition does not deteriorate to the point where they need admission to hospital – avoiding that operation whose unit cost is so carefully measured. Yet productivity that puts the patient first counts for nothing in the balance sheets.

Encouraging self-help and improving overall health, finding new and cheaper ways of doing things through GP commissioning, even acting as gatekeepers to secondary care services, all contribute substantially to an efficient, cost-effective NHS.

NHS Alliance chairman Dr Michael Dixon said: “We need a far more sophisticated idea of what productivity is in the health service. So much of what we are now achieving does not figure in the accountants’ balance sheets. But it should.

“In business, productivity can be improved by doing as little possible to get the greatest number of widgets. Copying that approach in the NHS would be disastrous.

“The public understands that, and so do NHS staff. Healthcare is not about counting the cost of widgets. That is why we feel uncomfortable when economists start telling us we must improve our productivity.

“The experts need to look more closely at what is actually happening in the NHS and find new ways of measuring real achievements in patient care. That would be a real service to staff, patients and the tax payer.”