With Jeremy Hunt saying that future pay rises might be partly linked to productivity improvements, Andy Cowper points out that measuring productivity in healthcare is hard, even as the pressure increases cheating instances

Health secretary Jeremy Hunt: “The pay cap has been scrapped.”

Health select committee chair: “You feel that that (18 week) standard will slip.”

Simon Stevens: “It clearly will slip during the course of this year. Prospects for next year and the year after will be determined by the budget for the NHS in those years… fundamentally, we need to increase the number of doctors in training. That will not produce immediate relief, but it will produce a benefit to the national health service over seven, 10 or 12 years.”

“ … the budget position, the currently pencilled in funding for the national health service for next year and the year after, looks extremely challenging, and, if not amended, it is going to be very hard for the NHS to do all that is being asked of it over the course of the next year and the year beyond.”

“… the welcome news is that there are statements that the government have made that they understand that this needs to be looked at. So, it is just a practical fact to say that the prospects for the kinds of measures that you are talking about for next year depend on decisions that are made on 22 November.” 

“…we said from the get go that over time it will be necessary for NHS staff to get rates of pay that are consistent with that and the rest of the economy. It is not reasonable indefinitely to expect people to take the kind of net pay cuts that they have seen, but that does need to be funded.”

“… we are spending £23 billion a year less than if we were spending at French or German levels, and there are consequences to that.”

The short quote above from Mr Hunt and the longer quote from the NHS Commissioning Board’s Sun King Simon Stevens both amount to the same thing: the consensus among NHS system leaders that pay restraint is a busted flush is no longer the love that dare not speak its name.

So far, so promising. But that’s not the vital point.

The vital point is a pair of related questions, which live at 11 Downing Street and in HM Treasury. These questions are related: firstly, is Chancellor Philip Hammond listening to Messrs Hunt and Stevens? Secondly, if Mr Hammond is listening and agrees with their consensus, can he do anything about it?

Daring radical Philip Hammond

Mr Hammond has big, tax-revenue-y things on his mind. He told the Treasury select committee this week that a “cloud of uncertainty” about Brexit was dragging the UK economy down, adding that “every pound we spend on contingent preparations for a hard customs border is a pound we can’t spend on the NHS, social care, education or deficit reduction.”

At one level, this seems like stating the obvious; at another level, given the full blown internecine war underway between Brexiteer Ultras and their more reality prone colleagues, Mr Hammond’s intervention feels daring and radical. 

Is Chancellor Philip Hammond listening to Messrs Hunt and Stevens? Secondly, if Mr Hammond is listening and agrees with their consensus, can he do anything about it?

Yes, I did just put Philip Hammond and the phrase “daring and radical” in the same line. Extraordinary times call for extraordinary measures.

Can he find some cash for the NHS? The latest tax receipts data is not too discouraging, but UK economic growth forecasts are slowing, say the Organisation for Economic Cooperation and Development and PwC. OECD + PwC = (probably) lower GDP.

The productivity fairy

The big bit of the NHS budget is of course pay. It is interesting that Jeremy Hunt told the House of Commons at Health Questions last week that “the latitude the chancellor has given me in negotiating future pay rises is partly linked to productivity improvements that we will negotiate at the same time. The fact is we do have that flexibility and I hope we can get a win win.”

So that’s great news for the NHS, right? Productivity is good: it means we get more widgets of healthcare. Higher pay is good because it means nurses not leaving the NHS, right?

Mmmmm. A few caveats spring to mind. Firstly, measuring productivity in healthcare is hard, as US academics have found, and people disagree about the methodology

In the UK, the Carter review and Tim Briggs’ GIRFT work are both pursuing this. The Health Foundation published a 2015 review, and the work of Andrew Street and colleagues is important. Street, however, wrote for HSJ that productivity growth is rarely straightforward. Street noted that ”an approach that focuses exclusively on short term adjustment to labour inputs, whether through permanent or agency staff, will not generate long term performance improvements”.

Perhaps the key question is this: who will measure productivity and carry out assessments and negotiations to reward those staff perceived to be more productive and penalise the tardy?

Dear old Lord Lansley’s bonfire of the bureaucrats in the 2012 Act took out much management capacity and capability that might have been used for this. NHS Improvement’s departing boss Jim Mackey last week told the health select committee “We have about 10 per cent to 12 per cent of our staff in NHSI tied up on the operational productivity”, but could they handle the challenging task?

The NHS’s track record with doing slightly complex HR/productivity stuff is not too inspiring. Longstanding (or long sitting) readers will recall that foundation trusts’ freedom was to vary pay, terms and conditions from the national Agenda For Change contracts: only one (Southend on Sea) ever did, and eventually went back to the national contracts.

Who will measure productivity and carry out assessments and negotiations to reward those staff perceived to be more productive and penalise the tardy?

All the while, we see the pressure rising. The latest waiting time data shows, in Rob Findlay’s cogent analysis, that the abolition of fines for waiting time breaches has shown up in more delays.

There are dark rumours emerging that waiting list cheating/gamification is not confined to the few trusts about which we already know.

Meanwhile, it is clear form leaked documents that the board of Basildon and Thurrock overrode former finance director Rick Tazzini’s concerns that an unrealistic control total from NHSI would threaten patient safety, and accepted it.

This is not a good look. It’s also apparently not that rare. It was just documented, and now leaked.

Waiting list gaming and fantasy control totals are not surprising. When you create the incentives in a system for people to cheat, that is what they will do. 

The NHS has been a pressure cooker for some years. Now, the pan of water that is workforce and finances seems to be simmering.

Readers not unfamiliar with the kitchen will know that simmering a pan for too long sees all the liquid evaporate, and the pan get scorched and become too hot for anyone to touch without getting burned.

Is more liquidity for the NHS going to arrive in the Budget? Place your bets. (But keep within your control total, obviously.)