A landmark review of NHS productivity is to produce a new measure for rating every hospital in England on the efficiency with which it uses staff and resources.

  • Lord Carter’s review to produce new “adjusted treatment index” to rate each hospital in England on efficiency.
  • Interim report published next week finds NHS could save £1bn by 2020 by cutting number of product lines from 500,000 to less than 10,000.
  • Review also finds hospitals could save £400m a year through better planning of staff rotas and shifts.
  • All hospital trusts will be given individual savings targets, to begin delivering from January 2016.

The Department of Health-backed review, led by Lord Carter, will report that hospitals could save £400m a year through better planning of staff rotas and shifts. It will also conclude that the NHS could save £1bn by 2020 by cutting the number of product lines it uses from more than 500,000 to less than 10,000 and improving procurement practices.

The review’s interim report will aim to help unlock these savings by sharing a checklist of the behaviours, principles and measures for a “model hospital” and pioneering a new way for hospitals to measure how efficient they are and how they compare with peers.

Lord Carter will publish an interim report next week, and soon after publish a template for an efficient “model hospital”. He will also publish a new measure of the efficiency of every hospital, dubbed the “adjusted treatment index”.

HSJ understands that this index is to be based on a range of data sources, including trust annual accounts, the NHS reference cost collection, and the electronic staff record.

Based on this work, Lord Carter and the DH will set out in September the amount each hospital is expected to save by acting on the report’s recommendations.

Health secretary Jeremy Hunt this week said that, following a period of consultation with trusts to refine these numbers, providers would be expected to begin delivering these savings from January 2016.

The review has been working with 22 hospitals across England to establish how the NHS could save money by consistently employing best practice in areas like procurement and rostering.

Lord Carter said: “I’ve been surprised by the variation in performance in getting the very best care for patients and delivering value for money within the NHS. But it’s clearly the case that some of our hospitals are the envy of the world in terms of both quality and performance – so what we must do now is resolve to bring all providers up to the standard of the best. I look forward to publishing my report on productivity, which will help the NHS make some of those changes.”

Across the country, Lord Carter found wards that were not making the best use of their staff.

Another hospital using the soluble version of a pill for liver failure was previously paying £1.50 per tablet, compared to just 2p for the solid version. By saving the soluble version only for children and patients who have trouble swallowing, it is now saving £40,000 every year.

Lord Carter also found that hip operations are costing some parts of the NHS more than double the amount they should, using replacement hips that do not last as long as less expensive versions. This leads to additional costs in the form of subsequent operations and follow-up care. That difference costs the NHS £17m extra every year.