NHS productivity rose by 1.2 per cent in 2007 and 0.7 per cent in 2006, official statistics show, reversing a seven year stretch of declining productivity.
The latest statistics – published today – show the NHS has performed well compared with other parts of the public sector. Although productivity in the public safety services grew by 3 per cent between 2006 and 2007, it was starting from a much lower bar, with productivity in 2007 16.6 per cent lower than in 1997.
By contrast, NHS productivity is now 4.3 per cent lower than in 1997. The main reason NHS productivity remains lower than in 1997 is the massive increase in inputs since that year – measured both in terms of the quantity and quality of investment and staff time.
Office for National Statistics figures show a 59.3 per cent increase in NHS inputs between 1997 and 2007 (an annual average growth of 4.8 per cent), compared with a 38 per cent increase across the whole of public services (3.3 per cent on average a year).
Over the same time period, NHS outputs grew by 52.7 per cent – an average of 4.3 per cent a year.
In 2006 the NHS productivity figures included a controversial quality adjustment that inflated actual outputs by automatically assuming that, as standards of living were rising, the value of life and therefore of any lives saved were too.
But ONS economic adviser Mark Chandler told HSJ that adjustment had now been dropped. The output figures are still adjusted to take account of improving quality but the main adjustments are for improvements in life expectancy, survival rates, patient experience and outcomes as measured by the GP quality and outcomes framework.