NHS must reverse falling productivity ahead of reforms

The MPs delivered a sharp warning to health ministers in a report that found productivity fell despite record investment in the NHS over the last 10 years.

Total NHS productivity fell by an average of 0.2 per cent a year, according to the report, released on Tuesday.

The productivity measure is calculated as the ratio of the volume of resources - inputs - to the quantity of healthcare provided - outputs.

The NHS received a 70 per cent increase over the same 10 year period.

The figures mean the public has access to a “better quality NHS” due to the investment, but is receiving less per taxpayer pound, the report said.

The Department of Health’s role in keeping a “central focus” on productivity and efficiency will “remain vital” during the reforms’ “transitionary phase” if it is to deliver its £20bn annual savings promise by 2014-15, it said.

The report pointed to a King’s Fund estimate that NHS productivity will have to improve by 6 per cent a year if it is to achieve the savings.

The committee said the DH must focus more explicitly on improving hospital productivity if it is to deliver ambitious savings without healthcare services suffering.

Pay contracts and payment by results tariffs must be revised to deliver productivity gains that were promised but failed to materialise, it added.

Committee chair Margaret Hodge said the pay contracts’ failure to deliver productivity gains were a “key problem”.

She added: “There are risks for the NHS in achieving productivity improvements at the same time as delivering radical reforms.”