Dramatic variations in NHS productivity have been revealed by a report commissioned by the Department of Health and obtained exclusively by HSJ.

The report by York University’s Centre for Health Economics suggests the East Midlands region is the least productive in England while the South West region is, by far, the best performer.

The report - from the same team that calculates NHS productivity for the Office for National Statistics - costed the inputs and outputs for the NHS on a regional basis.

Uncontrollable variations in input costs such as higher wages in the South East were controlled for. Adjustments were made to take into account the varying disease burdens experienced in different regions.

The methodology also took in a range of outputs including healthcare quality as measured by waiting times, survival rates and quality adjusted life years.

Due to a lack of robust data primary care inputs and outputs were excluded from the analysis - a shortcoming acknowledged by the authors.

A national average productivity ratio was then used as a benchmark against which to measure the performance of each region.

The five regions that were less productive than the national average were East Midlands (6.57 per cent less productive); South Central (-3.34 per cent); West Midlands (-1.9 per cent); Yorkshire and the Humber (-1.57 per cent); and South East Cost (-0.62 per cent).

The five regions that were more productive than the national average were South West (5.32 per cent more productive); East of England (2.06 per cent); North East (1.54 per cent); North West (1.41 per cent); and London (1.07 per cent).

The report, which is published today, says: “If it were as productive as the South West, East Midlands could deliver the current amount of hospital and community care for £4.7bn rather than the £5.3bn actually spent.”

The report authors said that if all regions were as efficient as the South West the saving in 2007-08 prices would have been £3.2bn - a saving of 5 per cent.

Giving evidence to the Commons health committee on Tuesday, NHS chief executive Sir David Nicholson said the study’s findings corroborated the DH’s own findings that approximately £3.2bn could be gained by reducing the variation in productivity across the NHS.

A spokeswoman for the department said: “The findings from York University confirm the Department’s own analysis, and reiterate the need to tackle the issue of productivity in the NHS.”

York professor of health economics and report co-author Andy Street said: “Even though the budget is ringfenced the NHS has to make substantial efficiency improvements over the next five years. Our analysis indicates which parts of the country [may have the] greatest scope for improvement.”