Health service productivity continuing to fall

The picture emerging from today's report (PDF) on health service productivity, by the Office for National Statistics, is stark:

"From 2001 to 2005, productivity fell, as high growth in health care was lower than even higher growth in inputs. Even with the available adjustments for quality change in output, productivity fell by 2.0 per cent a year, on average, between 2001 and 2005. Without quality adjustment for output, productivity over the same period would have fallen by 2.5 per cent a year on average"

That's a pretty substantial fall.

The quality improvements are a little questionable. They consist of things like falls in waiting lists - very vulnerable to manipulation - instead of actual improvements in health outcomes. If we're going to focus on output productivity instead of improvements in health outcomes the straight 'quantity' measure is more instructive. It tells you about the direct return - in terms of consultations with doctors and drugs bought, for example - we're getting for our money. If those activities have become more useful that is an important, but separate, issue.

If you want a measure of actual outcomes then you should look to our report (PDF) Wasting Lives: A statistical analysis of NHS performance in European context since 1981 which studies mortality amenable to healthcare.

Those 2.5 per cent falls in output might seem marginal but they become very significant over time. The crucial table is this one, part of Figure 2:

What that shows is that productivity value has fallen from 100 to 89.8 over the period. This means that we're getting 10 per cent less today from every pound we spend on the NHS than we were in 1995.

Given how much we're spending that fall in productivity implies a massive waste of money and the failure to get the improvements in output we might have hoped for had productivity performance been better implies a massive waste in lives. The step change in healthcare performance we were told we would get for our money hasn't arrived - neither has the end of mixed-sex wards, another promise. The Government's healthcare policy has failed.

Cross-posted from the TaxPayers' Alliance blog.