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Editor's blog Friday 24 December 2010: 'Efficiency, efficiency, at which none can be matched''

It's very tempting to refract all of NHSland and health policy through children's television.

There are too many parallels for comfort: strategic health authorities as the large and largely pointless Haa-Hoos from In The Night Garden; GP practice-based commissioners as Bagpuss - "and when Bagpuss wakes up, all his friends wake up too!"; and SoS Lansley as, well, La La from the Teletubbies.

But the one from today is the biscuit factory in Chigley - which resonates to a merry Stakhanovite tune whose lyrics conclude "efficiency, efficiency, at which none can be matched".

Two recent publications from the abbatoir-bound Audit Commission (More For Less 2009-10) and the survivor-guilt-bound National Audit Office (Management Of NHS Hospital Productivity) have concluded that NHS efficiency is ... um, how to put this nicely in the season of goodwill to all folk? ... not perhaps all it might conceivably be. Details of each follow below.

This is not a surprise.

Two main reasons: the first is the long years of inadequate funding the NHS had seen through much of the 1980s and 1990s - check out your copy of the Wanless Reports for the data. So catch-up was inevitable.

The second is that just by sheer statistical definition, if you give something a lot more funding and staff, then shy of a miracle you make it less efficient.

Miracles have gone out of fashion. And of course, working practices, patterns and customs are tough to change.

That was the big point made by Professor Aidan Halligan, who committed what many saw as career suicide when he wrote, "throwing money at the problem only allows us to do more of what we have always done. Any suggestion of real reform has ben a deceit: working patterns, practices and customs are at the heart of many capacity issues and have never been challenged", which I published in the British Journal Of Healthcare Management in April 2006.

Aidan told the truth; something which has long been a career-challenging endeavour in NHSland. He was of course right. And he is much happier now, dividing his time between working with hospitals, setting up a healthcare service for the homeless in London and pushing for an NHS staff college.

Nor is this news. It was the great Professor Alan Maynard who first told me that the 1976 DHSS (as it then was) Priorities for Health And Social Care called for more day surgery and greater attention to variation in clinical practice and performance.

We know about this stuff, and we have known for a long time.

We just don't change it.

Why? Because changing things is much harder than it should be in an NHS riddled with 'Not Invented Here' Syndrome. During a period when I used to chair a fair number of NHS conferences, it was startling how often delegate questions revealed staggering complacency about why a proven innovation wouldn't work for them locally, or claimed it was just a version of something they were already doing.

On the whole, a learning organisation is what the NHS most certainly is not - which is why the abolition of the NHS Modernisation Agency was such a criminally stupid move.

Why does so much of the NHS not like to learn? Hardened older managers point to the long-standing and successful tradition of whining for more money from the health authority or Whitehall. If such a tactic ain't broke, people won;t fix it.

It's broke now.  The 'spending your way out of trouble' option has been greyed-out on the drop-down menu. Which means we might get some real change - although a massive top-down redisorganisation of the NHS could equally totally screw it up ... and the evidence says that is likely.

There is a lot of risk coming our way in 2011. As Nick Bosanquet has been pointing out for some time, November next year will be a bad time to get ill in quite a few places.

Many good people are staring down the barrel of redundancy. If you are one, this will not feel like a season to be jolly. Team Health Policy Insight can only wish you good luck and success elsewhere in 2011.

For everybody else, who will be driving the NHS into Chigley-style"efficiency, efficiency at which none can be matched", good luck and have a Happy Christmas.

Andy Cowper


NAO on declining NHS productivity
The new National Audit Office report has found  that during the period of increased funding since 2000, average NHS productivity for the UK has fallen by 0.2%, with hospital productivity dropping by 1.4%.

Amyas Morse, head of the NAO, said: "Over the last 10 years, there has been significant real growth in the resources going into the NHS, most of it funding higher staff pay and increases in headcount. The evidence shows that productivity in the same period has gone down, particularly in hospitals."

It concludes there are risks to the delivery of the QIPP national initiative to help the NHS deliver cumulative savings of up to £20 billion over four years, which is the responsibility of Strategic Health Authorities and Primary Care Trusts, whose focus may be distracted by the proposals for their closure by 2013.

The report attributes NHS providers’ productivity decline to an emphasis on meeting national priorities: money has been used to pay for staff, reduced waiting times, improved facilities and higher quality care. Overall levels of activity have not increased at the same rate as resources.

It finds that the ‘Payment by Results’ system of setting national tariffs has promoted some efficient practice, such as reductions in the length of time patients spend in hospital and more operations taking place as day cases. However, there is still substantial variation between hospitals: for example, in the money spent by hospital to provide the same treatment. If all hospitals performed at the level of the top 25 per cent in respect of staff costs, use of estate, control of emergency admissions and bed management, the NAO estimates that the NHS could save around £1.6 billion a year.

Other initiatives to increase productivity, such as the ‘Productive Ward’ scheme, are not consistently or comprehensively used.

Pay contracts implemented since 2003 have increased costs and not always used to improve productivity. The report emphasises the failure to align consultants' activity with hospital objectives.

Delays in rolling out the Payment by Results (PbR) scheme have left about 40% of hospitals' income not covered, and that the quality of information used to pay hospitals has been variable.

The NAO recommends:
- any future national pay contracts should set out the expected productivity gains and efficiency savings;
- an alignment of the national tariffs in PbR and associated business rules with expected efficiency gains;
- a review of the accuracy of costing data;
- an assessment of costs and benefits of national initiatives; and
- the production of new data on quality such as patient reported outcome measures (and the current UK measure should, if possible, be disaggregated for the devolved administrations and by type of healthcare service).

Audit Commission on NHS productivity

More For Less 2009-10, a new briefing from the Audit Commission on NHS productivity (http://www.audit-commission.gov.uk/moreforless2embargo), suggests that:

* Trusts could save over £200 million per year by doing more day surgery.

* By reducing the cost of nursing per hospital bed to the average, trusts could save £300 million, or £500 million if they reduced to the performance of their most efficient peers.

* Primary care trusts could make savings of £700 million per year if those with more than the expected number of emergency admissions reduced to the average. The variation is far higher than can be explained by differences in ill-health alone.

* Hospital readmissions, which have risen by 7 per cent in five years, and cost £1.5 billion in 2009 could be reduced by introducing more effective public health strategies on smoking and alcohol.

The study reveals how and where primary care trusts (PCTs) spent their money in 2009/10 and how trust income changed. It also looks at how successful the NHS has been in moving care out of hospitals to more cost-effective settings. It finds that since the Commission published a similar analysis in 2009, many key markers of success in improving productivity have remained virtually static.

The NHS did make improvements in some areas over the last year, and some aspects of hospital efficiency improved. PCTs have invested heavily in community services that could provide more cost effective care outside hospitals. But nationally the Audit Commission found no identifiable shift to providing services in this way.

But while gains were made in some areas, other areas targeted for change saw no improvement. Emergency (non-elective) admissions to hospitals continued to grow at 3 per cent a year and the numbers of outpatients continued to rise. Achieving changes in these areas is a crucial part of the health service’s Quality Innovation Productivity and Prevention (QIPP) programme.

Audit Commission head of health Andy McKeon says,”The NHS has a daunting task ahead of it to cut costs by £15-20 billion by 2014 .The QIPP programme depends on the NHS reversing some long-standing trends of rising numbers of emergency admissions, improving hospital productivity and providing more care, more cost effectively, outside hospitals.

“The underlying message is that those who commission NHS services need to find different, better, ways of meeting people’s needs. All those who provide services need to cut costs”.