Why is NHS productivity falling- yet Labour claims it could be rising?
The Office for National Statistics started a fierce disagreement over output and productivity in the National Health Service this week as it launched a consultation into the issue. The ONS reported that different techniques could show NHS productivity rose by 1.6 per cent a year between 1999 and 2004 or that it fell by 1.5 per cent a year. Official figures show a decline of close to 1 per cent a year.
Karen Dunnell, the national statistician, said no decisions had been taken and she wanted to "stimulate a public discussion", although Patricia Hewitt, health secretary, assumed big upward revisions were in the bag.
"As the Office for National Statistics estimates, NHS productivity is rising," she said, adding: "We're pleased the ONS has, for the first time, included the quality of NHS services into their measure of productivity."
However, Andrew Lansley, the shadow health secretary, stuck to the existing measure of productivity and insisted the ONS report showed this "had fallen further and faster than was believed to be the case".
The big issues relate to the inclusion of quality-improvements in NHS output measures and whether any account should be taken of the changing value of the NHS to society.
The Department of Health's preferred view raises NHS output by 2.68 percentage points a year, while independent research by the National Institute of Economic and Social Research and the University of York recently estimated a more modest uplift to NHS output of 0.17 percentage points. This would not be enough to show rising health productivity.
The most controversial element in the department's reasoning is an automatic 1.5 percentage point a year uplift in measured NHS output to reflect the increased value of public services as society becomes richer. The principle of such an adjustment was recommended in last year's review of public sector productivity, led by Sir Tony Atkinson.
Martin Weale, director of NIESR, said this automatic adjustment did not have much theoretical basis. He argued that while the contribution of the NHS to society's well-being might rise with overall prosperity, the volume of NHS output and productivity did not.
Quality adjustment of NHS output is widely accepted, but there remains little agreement on the best methods.
The Department of Health, for example, finds that increased use of statins, the drugs used to lower cholesterol, extended and improved patients' lives so much that NHS output growth should be measured as 0.81 percentage points higher than previously.
Mr Weale, however, said that if this assumption was included in NHS output, it should not improve the NHS's productivity substantially because the gains were largely attributable to pharmaceutical companies.
Another problem was the Department of Health's assumption that patients' satisfaction at cleaner hospitals has as much weight in its calculations as the NHS's ability to save lives. Andrew Street, a senior research fellow at the University of York, said there was no "empirical basis for the weights" the department used.
Mr Street said the estimates in the NIESR/York study were likely to be on the low side, since the data were inadequate for a proper quality assessment.
http://news.ft.com/cms/s/f0663f86-a7ff-11da-85bc-0000779e2340.html
Karen Dunnell, the national statistician, said no decisions had been taken and she wanted to "stimulate a public discussion", although Patricia Hewitt, health secretary, assumed big upward revisions were in the bag.
"As the Office for National Statistics estimates, NHS productivity is rising," she said, adding: "We're pleased the ONS has, for the first time, included the quality of NHS services into their measure of productivity."
However, Andrew Lansley, the shadow health secretary, stuck to the existing measure of productivity and insisted the ONS report showed this "had fallen further and faster than was believed to be the case".
The big issues relate to the inclusion of quality-improvements in NHS output measures and whether any account should be taken of the changing value of the NHS to society.
The Department of Health's preferred view raises NHS output by 2.68 percentage points a year, while independent research by the National Institute of Economic and Social Research and the University of York recently estimated a more modest uplift to NHS output of 0.17 percentage points. This would not be enough to show rising health productivity.
The most controversial element in the department's reasoning is an automatic 1.5 percentage point a year uplift in measured NHS output to reflect the increased value of public services as society becomes richer. The principle of such an adjustment was recommended in last year's review of public sector productivity, led by Sir Tony Atkinson.
Martin Weale, director of NIESR, said this automatic adjustment did not have much theoretical basis. He argued that while the contribution of the NHS to society's well-being might rise with overall prosperity, the volume of NHS output and productivity did not.
Quality adjustment of NHS output is widely accepted, but there remains little agreement on the best methods.
The Department of Health, for example, finds that increased use of statins, the drugs used to lower cholesterol, extended and improved patients' lives so much that NHS output growth should be measured as 0.81 percentage points higher than previously.
Mr Weale, however, said that if this assumption was included in NHS output, it should not improve the NHS's productivity substantially because the gains were largely attributable to pharmaceutical companies.
Another problem was the Department of Health's assumption that patients' satisfaction at cleaner hospitals has as much weight in its calculations as the NHS's ability to save lives. Andrew Street, a senior research fellow at the University of York, said there was no "empirical basis for the weights" the department used.
Mr Street said the estimates in the NIESR/York study were likely to be on the low side, since the data were inadequate for a proper quality assessment.
http://news.ft.com/cms/s/f0663f86-a7ff-11da-85bc-0000779e2340.html
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