Wage controls under which nurses’ pay is set with relatively little extra for working in London or the south-east mean that hospitals in these high-cost areas struggle to recruit and retain staff, according to Carol Propper and Jan Van Reenen, professors at Bristol University’s Centre for Market and Public Organisation and the London School of Economics’ Centre for Economic Performance.

As a result these hospitals have lower productivity and higher fatality rates among patients admitted with heart attacks.

For each 10 per cent rise in the gap between the wages paid to NHS nurses and those paid to nursing staff in the private sector locally, the death rate from heart attacks rises by 5 per cent, the authors say.

“Common sense would say that hospitals located in places where outside opportunities are better are going to struggle to recruit, retain and motivate staff,” they say. “This is exactly what the study finds.” They add that this leads to “lower-quality service provision and poorer outcomes for patients”.

Hospitals in high-wage areas often try to get around recruitment difficulties by relying more on agency staff, who can sometimes be paid extra. “But they often tend to have less experience and training,” the authors say, with that too feeding into the problems with clinical care.

The study covers data from 1995 to 2002, since when London weighting and other cost of living allowances have improved in the south-east, with NHS foundation trusts no longer bound by national pay rates for NHS staff.

But few foundation trusts have introduced any large variance in nurses’ pay. And it remains the case that nurses working in London and the south-east take a bigger pay cut relative to private sector workers than their colleagues in lower-paid areas, Professors Propper and Van Reenen say.

Prof Propper said they were convinced the finding that death rates from heart attacks are higher and productivity lower, is more than just a chance correlation.

A series of other explanations – from pollution, to higher stress in the workforce in the south-east – have been examined and ruled out, while US studies suggest that deaths from heart attacks are “the canary in the mine” as a measure of the quality of healthcare, she said.

From:
http://www.ft.com/cms/s/0/7abaae9e-c877-11dc-94a6-0000779fd2ac.html