Operational productivity in hospitals: part 3

11 July 2016

It is important in any healthcare system to focus on the operational productivity of hospitals. But we should not delude ourselves that by doing this we can solve the current problems of the NHS. The funding and service delivery problems of the NHS are deep-rooted and complex, in some respects going back to the care silos which the NHS has had since it started.

We are now in a situation where NHS provider trusts have a record deficit of £2.5 billion a year and rising. Most of this is in the acute hospital trusts. Even high-performing hospital trusts like the Queen Elizabeth Hospital in Birmingham cannot balance their books. The NHS acute hospital sector is now the victim of massive rising demand and a failure to rebalance the NHS service delivery system over many years to contain more of that demand outside the hospital sector.

What has happened since 2010 is that there are a million more patients a year in A&E departments; hospitals are performing a million more operations a year; and GPs are undertaking over two million more consultations a year – many of these leading to hospital admissions. All to be tackled with a real terms flat-lining funding strategy of around 1% a year. The tsunami of patients – many very elderly with co-morbidities – have broken down the NHS gatekeeping system.

Of course the acute hospital system could improve its efficiency as Lord Carter’s Review has shown. That review revealed unwarranted variation in running costs, sickness absence, infection rates and prices paid for goods and services. That review developed the idea of a ‘model hospital’ that could save NHS hospitals £5 billion a year by 2020-21. All highly desirable but even if it was achieved at least half that sum would go to pay off the current deficit.

The evidence now is that too many patients are going through acute hospitals; we have failed to invest over a long period of time in alternatives, including prevention and social care; and we lack an NHS workforce and investment strategy to deliver a major change of direction. The Five Year Forward   View represents a sensible way forward and the idea of geographical Sustainable Transformation Plans seems worth pursuing; but doubts must remain whether these initiatives can change things fast enough to halt the NHS’s decline.

Lord Warner, member, NHS Sustainability Committee and former Minister of State, Department of Health

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