Productivity in the NHS 'stubbornly stagnant', reveals report: Growing number of health service organisations getting into financial difficulties, says Nuffield Trust study.
Productivity in the NHS remains "stubbornly stagnant", its workforce is shrinking and GP surgeries are receiving less money than before to spend on patient care, a report has revealed.
A growing number of NHS organisations, especially hospital trusts, are getting into financial difficulties partly because of the cost of private finance initiative (PFI) deals. And exposing health services to competition makes staff less, rather than more, productive, the analysis of NHS finances shows.
But despite its tight budget and rising demand for healthcare, the NHS in England still generated a £1.4bn surplus last year from its £105.4bn budget, which the Treasury mostly clawed back, giving just £316m back to the Department of Health, says the report by the Nuffield Trust health thinktank.
It found NHS staff are not improving their working practices despite the service having to find £20bn of efficiency savings by 2015. While hospitals and other providers of acute care had delivered £2.8bn towards that target in 2011-12, "underlying hospital labour productivity remains stubbornly stagnant", said Anita Charlesworth, the Nuffield chief economist.
Apart from a slight rise in 2010-11 there has been "relatively little improvement in the labour productivity of NHS acute hospitals in recent years" and a fall in 2011-12, the report found, although hospitals in the south of England seem to have higher productivity than those in the north.
Andy Burnham, the shadow health secretary, blamed the poor productivity picture on staff having been "distracted by the government's NHS reorganisation".
The report raises the prospect of more hospitals experiencing a major financial crisis like that at the South London Healthcare trust. The number of NHS trusts failing to balance their books has been rising steadily and reached 32 out of 250 in 2011-12, nine of which had not broken even for at least three years and "have limited scope to resolve their financial difficulties", it warns.
The cost of PFI repayments rose sharply, from £459m in 2009-10 to £628.7m last year – a rise of 18% a year two years in a row – and has "started to become a particular burden for a number of trusts". Dartford and Gravesham NHS Trust spends 7.9% of its income servicing such debts, for example.
While spending on community health services and hospital care has risen, GPs have seen their budgets stay flat since 2005 and fall in each of the last two years. Last year's 1.2% fall is worrying because GPs are vital to the NHS achieving its goal of keeping more patients, especially the frail elderly and those with long-term conditions, out of hospital by increasingly treating them in or near their own homes, Charlesworth added. GPs may be left with too little money to help ensure those changes happen, she said.
The NHS saved more than £1bn by shedding 29,111 staff between 2010-11 and 2011-12. But Dr Mark Porter, chairman of the British Medical Association, said doctors were concerned that quality of care should not be sacrificed in the drive to become more efficient.
Nurses at trusts which have continual financial trouble are worried their employers' focus on finances may mean they struggle to keep delivering high-quality care, added Dr Peter Carter, chief executive of the Royal College of Nursing.
"This report shows the NHS needs to be more efficient than it has been to deliver sustainable, high quality services for patients," said Lord Howe, the health minister.
"The NHS has made a good start at delivering these efficiency improvements, and is forecasting to have made £10.8bn of savings [of the £20bn] by the end of this year. All of these savings are available to reinvest in frontline care." The Guardian
Productivity in the NHS remains "stubbornly stagnant", its workforce is shrinking and GP surgeries are receiving less money than before to spend on patient care, a report has revealed.
A growing number of NHS organisations, especially hospital trusts, are getting into financial difficulties partly because of the cost of private finance initiative (PFI) deals. And exposing health services to competition makes staff less, rather than more, productive, the analysis of NHS finances shows.
But despite its tight budget and rising demand for healthcare, the NHS in England still generated a £1.4bn surplus last year from its £105.4bn budget, which the Treasury mostly clawed back, giving just £316m back to the Department of Health, says the report by the Nuffield Trust health thinktank.
It found NHS staff are not improving their working practices despite the service having to find £20bn of efficiency savings by 2015. While hospitals and other providers of acute care had delivered £2.8bn towards that target in 2011-12, "underlying hospital labour productivity remains stubbornly stagnant", said Anita Charlesworth, the Nuffield chief economist.
Apart from a slight rise in 2010-11 there has been "relatively little improvement in the labour productivity of NHS acute hospitals in recent years" and a fall in 2011-12, the report found, although hospitals in the south of England seem to have higher productivity than those in the north.
Andy Burnham, the shadow health secretary, blamed the poor productivity picture on staff having been "distracted by the government's NHS reorganisation".
The report raises the prospect of more hospitals experiencing a major financial crisis like that at the South London Healthcare trust. The number of NHS trusts failing to balance their books has been rising steadily and reached 32 out of 250 in 2011-12, nine of which had not broken even for at least three years and "have limited scope to resolve their financial difficulties", it warns.
The cost of PFI repayments rose sharply, from £459m in 2009-10 to £628.7m last year – a rise of 18% a year two years in a row – and has "started to become a particular burden for a number of trusts". Dartford and Gravesham NHS Trust spends 7.9% of its income servicing such debts, for example.
While spending on community health services and hospital care has risen, GPs have seen their budgets stay flat since 2005 and fall in each of the last two years. Last year's 1.2% fall is worrying because GPs are vital to the NHS achieving its goal of keeping more patients, especially the frail elderly and those with long-term conditions, out of hospital by increasingly treating them in or near their own homes, Charlesworth added. GPs may be left with too little money to help ensure those changes happen, she said.
The NHS saved more than £1bn by shedding 29,111 staff between 2010-11 and 2011-12. But Dr Mark Porter, chairman of the British Medical Association, said doctors were concerned that quality of care should not be sacrificed in the drive to become more efficient.
Nurses at trusts which have continual financial trouble are worried their employers' focus on finances may mean they struggle to keep delivering high-quality care, added Dr Peter Carter, chief executive of the Royal College of Nursing.
"This report shows the NHS needs to be more efficient than it has been to deliver sustainable, high quality services for patients," said Lord Howe, the health minister.
"The NHS has made a good start at delivering these efficiency improvements, and is forecasting to have made £10.8bn of savings [of the £20bn] by the end of this year. All of these savings are available to reinvest in frontline care." The Guardian
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