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Last Updated: Tuesday, 28 February 2006, 08:26 GMT
Just how well is NHS money spent?
By Adam Brimelow
BBC News Health Correspondent

Spending on the NHS in England has more than doubled since Labour came to power.

But with parts of the service in financial crisis, attention has focussed on how well the money is being used.

The key question is: are we getting value for money?

Over the last 18 months or so health economists have been trying to work out a meaningful way of measuring productivity that includes the quality, rather than just the quantity, of its services.

This week the Office for National statistics presented a progress report.

It concluded that by most assessments productivity is stagnant or even falling, but it accepts that the figures need refining.

Fast track

At the cardiac unit in the Royal Brompton hospital in London patients listed for operations are put through a "fit for surgery" assessment.

If we can really concentrate on helping them manage their own conditions, we may be able to prevent the deterioration of their condition
Nigel Edwards

Those who are fit enough are put on a fast track scheme to get them home soon after surgery.

It is an example of what the government calls the "productivity pot of gold" in the NHS, freeing up bed space, cutting cancellations and saving money.

Alvin Robins, who's expecting his heart by pass operation next month, is pleased to be on the scheme.

"It gets me out of the way so that they can use my bed for someone else who needs it maybe more urgently.

"I can see that it's saving them money. It also gives me confidence that they think I'm well enough to receive this sort of treatment.

"Therefore it gives me confidence that my recovery should be fairly quick."

With a quarter of trusts in deficit the need to improve productivity has never been more urgent.

But how do you measure productivity in an organisation as complex as the NHS?

Crude measures

Until now it has been a relatively crude exercise, dividing outputs (such as operations, prescriptions or ambulance trips) by inputs (the resources put in).

The ONS calculates that on this basis productivity in the health service has been falling for the past decade, by between 0.6% and 1.3% a year.

But its executive director Joe Grice says these figures - drawn from the national accounts - don't tell the full story.

We simply do not have a proper measure of the impact that a hospital will have on somebody's health
Professor John Appleby

"The national accounts are a very broad brush measure of performance.

"And we are aware that the figures in the national accounts - the methodology we use - doesn't take any account of quality change.

"And accounting for that quality change is clearly very important to patients certainly and indeed to us as taxpayers as the providers of those services."

The ONS is playing it safe. Alongside its verdict of falling productivity in the NHS, it's presented another that says it is stable, and a third that says it is improving.

The latter two take in tests of quality, such as survival rates and waiting times.

But there is another factor included in the third verdict - taking it into positive territory.

This gives weight to an increased value of health in a more prosperous society - such as the loss of higher earnings if you are sick.

National debate

The ONS now wants a national debate to decide on the best approach.

It admits that a priority for the future must be better information on primary care.

Nigel Edwards from the NHS confederation, which speaks for health trusts, says the focus should be on patients with long-term conditions such as asthma or diabetes.

"If we can really concentrate on helping them manage their own conditions, support them with specialist nurses or other specialist staff in the community, we may be able to prevent the deterioration of their condition or acute exacerbations which require them to go into hospital.

"Incidentally that would count as a loss of productivity in the way that we currently measure it but obviously it's a much better use of resources.

"It may be cheaper but it's certainly better for the patient."

On the treadmill at his local gym in east London, Bert Duffus has taken this approach one step further.

Like his father and uncle before him, he has developed diabetes.

Patient power

But he is part of the NHS "expert patient" programme, managing the condition largely by himself.

And through diet and exercise, he's avoided the need for prescriptions.

"I didn't want to go and see my GP every few weeks to get new medication and new tablets.

"Because there's all sorts of medication coming in and you don't know the side effects. I didn't want to be dependent on medication to control my life.

"I want to control my own life my own way. I know eventually I probably will go on medication but at forty nine I'm too young."

The ONS says it is unlikely that a single number for productivity will ever capture all the costs and benefits of the NHS.

But it wants to develop a more sophisticated and accurate measure.

Professor John Appleby from the health research group the King's Fund says emphasis should be given to asking patients "are you healthier?".

It is already happening in the private sector and at some independent treatment centres.

Key information

Professor Appleby says it could help to deliver a useful measure of productivity in the health service, and would also inform patient choice.

"The crucial bit of information that patients really want in order to make their choices is what is the impact on their health going to be of going to hospital A or hospital B.

"The trouble is we don't produce that kind of information in the health service.

"We simply do not have a proper measure of the impact that a hospital will have on somebody's health."

Clearly there's a long way to go on this, but the intention is to arrive at a consensus - after consultation - on how to measure productivity in the health service.

But the issue is so politically fraught - that this aspiration may prove to be hopelessly optimistic.

NHS productivity rate 'falling'
27 Feb 06 |  Health

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