Efficiency & productivity

Historically the NHS has enjoyed real-terms spending increases that exceed rates of national income growth. In the current context of deficit reduction however, this trend has been brought to a halt.

An ageing population, and other factors, is creating a rapidly growing gap between demand for health services and capacity to provide them at the current rate of productivity.

Recent research commissioned by the Nuffield Trust shows that the ‘Nicholson challenge’ – to find £20 billion in savings by 2015 – is likely to be only the start of a drive for productivity which may need to run to at least 2020.

If the health service is to maintain the levels of care it provides, free at the point of use, then significant savings must be found

This research is part of our wider programme of work that is addressing the scale of the financial challenge facing the NHS and how it can be met. The project aims to put real figures to the scale of the productivity challenge facing the NHS, and to look at where the scope for efficiencies rest.

Our aim is to support policy-makers addressing this unprecedented challenge by providing robust evidence and new ideas.

^{International experts including Nigel Edwards, KPMG and Professor Dr Reinhard Busse, Berlin University of Technology, Germany and EuroDRG Project, on achieving high-value, financially sustainable health care.}

We have a range of other projects that are supporting policy-makers and practitioners to respond to the NHS’ financial challenge, including:

• The quest for efficiency in the English NHS, which is examining two key areas for efficiency improvement: better provider (technical) productivity and better commissioning (allocative) productivity;
• an annual programme of research on the financial performance of the NHS – our aim is to become a centre of expertise and data on the flow of resources around the NHS;
• a project that is analysing the evidence put forward for changing aspects of funding both the NHS and social care;
• a number of evaluative studies into the impact of community-based initiatives designed to reduce hospital admissions and costs, such as telehealth and telecare services.

_{Photo credit: Army Medicine, Flickr}