NHS hospital efficiency: closing the gap

Blog post

Published: 12/01/2012

The main question raised by our newly published research report: Can NHS hospitals do more with less? is why, when so much is known about what drives and can improve hospital efficiency, is there still so much variation across, and sometimes within, individual hospitals?

The areas highlighted for action read like the contents list of a textbook of health care management, with topics such as: ensuring that length of stay and day case rates are in line with international best practice; exploring ways of using new technology to improve hospital processes; rationalising back-office functions; maximising use of staff skill-mix; and carrying out procurement according to national benchmarks.

Of course, as with so much within health care management (and indeed clinical practice) getting the evidence translated into the reality of day to day working is a difficult task.

For a health care manager, finding ways of changing the minutiae of myriad professionals' and other staff's working lives, and doing this in a way that tackles the longstanding 'way we do things round here', is probably the most challenging and enduring part of their role.

The good news in this new research report is that it sets out robust international evidence about the most promising areas where efficiencies might be made. This includes the reminder of keeping attention focused on the 'basics' of length of stay, day case rates, and back office functions.

Less frequently discussed areas which are highlighted for action include: ensuring a richness of skill-mix if seeking to reduce staff numbers; focusing re-engineering efforts on services with high reference costs (for re-engineering can risk costing more than it saves, if not wisely applied); and using IT to streamline administrative processes within hospitals.

The policy analysis written by the Nuffield Trust to accompany the new report makes it clear that the challenge is not just one for hospitals and those who run them. Structural deficits within the acute sector inevitably have a knock on effect on the amounts available to commissioners to fund a full range of locally appropriate services.

A set of recommendations for policy-makers is laid out alongside the advice to practitioners, and these are targeted at the NHS Commissioning Board (now NHS England) and Monitor in particular.

The suggestions include providing direction to commissioners and providers about how to respond to NICE guidance on optimal practice, 'do not do' procedures, cost-saving technologies and 'invest to save' initiatives, and for these to be built into the performance management of commissioning through the new Commissioning Outcomes Framework.

In the case of Monitor as the new system regulator, it is proposed that it gives guidance on efficiency practices through its compliance role with foundation trusts, and ensures that promising innovations are tracked and evaluated.

This study reaffirms the importance of good management in general, and certain management practices in particular, when it comes to achieving greater productivity without compromising quality.

Key to this are the provision of better and more timely benchmarking information across administrative and clinical activities, the development of stronger incentives for providers (applied by commissioners) to reduce variation, and NHS leadership that feels able to be creative and bold in challenging and changing local management and clinical practice.

The report has been undertaken by independent researchers as part of a two-year programme of research: The quest for efficiency in the English NHS, which seeks to provide further evidence about how government policies and the activities of commissioners and providers can maintain and improve care at a time of severe financial constraint.

Whilst some of the studies in this programme are concerned with how funding priorities are set or how the overall NHS benefits package is determined, the report: Can NHS hospitals do more with less?, underlines the need for commissioners and providers to first of all work to improve the efficiency of existing services.

If managers and policy-makers are to have any legitimacy trying to persuade the public of the need for difficult rationing decisions, the NHS will need to be well on the way to closing the gap between the most and least efficient hospitals (and indeed other providers). Otherwise the message from voters is likely to be ‘think again’.

This blog is also available to read on the Public Finance website.

Suggested citation

Smith J (2012) ‘NHS hospital efficiency: closing the gap’. Nuffield Trust comment, 12 January 2012. https://www.nuffieldtrust.org.uk/news-item/nhs-hospital-efficiency-closing-the-gap