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NHS - failing on productivity, patchy on outcomes

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Paul Mason | 18:08 UK time, Tuesday, 1 July 2008

In 2002 Derek Wanless gave the government the green light to double NHS spending: and issued a stark warning. Unless the NHS got more productive, fast - and unless people got engaged in healthier lifestyles, the cost of a better NHS would be much higher. By 2022 he said, we would be spending one pound in ten on health if everything goes right; one pound in eight if it all goes wrong.

So you might think there'd be somebody in the Treasury or the Department of Health relentlessly monitoring progress against this landmark report. But there is not. I've worked with health experts from the King's Fund and the IPPR to try and take a snapshot of the progress of the NHS against Wanless objectives: I have a sneaking feeling that, having said "thank you very much" for the moral permission to spend extra billions, Wanless has been quietly shunted out of view. But here's what I've found....

Productivity: Just under half the extra money for the NHS has been spent on pay; a lot of the rest has been spent on extra staff. With this massive boost on the input side it would have taken a miracle to raise productivity. The miracle has not happened. Instead, according to Professor John Appleby of the King's Fund, NHS productivity is going backwards.

Activity: NHS figures on activity are called Hospital Episode Statisitics, and they come with such a huge health warning and caveats and "use these at your peril" that you would think the DOH didn't want anybody to publish them. Here's just two of the highlights of the changes between Wanless and today:

a) Emergency admissions: a huge part of the increase in hospital activity is accounted for by emergency admissions. Half of all people in hospital now go in as emergencies - they do not come off any waiting list. Nobody planned this at the time of Wanless and says Professor Appleby "we don't even know if it's a good thing". I've got a theory as to why this has happened though: the four hour wait target for A&E. Professor Appleby agrees: we'd like to hear from health professionals on this...

b) Cataracts: 40% of all the extra operations done since Wanless have been cataract operations. Did anybody envisage, back then, that huge amounts of the extra money would be spent on people's eyes (important as cataracts are to people suffering with them). The spike in cataract performance stands in contrast to relatively modest increases in performance on all other operations. Again I have a theory: there was a target for cataracts AND an incentive. Large numbers of these ops were done by private treatment centres paid on throughput rates.

If I am right then there is an unfashionable conclusion: targets work. These two specific target/incentive regime (the incentive for not missing your 4 hour wait target, as every NHS trust chief exec knows, is avoiding getting your car keys handed to you in a brown paper bag). Specific activity targets lead to spikes in specific activities. But they've also been a magnet for the extra resources in the NHS and I can't find any proof that this outcome has helped meet the government's strategic targets on healthy living.

Public health: Gordon Brown said yesterday, in his intro to the Darzi review, that 230,000 lives have been saved by better survival rates for heart disease and cancer. This is over the 11 years Labour's been in office, not since Wanless, although it's safe to assume recent achievements will continue. In the same paragraph the PM mentioned all the extra staff employed by the NHS and the extra money spent: what he did not do was draw a line of causation between the two - wisely, because it is not yet supported by the evidence. What we do know is that certain public health stats are going backwards:above all obesity, which has risen by 1% since Wanless and measured over the decade has grown even faster,

All this is important because Wanless said it was about now, a quarter of the way into the 20 year spending splurge, that the costs of not reforming the NHS fast enough would begin to show. We would have to spend more to achieve what could have been achieved cheaper. He didn't use the word waste but that's what I would call it: from now on if NHS productivity does not rise, we are wasting money on a massive scale.

I asked the IPPR to calculate the potential funding gap for the NHS, at the 2002 prices used by Wanless, if health spending only rises by 2% per year after 2012; then at 3% per year and finally at 4% a year - its projected growth rate over the next CSR period.

The very worst case scenario is that the NHS will have to spend 32 billion a year more than currently planned by 2018. (2% and Wanless' "slow progress" scenario); it will break even only if it gets a 4% p.a. increase and hits the "fully engaged" scenario. However the bad news is that the health experts I have spoken to indicate there is no chance of meeting the "fully engaged" scenario.

On the available evidence we are somewhere between the median "solid progress" scenario and the worst case. That means, starkly, the extra money will have to come out of taxation: to the tune of between 6 and 16 billion a year says the IPPR at 2002 prices).

Wanless himself called for regular updates on this kind of statistical analysis: but it does not seem that either the Treasury or the DoH is engaged in such work. As one participant on Newsnight's NHS special last night jested "the Darzi report does not contain a single pound sign".

There have now a quarter of a million more staff than pre-Wanless, there have been tens of thousands of extra operations and billions of pounds spent. To the people who work in the NHS - and many who use it (myself included) - it feels better, more effective, less beleaguered. However I am also well aware that in industry, where efficiency and productivity are measured ruthlessly through competition, you can merrily believe you are doing brilliantly - especially after a massive influx of investment and hiring - and then find out that you have in fact been going backwards in terms of productivity. And this can go on for some time until you have to ask for more investment - which is what looks like facing the NHS early next decade.

One final figure from this research has me stumped: treatment of head injuries has risen massively since Wanless - from 130,000 a year to 170,000. I've been trying to get the Royal Colleges to explain this to me, but so far no answer. When I asked my wife, who's a senior nurse, she made that drinking motion Eric Morcambe used to make with an imaginary beer glass. But I cannot believe that even the current popularity of alcopops and cycle riding combined could have produced this spike in head injuries; if any of you medics out there can explain it, I have just time to fit it into tonight's programme.

Watch it on BBC2 on Newsnight at 1030pm (about halfway through the programme). And hit the Comment button if you think any of my analysis is rubbish.


  • Comment number 1.


    The fabric of British life is now money interwoven with alcohol and decorated with Turner Prize art.
    Oversize brains, filled with distressing input, require anaesthetic; substance or pastime.
    The masses are permanently short of sleep and 'long' of mind-altering-intake.
    It might even be they are banging their heads deliberately.

  • Comment number 2.

    Good investigative journalism Paul.

    This is a shocking reminder of how profligate Civil Servants are with our money. I cannot believe that having committed to spend the money recommended in the Wanless Report that NOBODY is responsible for monitoring the effect on NHS productivity and the Nations Health.

    I will be asking my MP (Peter Ainsworth) to raise the matter in the House...

    Why are public bodies not accountable for the money they spend in the same way that happens in the private sector???


  • Comment number 3.

    Nice to see you writing about your research again, Paul. I always enjoy the "good news... bad news" construction you're fond of.

    You won't want to blow the cover of your moles, of course, but could you please include some links to government/other reports etc. so we can read further for ourselves?

    This is particularly important for local and regional debates, because it's hard for people to get their heads around national trends unless they can relate them to personal experiences locally.

    On the same tack, did you get Gerry Robinson to specify the kinds of things he's referring to when he says (on Radio 4 this week) that he knows there's lots of waste in the NHS?

  • Comment number 4.

    Thanks for this. IanSSS - it's not moles, it's the official documentation: I will try to repopulate the main article above with references you can click on. The main data is the Hospital Episode Statistics. Plus the 2007b Kings Fund Report on Wanless revisited and some special number crunching done for us by the IPPR.

  • Comment number 5.

    best report on NN for a while. good show.

  • Comment number 6.

    I was saddened to read your comment "Did anyone envisage that huge amounts of the extra money wouls be spent on people's eyes." I am partially sighted and have received wonderful treatment from the NHS. I know how difficult it can be trying to get about and live a normal life without tripping up and falling over rough, uneven ground, or trying to make one's way around obstacles in one's path.
    People who need cataract operations have poor vision. If they should fall over some obstacle or other they could break a bone or suffer severe bruising. If they end up in an Accident and Emergency Department they would cost the NHS a considerable amount of money, and you have already costed this, so cataract operations are a form of preventative medicine.
    People with poor vision have enough problems getting through each day safely, (do you know how difficult it is to cross a road if you have poorvision?) without putting up with the snide comments of cynical journalists.

  • Comment number 7.

    Aprilsunset. I think you have got 'the wrong end of the stick'.

    Paul was not making any snide comments. He was using the cateract example to show his theory of how Targets and Incentives can affect how the NHS operates.

    This was a good example to show and I am sure he appreciates that poor eyesight is an awful thing to have.

  • Comment number 8.

    There was a serious error in your NHS Spending item should have edited out. The man you had in your report, John Crabtree, was completely wrong in his statement that diabetes is a “preventable disease”. He said in his interview, with regard to higher admissions to hospitals, “preventable diseases .. things like diabetes...”

    That is totally inaccurate.

    Type 1 diabetes is caused by a genetic problem with the pancreas.

    Type 2 can be caused by diet.

    Type 1 is not the result of too many nights out at the local Burger King.

    Maybe you could cut and paste the quote below and forward it John Crantree.

    “when someone has the disorder called diabetes, their body has trouble controlling the level of glucose in its blood. Either the person's pancreas can't make insulin, or can't make enough insulin, or their body has a problem using the insulin it does make”.

    JDRF web site.

    You may say that it was a slip of the tongue for Crabtree but he should know better. It is also not helpful that Newsnight may encourage the public to think that all Diabetes sufferers only have themselves to blame. Nothing could be further from the truth.


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