Author: Great Britain: National Audit Office

Publisher: The Stationery Office

Published: 2010-12-17

Total Pages: 44

ISBN-13: 9780102970029

Productivity in hospitals has been falling by around 1.4 per cent a year since 2000 whilst NHS expenditure has increased by over two thirds in ten years. The Department of Health has achieved significant improvements in such areas as waiting times, healthcare associated infection rates, patient outcomes, reduced cancer mortality and the patient experience. However, the NHS pay contracts introduced since 2003 have increased costs but are not always used effectively by hospitals to drive productivity improvements. The NHS needs to deliver between £15 billion and £20 billion of efficiency savings per year by 2013-14. Around 40 per cent of these savings are expected to come from increasing efficiency in hospitals, requiring productivity gains of approximately six per cent per annum. The 'Payment by Results' system of setting national tariffs has promoted some efficient practice, but there is still substantial variation between hospitals. If all hospitals performed at the level of the top 25 per cent in respect of staff costs, use of estate, control of emergency admissions and bed management, the NAO estimates that the NHS could save around £1.6 billion a year. The Department has launched a national initiative (QIPP) to help the NHS deliver annual savings of up to £20 billion. There are risks to the delivery of the initiative, which is the responsibility of Strategic Health Authorities and Primary Care Trusts, whose focus may be distracted by the proposals for their closure by 2013.