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NHS hospitals will struggle to meet productivity targets

Many NHS hospitals will struggle to deliver productivity improvements essential to maintaining quality and avoiding significant cuts to services, according to the latest quarterly monitoring report on NHS performance published by The King’s Fund.

The majority of finance directors from NHS providers questioned for this quarter’s report revealed that their trusts face productivity targets for 2011/12 of 6 per cent or more – well above the level required across the NHS as a whole to deliver the £20 billion in efficiency savings needed by 2015. Of these, more than half said they are ‘uncertain’ of meeting their targets. (1)

The key findings obtained from our panel of NHS finance directors are:

  • of the 29 finance directors who responded, 27 said their trust has a productivity target of 4 per cent or more, with 13 of these having targets of 6 per cent or more – all of them from provider organisations
  • around half the panel are uncertain of meeting their targets, while eight of the 13 panellists with targets of 6 per cent or more are uncertain of meeting them
  • 26 of the 29 finance directors expect their trust to break even or be in surplus at the end of the year, with three expecting to be in deficit
  • the majority are confident that measures taken to meet their targets will not harm clinical quality, although around a quarter are uncertain or concerned about this
  • nearly half the panel are pessimistic about the financial prospects for their local health economy, with only five of the panellists optimistic about this.

These findings highlight the pressure on NHS providers in particular as the health system struggles to deliver significant improvements in productivity. It suggests that providers are facing higher targets than commissioners, perhaps indicating that the government sees them as better placed to deliver the improvements needed, given the upheaval faced by commissioners as a result of the health reforms. The findings also highlight concern about the prospects for NHS finances as the spending squeeze begins to bite, with three panellists expecting their trust to be in deficit at the end of the financial year.

The report also includes analysis of the latest NHS key performance data.

  • Median waits for hospital treatment rose in May 2011, but the proportion of patients waiting 18 weeks or longer for treatment fell for the third consecutive month. (3)
  • The median waiting time for diagnostic tests fell in May 2011, although the number of patients waiting six weeks or longer is at its highest level since February 2008. (4)
  • The proportion of patients waiting longer than four hours in A&E fell back slightly at the beginning of 2011 but remains higher than at any time since 2004. (5)
  • Levels of hospital-acquired infections remain low compared to their peak in 2008. (6)
  • The six months to March 2011 saw an almost threefold increase in the number of compulsory redundancies – more than 1,200 NHS staff were made redundant in the last quarter of 2011/12, of whom more than 200 were clinical staff. (7)
  • Delays in transferring patients out of hospital remain stable. (8)

The analysis on waiting times follows the Prime Minister’s recent pledge to keep waiting times ‘low’, although the data it is based on pre-dates the pledge. (2) It reveals a complex picture – while they are still low by historical standards and median waits for diagnostic tests and hospital treatment remain reasonably stable, waiting times have risen against a number of key target measures since the coalition government relaxed performance management shortly after coming into office.

Professor John Appleby, Chief Economist at The King’s Fund said:

‘This quarter’s report suggests that the government is looking to NHS providers to deliver the lion’s share of productivity improvements, with many facing very tough cost improvement targets as a result. Based on the feedback we received, there must be significant doubt about whether many of these targets will be met. While waiting times remain low in historical terms, the rise against key target measures since this time last year shows how difficult it will be for the NHS to meet the Prime Minister’s pledge to keep waiting times low as the spending squeeze begins to bite.’

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