Improved NHS productivity could deliver £33bn in annual savings and prevent 20,000 deaths every year

New report argues productivity growth should be mission critical for the NHS to deliver better outcomes for patients and savings to the health budget of nearly 10% by 2040

The Health Foundation’s NHS Productivity Commission has today published a landmark report setting out the huge economic benefits and improvements to patient care that could be achieved through a fundamental rewiring of the NHS in England to improve productivity. 

Leading experts, brought together by the Foundation as part of an 18-month Commission, found that improving NHS productivity - by unlocking technology, empowering staff and increasing capital investment - could reduce future cost pressures, enabling savings of £33bn per year by 2040, equivalent to £460 per person*. 

The report also signals the potential for major improvements in patient outcomes. The authors found that matching the best performing health systems could result in 18,500 - 20,600 fewer deaths each year from treatable causes and 2.5 to 4.5 additional years in good health for every person in the country.

The NHS has worked hard to improve productivity in recent years, which dipped during the pandemic. Although much of the lost ground has been recovered, productivity remains below pre-pandemic levels, with services facing significant operational challenges. Analysis carried out for the report found that, despite consultant numbers rising by 44% in the last decade, the number of patients on the waiting list treated following hospital admission was 5% lower than in 2015/16.

The Commission found that the health service has been consistently held back by short-term planning, fragmented accountability, excessive regulation and insufficient capability to deliver change. It argues that productivity can be improved by using the health system’s existing resources - people, equipment and technology - more effectively. The report sets out ten key recommendations to help deliver the change needed, including: 

• Establishing a stable, 5-year planning and investment framework to support long-term productivity growth
• Creating a dedicated unit tasked with releasing the NHS from unnecessary regulation, reporting and compliance requirements
• Recognising the essential role played by NHS leaders, managers and staff working in managerial, analytical, digital and commercial roles by developing a workforce plan for non-clinical teams
• Establishing a national test-and-learn approach to identify, evaluate and scale models of care and emerging technologies, including capabilities to evaluate, adopt and spread AI at pace
• Strengthening the role of NHS regions and giving greater devolved freedom and responsibilities for improving NHS services and productivity locally

The Commission’s report comes at a key moment for the new government which is facing difficult trade-offs on public spending in the Autumn Budget and next year’s Spending Review. The Office for Budget Responsibility (OBR) projects that health spending could rise from 8.3% of GDP in 2025/26 to 9.5% by 2040/41, leading some to question the future sustainability of the NHS. The authors find that improved productivity could reduce the projected level of health spending to 8.7% of GDP in 2040/41. 

Anita Charlesworth, co-chair of the NHS Productivity Commission and Senior Economic Adviser at the Health Foundation, said: “This is mission critical for the NHS which cannot simply keep doing more of the same. The problem is not a lack of committed and talented people or an absence of ideas; it is that the NHS is not set up to deliver sustained productivity growth. Our research points to a fundamental redesign of the operating conditions – not another disruptive reorganisation, but a reset to make improving productivity a defining focus for the NHS over the next decade and beyond.” 

Tera Allas, co-chair of the NHS Productivity Commission and leading expert on economic growth, productivity and public policy, said: “The NHS exists to support longer, healthier lives – the outcomes that matter most to people. With public finances under real strain, the answer cannot simply be more money or asking staff to work harder. Frequent reorganisations, conflicting priorities, and a thicket of regulatory requirements are diverting precious time and resources away from patient care. A step change in productivity is possible – but only if NHS leaders, staff, the Department of Health and Social Care and the Treasury align behind a shared ambition: delivering better health outcomes from the resources available.” 

 To inform the Commission’s final recommendations, four independently produced policy options papers were developed, each addressing one of four key drivers of productivity; Workforce, Capital, Technology and Innovation and Transformation. These are available on request. 

About the NHS Productivity Commission

The Health Foundation launched the NHS Productivity Commission to provide evidence and identify solutions that can support productivity growth in the NHS in England. 

This report reflects the findings and conclusions of the Commission. The accompanying policy options papers represent the views of the commissioners who authored them. Neither the report nor the papers necessarily represent the views of the Health Foundation or the organisations with which the co-chairs and commissioners are associated.

The Commission was co-chaired by Anita Charlesworth, Senior Economic Adviser at the Health Foundation, and Tera Allas, a leading expert on economic growth, productivity and public policy. The eight commissioners – John Hall and Richard Murray (capital), Habib Naqvi and James Buchan (workforce), Catherine Davies and Matthew Bell (technology and innovation), Ben Gershlick and Rachel Wolf (transformation) – brought expertise from policy, economics and the front-line workforce. They were supported by a secretariat, based at the Health Foundation, and an expert advisory panel, which provided challenge and support, working with the commissioners and secretariat to develop policy solutions.