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The NHS is already an efficient health care system, in terms of what is achieved with the funding available. However, with constant pressure to do more with less, finding ways to improve efficiency is always high on the agenda.

What do we mean by efficiency?

When we talk about efficiency, we sometimes mean ‘technical’ efficiency. This is the idea of maximising outputs for a given quantity of inputs, for example, the cost per patient of a specific procedure. 

However, in a health care context, efficiency is not simply a matter of maximising outputs at the lowest possible cost. The quality of care is vital. A doctor could be asked to see more and more patients in a day, reducing the cost per patient, but at some level, the quality of care will decline, and the doctor will be at risk of burnout.

Another useful concept is ‘allocative’ efficiency. Are the available resources being directed towards the right outputs? For example, a high rate of avoidable hospital admissions might suggest that directing resources to primary care could result in an overall improvement in efficiency.

It’s also important to consider the time frame. Investment in new technologies, training, or system reorganisation can have upfront costs but may result in longer-term efficiency gains.

Three questions our Efficiency Research Programme sought to investigate

Our Efficiency Research Programme offered funding for innovative research into issues of efficiency and sustainability with the potential to make a transformational difference to health and social care provision in the UK.

As the first two rounds of the programme draw to a close, we look at what three of the projects it funded can tell us about some of the biggest questions around efficiency in the NHS.

1.    How does new technology affect productivity in the NHS?

Staff costs make up more than half of costs in most health care systems. A team at The London School of Economics and Political Science (LSE) looked at the effect that new health care technologies have on the NHS workforce and workforce planning.

They focused on the uptake of innovative surgical procedures, interviewing clinicians and stakeholders from organisations such as NHS England and clinical commissioning groups to identify procedures that have had a significant impact on working practices. 

One of the changes they looked at in detail was in cardiovascular treatment. The percutaneous transluminal coronary angioplasty (PTCA) procedure has begun to replace the older coronary artery bypass graft (CABG). PTCA is a less invasive and cheaper procedure than CABG to treat cardiovascular disease.

The team analysed data from 79 providers, to measure the uptake of the new procedure and the impact on staffing. 

There were two distinct staffing groups undertaking the two procedures: cardiologists undertake PTCA and cardio-thoracic surgeons undertake CABG. Changing to providing PTCAs had a significant effect on the workforce but did not lead to a reduction in staffing overall. As the number of CABGs being performed decreased, surgeons shifted their activity to other procedures within their medical specialty instead.

Can new technology improve efficiency in the NHS? There won’t always be a straightforward answer.

2.    Can changes to pathways improve efficiency?

Improvements to pathways could lead to improvements in efficiency. Work on pathways could result in hospitals being able to discharge patients sooner through better use of social care, or better use of primary care avoiding demand for emergency care.

A project by the Institute of Fiscal Studies (IFS) looked at health and social care services for older people. It focused on understanding how money is allocated across these services and the effectiveness of spending in terms of health outcomes and wellbeing.

One strand of their work looked at the impact of social care spending on older people attending hospitals. Between 2009/10 and 2017/18, mean per-person long-term care spending fell by 31% as part of a government austerity programme.

The research found that the cuts to care spending led to substantial increases in the number of visits to emergency departments made by people aged 65 and over. The effect was most pronounced among older people and those living in more deprived areas. 

However, there was no wider impact on inpatient or outpatient hospital use, and consequently little impact on overall public hospital costs. 

The results suggest that the austerity programme reduced combined public spending on health and long-term care, but at the cost of adverse effects on the health of vulnerable people. It highlights an important tension in measuring efficiency – how do you balance what is cost-effective against quality of care?

3.    How do we focus on what really matters?

Spending on the wrong things – the things that don’t improve quality or improve the things that matter to people – is inherently inefficient. How do we focus on what really matters?

Mental illness has a significant impact on individuals, society and the economy and it is important to understand how mental health trusts can best use their limited resources. 

A team from the University of York, in partnership with the University of Birmingham and the University of Sheffield, looked at the efficiency, cost and quality of mental health care provision.

In one strand of the project, the team held focus groups with people who use mental health care services and with mental health care professionals, to hear about what matters to people in terms of mental health care quality. From these focus groups, the team derived 10 quality metrics such as person-centred care, and a co-ordinated approach.

These quality attributes were then valued by service users, clinicians and the general public. In another strand of the project, the team analysed large datasets from mental health trusts. 

What patients valued most was good communication, which was different to the data routinely collected to assess the performance of mental health trusts. It suggests that what is measured may not be what matters most to people – and the wrong things could be incentivised as a result.

The team put together a composite measure of quality, based on what mattered to stakeholders, and applied this to mental health care providers. They found there was substantial variation in costs and quality between providers, but no correlation between costs and quality. This implies that high quality providers are not necessarily more expensive, and that it may be possible to improve quality without compromising on cost.

Find out more about the other projects funded through our Efficiency Research Programme


This content originally featured in our email newsletter, which explores perspectives and expert opinion on a different health or health care topic each month.

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