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Developing new approaches to measuring NHS outputs and productivity


Author Info

  • Diane Dawson

    (Centre for Health Economics, University of York)

  • Hugh Gravelle

    (National Primary Care Research and Development Centre, Centre for Health Economics, University of York)

  • Mary O'Mahony

    (National Institute for Economic and Social Research)

  • Andrew Street

    (Centre for Health Economics, University of York)

  • Martin Weale

    (National Institute for Economic and Social Research)

  • Adriana Castelli

    (Centre for Health Economics, University of York)

  • Rowena Jacobs

    (Centre for Health Economics, University of York)

  • Paul Kind

    (Centre for Health Economics, University of York)

  • Pete Loveridge

    (National Institute for Economic and Social Research)

  • Stephen Martin

    (Department of Economics and Related Studies, University of York)

  • Philip Stevens

    (National Institute for Economic and Social Research)

  • Lucy Stokes

    (National Institute for Economic and Social Research)


The Centre for Health Economics and National Institute of Economic and Social Research have recently completed a project funded by the Department of Health to improve measurement of the productivity of the NHS. The researchers have suggested better ways of measuring both outputs and inputs to improve estimates of productivity growth. Past estimates of NHS output growth have not taken account of changes in quality. The CHE/NIESR team conclude that the routine collection of health outcome data on patients is vital to measure NHS quality. They also propose making better use of existing data to quality adjust output indices to capture improvements in hospital survival rates and reductions in waiting times. With these limited adjustments the team estimate that annual NHS output growth averaged 3.79% between 1998/99 and 2003/04.The research team has also developed improved ways of measuring NHS inputs, particularly by drawing on better information about how many people are employed in the NHS and by recognising that staff are becoming increasingly better qualified. There have been substantial increases in staffing levels, pharmaceutical use and investment in equipment and buildings since 1998/99. The net effect of this growth in both outputs and inputs is that, according to the research team’s estimates, NHS productivity declined by about 1.59% a year since 1998/99. This is not out of line with estimates of growth rates in other UK and US service sectors, including insurance and business services. Nor is it surprising that recent years have seen negative growth in the NHS. There are at least two reasons. First, there has been an unprecedented increase in NHS expenditure. The NHS has had to employ more staff to meet the requirements of the European Working Time Directive and hospital consultants and general practitioners, in particular, have benefited from new pay awards.Second, the NHS collects very little information about what actually happens to patients as a result of their contact with the health service. Until there is routine collection of health outcomes data, measurement of the quality of NHS output will remain partial and productivity growth is likely to be underestimated.

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Bibliographic Info

Paper provided by Centre for Health Economics, University of York in its series Working Papers with number 006cherp.

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Length: 218 pages
Date of creation: Sep 2005
Date of revision: Dec 2005
Handle: RePEc:chy:respap:6cherp

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  3. Andrew Street & Sawsan AbdulHussain, 2004. "Would Roman Soldiers Fight for the Financial Flows Regime? The Re-issue of Diocletian's Edict in the English NHS," Public Money & Management, Taylor & Francis Journals, vol. 24(5), pages 301-308, October.
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Cited by:
  1. Simon Eckermann & Tim Coelli, 2008. "Including quality attributes in a model of health care efficiency: A net benefit approach," CEPA Working Papers Series WP032008, School of Economics, University of Queensland, Australia.
  2. Chris Bojke & Adriana Castelli & Mauro Laudicella & Andrew Street & Padraic Ward, 2010. "Regional variation in the productivity of the English National Health Service," Working Papers 057cherp, Centre for Health Economics, University of York.
  3. Peter Hart, 2007. "Productivity in the National Health Service," Economics & Management Discussion Papers em-dp2007-45, Henley Business School, Reading University.
  4. Giorgio Marini & Andrew Street, 2006. "The administrative costs of payment by results," Working Papers 017cherp, Centre for Health Economics, University of York.
  5. Karen Bloor & Alan Maynard, 2006. "The productivity of health care," Health Economics, John Wiley & Sons, Ltd., vol. 15(12), pages 1257-1259.
  6. Mary O’Mahony & Philip Stevens, 2009. "Output and productivity growth in the education sector: comparisons for the US and UK," Journal of Productivity Analysis, Springer, vol. 31(3), pages 177-194, June.
  7. Paul Schreyer & Matilde Mas, 2013. "Measuring Health Services in the National Accounts: An International Perspective," NBER Chapters, in: Measuring and Modeling Health Care Costs National Bureau of Economic Research, Inc.
  8. Mara Airoldi & Alec Morton, 2009. "Adjusting life for quality or disability: stylistic difference or substantial dispute?," Health Economics, John Wiley & Sons, Ltd., vol. 18(11), pages 1237-1247.
  9. Andrew Sharpe & Celeste Bradley & Hans Messinger, 2007. "The Measurement of Output and Productivity in the Health Care Sector in Canada: An Overview," CSLS Research Reports 2007-06, Centre for the Study of Living Standards.
  10. Andrew Street & Padraic Ward, 2009. "NHS input and productivity growth 2003/4 - 2007/8," Working Papers 047cherp, Centre for Health Economics, University of York.
  11. Adriana Castelli & Mauro Laudicella & Andrew Street, 2008. "Measuring NHS Output Growth," Working Papers 043cherp, Centre for Health Economics, University of York.
  12. Marcella Corsi & Carlo D'Ippoliti, 2013. "The productivity of the public sector: A Classical view," PSL Quarterly Review, Economia civile, vol. 66(267), pages 403-434.
  13. Katharina Hauck & Andrew Street, 2007. "Do targets matter? A comparison of English and Welsh National Health priorities," Health Economics, John Wiley & Sons, Ltd., vol. 16(3), pages 275-290.
  14. Adriana Castelli & Peter C Smith, 2006. "Circulatory Disease in the NHS: Measuring Trends in Hospital Costs and Output," Working Papers 021cherp, Centre for Health Economics, University of York.
  15. Adriana Castelli & Diane Dawson & Hugh Gravelle & Andrew Street, 2007. "Improving the measurement of health system output growth," Health Economics, John Wiley & Sons, Ltd., vol. 16(10), pages 1091-1107.
  16. Anthony Scott, 2005. "The Productivity of Doctors in Australia: The ‘Flat of the Curve’ and Beyond?," Melbourne Institute Working Paper Series wp2005n19, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  17. Corsi, Marcella & D'Ippoliti, Carlo & Gumina, Andrea & Battisti, Michele, 2006. "eGEP Economic Model: Final Report on the Benefits, Costs and Financing of eGovernment," MPRA Paper 34396, University Library of Munich, Germany.


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