Can productivity growth measures identify best performing hospitals? Evidence from the English National Health Service

Health‐care systems around the world face limited financial resources, and England is no exception. The ability of the health‐care system in England to operate within its financial resources depends in part on continually increasing its productivity. One means of achieving this is to identify and disseminate throughout the system the most efficient processes. We examine the annual productivity growth achieved by 151 hospitals over five financial years, using the same methods developed to measure productivity of the National Health Service as a whole. We consider whether there are hospitals that consistently achieve higher than average productivity growth. These could act as examples of good practice for others to follow and provide a means of increasing system performance. We find that the productivity growth of some hospitals over the whole period exhibits better than average performance, but there is little or no evidence of consistency in the performance of these hospitals over adjacent years. Even the best performers exhibit periods of very poor performance and vice versa. We therefore conclude that accepted methods of measuring productivity growth for the health system as a whole do not appear suitable for identifying good performance at the hospital level.