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Developing new approaches to measuring NHS outputs and productivity


  • 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.

Suggested Citation

  • Diane Dawson & Hugh Gravelle & Mary O'Mahony & Andrew Street & Martin Weale & Adriana Castelli & Rowena Jacobs & Paul Kind & Pete Loveridge & Stephen Martin & Philip Stevens & Lucy Stokes, 2005. "Developing new approaches to measuring NHS outputs and productivity," Working Papers 006cherp, Centre for Health Economics, University of York, revised Dec 2005.
  • Handle: RePEc:chy:respap:6cherp

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    References listed on IDEAS

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    Cited by:

    1. Chris Bojke & Adriana Castelli & Rosalind Goudie & Andrew Street & Padraic Ward, 2012. "Productivity of the English National Health Service 2003-4 to 2009-10," Working Papers 076cherp, Centre for Health Economics, University of York.
    2. Adriana Castelli & Andrew Street & Rossella Verzulli & Padraic Ward, 2015. "Examining variations in hospital productivity in the English NHS," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(3), pages 243-254, April.
    3. María José Aragón & Martin Chalkley & Adriana Castelli & James Gaughan, 2016. "Hospital productivity growth in the English NHS 2008/09 to 2013/14," Working Papers 138cherp, Centre for Health Economics, University of York.
    4. 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.
    5. 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.
    6. 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.
    7. Adriana Castelli & Mauro Laudicella & Andrew Street, 2008. "Measuring NHS Output Growth," Working Papers 043cherp, Centre for Health Economics, University of York.
    8. 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.
    9. Peter Hart, 2007. "Productivity in the National Health Service," Economics & Management Discussion Papers em-dp2007-45, Henley Business School, Reading University.
    10. Anne E. Hall, 2015. "Adjusting the Measurement of the Output of the Medical Sector for Quality: A Review of the Literature," BEA Working Papers 0122, Bureau of Economic Analysis.
    11. 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.
    12. 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.
    13. Giorgio Marini & Andrew Street, 2006. "The administrative costs of payment by results," Working Papers 017cherp, Centre for Health Economics, University of York.
    14. Wulong Gu & Jiang Li, 2015. "Productivity in Residential Care Facilities in Canada, 1984-2009," International Productivity Monitor, Centre for the Study of Living Standards, vol. 29, pages 18-37, Fall.
    15. 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.
    16. 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.
    17. Andrew Street & Padraic Ward, 2009. "NHS input and productivity growth 2003/4 - 2007/8," Working Papers 047cherp, Centre for Health Economics, University of York.
    18. Eckermann, Simon & Coelli, Tim, 2013. "Including quality attributes in efficiency measures consistent with net benefit: Creating incentives for evidence based medicine in practice," Social Science & Medicine, Elsevier, vol. 76(C), pages 159-168.
    19. Vincenzo Atella & Federico Belotti & Chris Bojke & Adriana Castelli & Katja Grašic & Joanna Kopinska & Andrea Piano Mortari & Andrew Street, 2017. "Against All Odds: The Contribution of the Healthcare Sector to Productivity. Evidence from Italy and UK from 2004 to 2011," CEIS Research Paper 418, Tor Vergata University, CEIS, revised 12 Dec 2017.
    20. Chris Bojke & Adriana Castelli & Andrew Street & Padraic Ward & Mauro Laudicella, 2013. "Regional Variation In The Productivity Of The English National Health Service," Health Economics, John Wiley & Sons, Ltd., vol. 22(2), pages 194-211, February.
    21. Paul Schreyer & Matilde Mas, 2016. "Measuring Health Services in the National Accounts: An International Perspective," NBER Chapters,in: Measuring and Modeling Health Care Costs, pages 25-52 National Bureau of Economic Research, Inc.
    22. Karen Bloor & Alan Maynard, 2006. "The productivity of health care," Health Economics, John Wiley & Sons, Ltd., vol. 15(12), pages 1257-1259.
    23. 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.
    24. 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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