Fresh research points to big increase in NHS productivity

The UK's dismal record of productivity in the National Health Service could be transformed into a massive improvement if government statisticians accept evidence from the Department of Health of a massive increase in the service's output, it emerged yesterday.

Figures based on traditional measures showed the decline in NHS productivity had worsened, falling by 1.3 per cent a year since 1999 rather than 1 per cent as first thought. But research showed growth could be as high as 1.6 per cent a year if assumptions based on an amalgam of research by independent analysts, a leading economist and the DoH were factored into the data.

Attempts by the Office for National Statistics to check these findings against specific health outcomes appeared to show productivity was stagnant at best. The ONS, which published the figures in a report yesterday, defended its decision to incorporate the DoH data, and said it was one step in a journey towards producing productivity data that began three years ago.

Last year Professor Sir Tony Atkinson of Oxford University recommended including an assumption that output grew by an additional 1.5 percentage points to reflect the value of health in a growing economy. He urged the ONS to measure better actual NHS outputs.

Yesterday the ONS published two pieces of research. One from the University of York and the National Institute of Economic and Social Research estimated that improvements in survival rates, wider health benefits and patients' experiences justified adding 0.17 percentage points to output. But this was dwarfed by a potential 1 percentage point increase that the DoH claimed was justified from an assessment of four areas of health cover.

Among the factors the DoH considered was the effect of cholesterol-lowering statins used to treat heart attacks and strokes. Statins cost £27 a month but produce health benefits worth £115, according to the DoH.

The Tories said the measures were designed to cover up the fact that NHS productivity was worse than previously thought.

Andrew Lansley, the shadow health secretary, said: "Trying to incorporate an argument that the NHS is becoming more productive because a person's health is increasingly valuable is useless for measuring productivity improvements, because it will show an improvement virtually every year."

The ONS said the DoH's research was very thorough. "This is not something that was thought up in the bath," said Joe Grice, an executive director of the ONS.