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NHS: Productivity

Answer

National Health Service productivity growth is measured as the ratio of the growth in the volume of outputs to growth in the volume of inputs. No spend data are used in the calculation of volume of outputs in the NHS productivity measure. Spend data are used in the calculation of the volume of inputs where there is no data available to count inputs directly, (bandages and dressings for example). Spend data are adjusted for inflation (deflated) to enable a comparison of input volumes between two time periods, as required to calculate NHS productivity growth. The measure of the volume of inputs must only reflect quantity but spend data reflect both the quantity and price of inputs. So, deflating spend removes the effect of price increases. Different deflators are used for different inputs. There are three broad categories of healthcare inputs: labour, goods and services and capital consumption. Goods and services are measured in three parts: GP prescribed drugs, healthcare purchased from outside the NHS and other goods and services. Expenditure data are used to measure healthcare purchased from outside the NHS and other goods and services. All other inputs are directly measured. Spend on other goods and services in Hospital and Community Health Services (HCHS) is deflated using the Health Service Cost Index (HSCI). The HSCI is calculated monthly to measure the price change for 41 sub-indices of goods and services purchased by the HCHS. The sub-indices are weighted together according to the proportion of total expenditure which they represent. Spend on other goods and services in primary care is deflated using the retail Prices index as no specific deflator is available. Spend on healthcare purchased from outside the NHS is deflated using the HCHS pay and price index; no specific price deflators are available for healthcare purchased outside the NHS. The HCHS pay and price index is a weighted average of the HSCI (described above) and the pay cost index. The PCI is a weighted average of increases in staff unit costs for each staff group within the HCHS sector. The HSCI and PCI are weighted together to calculate the HSCI by their expenditure shares.

Secondary information

Type

Written question

Reference

10280; 728 c476-7WA

Session

2010-12

Related items

NHS: Productivity
Thursday, 24 March 2011
Written questions
House of Lords

Subjects

NHS Statistics Productivity

Link

View this Written question on www.publications.parliament.uk