Written question asked by Lord Mawhinney (Conservative), in the House of Lords. It was answered by Earl Howe (Conservative) on Monday, 4 July 2011.

NHS: Productivity

Question: To ask Her Majesty’s Government, further to the Written Answer by Earl Howe on 24 March (WA 203), why output activities are weighted by their average costs in the National Health Service productivity calculations; and how such calculations of output are made.

Answer: National Health Service productivity growth is measured as the ratio of growth in the volume of outputs to growth in the volume of inputs. NHS output includes the sum of all patient treatments carried out each year. Cost weighting patient treatments enables a single output value to be constructed from all healthcare activities carried out each year. Healthcare activities are varied, weighting makes different activities comparable in terms of their value so for example a procedure that costs five times more than another receives five times more weight in the measure. The cost weight for each type of activity is the relative cost of that activity compared to all others. The Office for National Statistics calculates average costs for each Healthcare Resource Group from cost information recorded in the annual reference costs collection by the department. Multiplying the quantity of each activity type by its cost weight and summing these values generates the cost-weighted output value. The measurement of growth requires comparable data over time periods. To ensure the volume of outputs is comparable over time, the same cost weights are applied to data for year 1 and year 2 such that the effects of price increases are stripped out.

Secondary information

Type: Written question
Reference: 10277; 729 c19WA
Session: 2010-12
Related items: NHS: Productivity
Thursday, 24 March 2011
Written questions
House of Lords
Subjects: Costs NHS Statistics Productivity
Link: View this Written question on www.publications.parliament.uk