Sunday, 24 June 2012

The true meaning of efficiency



The £20 billion efficiency saving that the NHS is being asked to make by 2015 is going to be extended, so that we have to save £50 billion by 2019-20. If you don't believe me, check out this article by John Appleby, Chief Economist of the Kings Fund, doi: 10.1136/bmj.e2416, where he not only highlights the scope of the challenge, but also highlights how fanciful it all is.

One of the issues here is about disconnect. I find it difficult to actually imagine what a £1 billion is. In days gone by, in the UK at least, billions were very rarely dealt with because a billion was a million million (I think they used to say a million millions too, but this seems to have fallen out of fashion, which is why Gordon Brown kept doing it at all his budget speeches, no doubt). This meant that conversations about very large amounts of money were still carried out in millions. However, by going over to the American definition of a billion, we have managed to condense a thousand million into less space. I am sure that in many people's minds, a thousand million feels like a lot more money that one billion.

This perhaps is a useful way to consider the NHS productivity challenge. Does the challenge of saving £20,000 million by 2015 sound plausible to you? How does the prospect of doing this for the next 8 years, to save £50,000 million by 2020? It sounds exhausting.

And that's just first impressions. Delving further only deepens the scale of the task. 'Efficiency saving' is something of a throw-away term. We won't be handing back any cash to the treasury - instead we will be providing the health service we have always provided for a population of people for whom it is more expensive to provide health care for (because of rising age, rising expectations and rising technological costs) but with a health budget that will remain flat. Thus one way to manage the Nicholson Challenge might be to cap health provision at its current level, and pull some clever tricks that keep demand at the level it is today. It would be a work of fiction to imagine how one could achieve that.

Thus, by extending the efficiency challenge to the end of the foreseeable future, we are being told that we should expect health funding to remain flat, and that the challenge of the health service is to meet the needs of the patients with no more money.

Therefore, the actual number is meaningless: I don't think it is possible to have a good grasp, at a service provision level, of what £50 billion is. What £50 billion means to you and me is that there will be no extra funding for 8 years.

I think this underpins one of the problems surrounding the discussion of efficiency savings: for those of us who go to work every day to spend the money that the health service has, these numbers have been thrown around, but it has been very hard to make any real connection between the numbers, and what they mean for the job we actually do.

In particular, it becomes very difficult to see how one can become more efficient, when one is working as hard as possible. It may seem that so far efficiency has been approached mainly through reducing staff numbers. To some extent this is inevitable, given that staff costs account for two thirds of the health service costs. But one wonders how the same level of service can be supplied, if those staff cuts are not supported by systems and changes that support each individual to deliver, or to support the delivery of, more patient care.

The challenge of creating a more efficient health service that delivers the same amount of health utility for less money would seem to me to be a challenge of creativity and ingenuity. Too often it seems like the challenge of deciding which staff you can do without, or the challenge of how much extra work you can persuade staff to take on for no extra money.

That might work for a couple of years, but I am certain it won't see us through to 2020.

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