The Week

The Week 8 March 2024

Rosie Beacon
Research Manager and Head of Health

This week we saw potentially the last fiscal event before the General Election. The NHS got a fair amount of attention, with a big focus on one theme in particular: productivity. It is clear from the Chancellor’s announcements that technological modernisation is being viewed as a crucial ingredient for a higher-performing health system. We agree — but it won’t be enough by itself.

NHS productivity has been making headlines over the last year, as it has become abundantly clear that even with increasing frontline staff numbers, system outcomes are only marginally improving. Resource has not decreased, referrals for treatment have not dramatically increased, all the while spending has increased. And yet healthcare is as hard to access as ever.

The Institute for Government and the Institute for Fiscal Studies have, like us at Reform, written at length about this productivity puzzle. It’s now increasingly accepted that addressing this will be as much about fixing the underlying operating model – estates, management, technology – as it is about ‘input’.

Discussions about productivity can sound quite dehumanising and divorced from outcomes on the ground for practitioners, as the Health Secretary alluded to in her speech yesterday: ‘NHS Staff and clinicians don’t get out of bed in the morning thinking about how they could be more productive … They are motivated by doing the very best they possibly can for patients.’

Ultimately, poor productivity means less is being done than is possible. It means hospital discharges are delayed, which affects bed occupancy, which then leads to over capacity hospitals and patients waiting in a bed in the corridor for hours. It can also mean GPs are less likely to refer patients given hospital capacity concerns, possibly enabling treatable conditions to deteriorate. And — you guessed it — backlogs get longer. Access to healthcare, in every way, is undermined.

The Spring Budget majored in particular on the potential for technology-induced productivity. With £1 billion to enhance data utilisation, £2 billion for outdated IT systems and £430 million on the NHS App, these are not small investments.

These moves will be greeted with a degree of scepticism. Over the years there have been several announcements of investment in NHS technology, only for these budgets to be raided to meet acute operational pressures.

Technological modernisation is also unlikely to lead straightforwardly to efficiency gains if it is not complemented by other capital investment to address other sources of the productivity challenge. Maintenance problems on existing estates, physical bed capacity, and insufficient management capacity remain enormous obstacles to progress. While modernising outdated IT is necessary, it is one constituent part of a more multidimensional problem.

Key to our work at Reform is the idea that the post war public service settlement is no longer fit for purpose. The NHS productivity crisis is further testament to the idea that more profound trends undermine our current model of healthcare. The answers to this complicated context cannot be answered simply with a technological silver bullet: a fundamental reimagining is needed.

What we’ve been reading…

As the Spring Budget and International Women’s Day converge, it’s worth reflecting on the idea of ‘gender blind’ policymaking. Macroeconomic policy is often thought to be ‘gender neutral’ but economic policies affect men and women differently due to their different positions and roles in the economy. This means that women tend to have less resilience to financial crises than men, and they often earn less and save less because they have less time to participate in the paid labour market (because they are much more likely to take on unpaid care roles than men.) In light of this, even those who might feel instinctively sceptical of feminism may find the Women’s Budget Group’s methodical analysis of taxation and gender to be thought provoking.