NHS productivity gain is just the latest evidence that socialised medicine brings down costs

International evidence suggests that the NHS is efficent by global standards and this morning's news that the NHS made productivity gains over the last decade just confirms that


The health bill is in even more trouble this morning, as one of the central rationales behind the legislation appeared to crumble.

The government has always argued that the extension of an ‘external market’ to the NHS – patient choice – is required to tackle falling productivity in the NHS.

However, as the BBC reports:

Official figures do not reflect the real improvements made in the NHS in England, according to a paper in the Lancet medical journal. It says a myth has grown up that the health service became less productive as funding increased…

“The paper argues that politicians have reached a flawed consensus that NHS productivity fell in the decade after 2000…

“Prof Nick Black from the department of public Health and policy at the London School of Hygiene and Tropical Medicine in London, who wrote the article, argues that it “probably improved”.

“He says assumptions that hospital productivity fell by 1.4 per cent a year, and overall NHS productivity fell by 0.4 per cent a year, are based on analyses by the Office for National Statistics. He says these did not reflect this increase in community-based services, and so may have underestimated the amount of work carried out by the health service….

“‘[However], a review of a much wider range of data than was previously available suggests substantial improvements in the quality of health care’, he argues…

“He cites as evidence falling mortality rates, greater compliance with clinical guidelines, and improving public satisfaction.

“Prof Black acknowledges “some uncertainty” surrounding these data, but he concludes that even a modest improvement in the overall figure, of 0.5 per cent a year, would mean that productivity rose over the decade rather than fell.”

This would tie into international evidence that socialised medicine brings down healthcare costs for the economy as a whole. As Left Foot Forward reported in May 2011:

“There is evidence to suggest that choice and competition in healthcare will, in fact, increase the UK’s spending on health. Take this chart from Kaiser Permanente, who provide healthcare in the United States, on health spends in developed countries:

“In fact, the United Kingdom, with its comparitively statist system, keeps costs down. Why might this be? It may be that in systems based on competition and choice, the lack of expertise on behalf of consumers means that providers can overcharge or charge for treatments which, in all honesty, probably do not have that much chance of working.

“That the government are proposing a two-step choice – consumers choose thier GPs, who in turn help choose the treatment – may help with this; but then again, the consumer will always be at some information disadvantage.

“How an information disadvantage can work in practice can be seen in the energy market, where the regulator OfGem has criticised providers for offering bamboozling products that means time-pressed consumers can’t make an informed choice, therby pushing up prices.”

When evidence confirms theory, it’s time that  the Westminster conventional wisdom on the ‘inefficient NHS’ caught up.

See also:

• ConHome: Neuter the health bill – Daniel Elton, February 9th 2011

• The Financial Times comes out against the NHS bill – Alex Hern, February 9th 2012

• Ten reasons peers should vote against Lansley’s anti-NHS bill – Shamik Das, October 12th 2011

• Miliband goes on attack as fight to save the NHS stepped up – Shamik Das, February 6th 2012

• Sign my petition to drop Lansley’s monster – Dr Kailash Chand OBE, November 24th 2011

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