The NHS needs to talk about productivity

The debate about productivity in the NHS is a strange one. We are rightly proud of the sector’s efficiency in comparison to others and certainly we have done more for less in recent years. What is less clear is how the NHS has contributed to addressing the dire national productivity challenge our economy is facing.

Mind the productivity gap

Although we have record levels of employment, UK productivity levels are roughly what they were after the 2008 financial crash. Our low productivity is amongst the worst in the Organisation for Economic Cooperation and Development, and shows no sign of abating.

As a nation, if the pre-2008 trend had been maintained, output per hour across the economy would be over 20 per cent higher by now. This is a significant gap. This isn’t simply a national issue. While London and the wider south east continues to grow, the rest of the UK lags behind.

Many parts of the midlands and the north of England, for example, are now amongst the poorest in Europe, with this low productivity manifesting itself in poor infrastructure, health and educational standards, as well as other indicators of social cohesion, such as increased child poverty, reducing life expectancy and rising crime rates.

For those of us planning health and care service provision this is clearly our problem. We also have a part to play in addressing it.

Population health is inclusive growth

Receiving funding and direction nationally is no excuse for the apparent disconnect that often exists between the NHS and the local economy. This is particularly the case when our respective agendas overlap so clearly.

There is growing evidence about the cost of poor health at work to the economy, and the regional chasm was reflected in a report by the Northern Health Science Alliance in 2018, estimating that 30 per cent of the gap in productivity between the Northern Powerhouse and the rest of England was due directly to ill-health.

Some of the emerging place-based developments get this, such as the Wigan Deal, which takes a system-wide, asset-based approach to aligning public service transformation with developing a thriving and inclusive economy.

We are hopefully approaching a time where it is deemed incomprehensible that population health plans could be developed that do not have as their starting point local economic performance.

The most important health policy you have never heard of

The government’s latest attempt to tackle this productivity puzzle has been the Industrial Strategy. Local economic leaders have been encouraged to get on and develop their own Local Industrial Strategies, which means that in every part of England, Combined Authorities and/or Local Enterprise Partnerships are currently in the process of developing a long-term strategy to increase local productivity and turn around their own economy.

These strategies will focus on the priorities for investment across a range of important areas that matter for the NHS; including skills, infrastructure, innovation and economic and inclusive growth. Integrated Care System plans may still be in development, but it is surely time to fully connect our sector to these industrial strategies and the local economy. Let’s take skills, for example, one of the most important factors driving differences in local economic performance.

Your Local Industrial Strategy will in effect shape the nature and focus of your local (and highly competitive) labour market for the foreseeable future, bringing together local education and training providers, politicians and employers to map out pathways that support career progression in the agreed local key growth sectors. I don’t think it’s too much of a stretch to say that these strategies are just as important as the NHS People Plan is for our sector’s future workforce.

Health does matter

The good news is that I have yet to meet either an LEP or a CA that does not value the value of the NHS. They may have trouble knowing who to speak to, or how exactly to unlock our impact on local economic performance, but they are keen to try. LIS are at differing stages in their development, but as the new NHS Confederation briefing makes clear, health is a common feature within them all.

Every ICS in England should be seeking to engage in the development and implementation of their local strategy, influencing decision-making, securing resources for our sector, and understanding better the clear links that exist between the health of our citizens, and their long-term wealth.

The very purpose of our economy is to increase prosperity and wellbeing, but stagnant productivity and weak growth makes our job that much harder. To ignore the success or failure of our own local economy as we renew our health and care planning is to ignore the needs and interests of today’s society and that of future generations. It’s time we proved our worth.