NHS productivity has taken a significant hit, costing the economy £20 billion annually, with Labour's healthcare reforms progressing slowly. According to a report from the Health Foundation, inefficiencies since the pandemic have erased a decade's worth of productivity gains.
While spending and staffing levels have increased, this hasn’t translated into more treatments or operations, with many hospitals still relying on outdated practices.
The report revealed that if pre-pandemic trends had continued, NHS productivity in 2022-23 would have been 14% higher, potentially freeing up enough resources for millions more outpatient appointments or tens of thousands of additional major surgeries.
The Office for National Statistics reported that NHS productivity in 2024 is 7.8% below 2019 levels, with a 1.5% decline in the second quarter compared to the same period last year. However, NHS England data for acute hospitals showed a 2.4% increase in productivity from April to July.
Health Secretary Wes Streeting has promised radical reforms, but these are delayed due to budget disputes. In March, Streeting announced the abolition of NHS England, resulting in 9,000 job cuts, but no redundancy payments have been allocated, leaving tens of thousands of staff in limbo. Other challenges include outdated equipment, underfunded hospitals, and rising staff costs due to strikes, which have not led to improved care. While some hospitals have adopted technology to boost efficiency, significant disparities between NHS trusts are still costing billions.
Flawed design and underinvestment drive NHS strain
Speaking to Asian Voice, Dr Joydeep Grover, Vice President of BAPIO (British Association of Physicians of Indian Origin), stated, “Efficiency is a product of being able to deliver the requirements effectively and with the least duplication, while maintaining high standards. The loss of productivity is driven not by personnel, but by a flawed system."
Dr Grover highlighted several factors behind NHS productivity loss: growing demand from an increasing and ageing population, and higher public expectations for immediate, risk-free care. He said, “Fear of litigation has led to more investigations, longer hospital stays, and overcrowded urgent care, while the widespread use of electronic systems, though improving safety, adds time to each patient interaction, reducing efficiency. The NHS also struggles with insufficient infrastructure, Germany has 8 treatment beds per 1,000 people, compared to just 2 in the UK, putting immense pressure on an already overstretched system. Additionally, unresolved staff strikes have worsened waiting lists and added significant costs to society.”
Dr Grover concluded, "Overall, there are complex reasons leading to loss of productivity, but almost all of these lie at the design level and a lack of investment in the NHS."
Professor Mala Rao CBE, Director of the Ethnicity and Health Unit at Imperial College London, emphasised that claims of low NHS productivity due to waste and inefficiency overlook the complex context in which staff work. She said, “NHS productivity is too low and waste and inefficiency are to blame for this, fail to provide the full picture and the complex context in which staff are delivering healthcare. The NHS Health Economics Unit acknowledges that the UK is one of the most unequal countries in the developed world both in terms of income and health, with deepening poverty and a growing and ageing population living with multiple long-term conditions resulting in unprecedented challenges for healthcare. Low rates of increase in NHS funding and a lamentable underinvestment in healthcare infrastructure – one NHS Confederation report highlights clinical service impacts of 12,000 estate failures during 2022 to 2024 – add significantly to the barriers faced by staff in delivering care. Furthermore, the workforce plan is in disarray. The medical headcount, for example, may be increasing, but England still has fewer doctors per capita than comparable EU countries and the increase lags behind rising health care needs. The overall numbers also mask the fact that the rise in medical workforce numbers has been concentrated in secondary care whilst general practice has seen a decline during the past decade. The UK has failed to train enough doctors domestically, with the workforce growth driven mainly by international recruitment. At the same time, the NHS struggles to retain its existing staff, with substantial numbers choosing to leave early citing work life balance, health, rewards and not being valued as reasons for their decision. This leaves those senior staff still working in the NHS facing the dual responsibility of delivering a greater burden of care with fewer pairs of experienced ‘hands’ and the training of junior, and in particular, international recruits. The levels of overburden, burnout and exhaustion in the workforce needs to be addressed as a key means to improving productivity. “
She added, “One option which is consistently overlooked is to invite the international medical (and other) graduates, who now make up around 50 percent of the workforce, to share their knowledge of innovations which could enhance productivity. In 2013, I highlighted in a paper in the BMJ that, for example, unfettered by the constraints of established and outdated ways of working, doctors in India have, as long ago as in the 1970s, applied the principles of industrial engineering to healthcare solutions which combine high service volume and quality at low cost, and deliver rapid access to health care interventions in an era of resource constraints. I said then, how disappointing it is that learning is assumed to be unidirectional, with the NHS imparting knowledge to the developing world and making little effort to explore the innovation which could be learnt by the NHS for its benefit. And lastly, are all technological advances in healthcare good for productivity? How many of these serve commercial interests at the cost of productivity and cost? This is a debate which deserves to be had."
