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Hospitals will struggle to hit productivity targets

NHS providers must deliver “the lion’s share of productivity improvements”

Ingrid Torjesen

Friday, 15 July 2011

Many NHS hospitals will struggle to deliver their productivity targets, essential to maintaining quality and avoiding significant cuts to services, according to a survey of NHS finance directors by the King’s Fund.

The majority of 29 finance directors from NHS providers questioned for the King’s Fund’s latest quarterly monitoring report on NHS performance, said that their trusts face productivity targets for 2011/12 of 6 per cent or more - well above the level required across the NHS as a whole to deliver the £20 billion in efficiency savings needed by 2015.

In total 27 said their trust has a productivity target of four per cent or more, with 13 of these having targets of 6 per cent or more - all of them from provider organisations.

Overall half the finance directors were uncertain of meeting their targets, including eight of the 13 with targets of 6 per cent or more.

However, only three finance directors expect their trust to be in deficit 26 of the 29 finance directors expect their trust to break even or be in surplus at the end of the year, with three expecting to be in deficit.

A quarter of the finance directors would not rule out that the productivity targets would not harm clinical quality and nearly half were pessimistic about the financial prospects for their local health economy.

The King’s Fund report suggested that providers are facing higher targets than commissioners, perhaps indicating that the government sees them as better placed to deliver the improvements needed, given the upheaval faced by commissioners as a result of the health reforms.

Professor John Appleby, chief economist at The King’s Fund said: “This quarter’s report suggests that the government is looking to NHS providers to deliver the lion’s share of productivity improvements, with many facing very tough cost improvement targets as a result. Based on the feedback we received, there must be significant doubt about whether many of these targets will be met.”

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