Hospital trusts productivity in the English NHS: uncovering possible drivers of productivity variations

In 2009, the NHS Chief Executive warned that a potential funding gap of £20 billion should be met by extensive efficiency savings by March 2015. Our study investigates possible drivers of differential Trust performance (productivity) for the years 2010/11-2012/13. Productivity is measured as Outputs/Inputs. We extend previous productivity work at Trust level by including a fuller range of care settings, including Inpatient, A&E and Community Care, in our output measure. Inputs include staff, equipment, and capital resources. We analyse variation in Total Factor and Labour Productivity with ordinary least squares regressions. Explanatory variables include efficiency in resource use measures, Trust and patient characteristics. We find productivity varies substantially across Trusts but is consistent across time. Larger Trusts are associated with lower productivity. Patient age groups treated is also found to be important. Foundation Trust status is associated with lower Total Factor Productivity, while treating more patients in their last year of life is surprisingly associated with higher Labour Productivity. Variation in productivity is persistent across years, and not fully explained by case-mix adjustment. A lack of convergence in productivity may indicate outstanding scope to improve Trust productivity based on mimicking the practises of the most productive providers.