Increasing productivity in the NHS

It’s a standard assumption within British politics that the NHS budget must rise in real terms each year. Polly Toynbee is fond of pointing out that it needs 4% more each year - something that means that in some distant future the entire economy of the UK is only and just the NHS.

There’s a certain truth to this from the Baumol Effect. Services do become more expensive relative to manufactures as incomes and productivity in general rise - because increasing productivity in services is more difficult than in manufactures. But it is not impossible to increase services productivity, just more difficult.

So, we desire a system that increases that NHS productivity to offset that Baumol Effect. The method is to mechanise what were previously services. An example is that aspirin replaces the comely maiden gently cooling fevered brows. Another:

It takes around five or six people and a considerable amount of effort to turn an intubated patient in a hospital bed. For patients in an artificial coma, this procedure is performed at least twice a day in order to improve patients' breathing and prevent bedsores. And now that intensive care units are filling up as a result of the pandemic, the problem is getting worse. A team comprising scientific assistants and a student, headed by Prof. Charles Baur at EPFL's Instant-Lab in Neuchâtel, have developed a simple system that allows just three people to turn a patient with little effort. It was tested by doctors and nurses at the La Source Clinic simulated hospital in Lausanne and the Geneva University Hospital (HUG) intensive care unit, and everyone involved was enthusiastic about the new device. It has been patented and is now ready for large-scale production.

Effectively - and too simplistically - a set of clips that allow the use of the sheets and the already extant patient lift to do the turning rather than the heft and grunt of humans. We have just automated, mechanised, a previously purely human labour task. We’ve improved the productivity of the use of labour that is.

Our desire is that we have more of this sort of thing. At which point we’ve got to note what sort of system increases the amount of this sort of thing. Centrally planned economies don;t do it well - it’s a standard observation that the Soviet Union managed no increase in total factor productivity in its entire 70 year lifespan. It’s also a standard observation that markets and competition increase the amount of such productivity increases.

No, we cannot plan our way out of this as this example shows. This wasn’t the result of some central decision by a beneficient state or management. It was a bottom up observation and experimentation from the shop floor.

Thus the introduction of markets and competition into the NHS even as government remains the financier. So that we have that system that increases productivity over time.