Understanding and improving NHS productivity is essential to delivering high-quality care with finite resources. The Health Foundation commissioned Arden & GEM to conduct a comprehensive review to understand and appraise current productivity measurement approaches within the NHS.
Over a seven-month period, a team of health economics and improvement experts carried out a literature review, stakeholder engagement and thematic analysis to inform a technical report. The report provides a fresh lens on how productivity is measured in such a complex system, highlighting where current metrics fall short and where new approaches could drive meaningful change.
The challenge
Improving productivity in the NHS is key to meeting the challenges of increasing demand, constrained resources and post-pandemic recovery. The government has set a productivity improvement target of 2% per year but measuring productivity in a complex healthcare environment is difficult.
Meeting current and future healthcare needs requires ambitious efforts to improve productivity measurement at national, system and local levels, enabling organisations to confidently identify what works well and direct resources accordingly. This ambition prompted the Health Foundation – an independent charitable organisation working to build a healthier UK – to commission NHS Arden & GEM to examine how productivity in the NHS is currently assessed and how it should evolve.
Our approach
A Senior Health Economist and Senior Improvement Consultant from Arden & GEM led a team exploring two key productivity measurement questions:
- What are the strengths and weaknesses of current approaches to measuring productivity, what types of questions can those metrics be used to address, and how they might be improved?
- What are the priority areas for development in productivity measurement to fill the gaps identified in this research?
The team designed a methodology to build a clear picture of how NHS productivity is presently measured, the strengths and weaknesses of existing metrics and the opportunities for improvement. Three main activities were undertaken: a rapid literature review, stakeholder engagement and a structured analysis of findings.
Rapid literature review
The review aimed to identify measures and methods used to assess NHS productivity, understand why they are used and evaluate their operational practicality.
Searches were conducted using productivity-related terms across PubMed and Google Scholar to capture academic research, policy papers and grey literature from 2016 onwards. Key manuals from the ONS and OECD were also consulted for foundational context. Literature was screened to exclude items unrelated to productivity measurement in the NHS or those too specific to individual clinical conditions. Extracted data included method descriptions, use cases, strengths, limitations, datasets used and the potential of each method to generate useful insights.
Stakeholder engagement
To complement the literature findings, interviews were carried out with 18 stakeholders across three groups:
- technical experts in health economics and finance
- experts from non‑health sectors
- NHS users of productivity outputs such as commissioners, clinicians and policy teams.
The purpose was to understand experiences with current metrics, identify gaps, explore alternative approaches and assess the relevance of productivity methods used outside health. Two workshops were then held to validate emerging themes, involving representatives from across the stakeholder groups.
Thematic analysis
All literature and stakeholder data were coded under four themes: definitions of productivity, reasons for measurement, methods and analytical variations, and strengths and limitations. This analysis informed a categorisation of current measurement approaches and a gap analysis based on stakeholder priorities and evidence of unmet needs. These findings guided the structure of the technical report and highlighted areas for future development.
The outcomes
The final technical report highlights the breadth of reasons for measuring healthcare productivity and the varied approaches taken. It proposes a new classification framework to better align metrics with their intended use, whether for system-level planning, local service improvement, evaluating resource allocation or national financial accountability.
Key areas identified for development include:
- Aligning measures with future service needs, better reflecting long-term investment, patient outcomes and workforce resilience
- Integrating evaluative and macro-level methodologies to strengthen the link between local insights and national planning
- Investing in metrics for preventative care, recognising value beyond short-term costs
- Enhancing tools to measure productivity across evolving integrated care pathways, including interfaces with social care and independent providers.
The Health Foundation will build on these findings to inform future work aimed at improving long-term planning and resource use across health and social care systems.
"The government has placed significant emphasis on increasing NHS productivity – setting a stretching target for the health service to deliver 2% annual productivity growth. The way productivity is measured, and whether it captures what matters most, is therefore of crucial importance. This report is a vital resource to help us understand the different ways that productivity is measured and areas for improvement."
Katie Fozzard, Senior Economist at the Health Foundation
Find out more about the work of our Health and Care Transformation team.