National productivity estimates

Project lead: Adriana Castelli


Concerns about meeting ever more stringent efficiency requirements and constraints have been at the forefront of the debate regarding the NHS over the last seven years. Both the Five Year Forward View (FYFV) (2014) and the Next Steps on the NHS Five Year Forward View (NSFYFV) (2017) have proposed ways of addressing the so-called Funding and Efficiency gap that rely on measuring the performance of the NHS. Hence, demonstrating continued improvement in productivity is central to the sustainability of the NHS.

This project will enhance and continue the measurement of productivity of the NHS following the methods and analysis developed of the last 13 years in the Centre of Health Economics. It will deliver findings that are vital for assessing the extent to which the efficiency saving and productivity enhancing measures put in place by Hospital Trusts (both Foundation and non-Foundation Trusts) as well as by other key actors in the English NHS, such as GPs and NHS England, are translated into productivity growth.


Efficiency frontier for locally priced services

Project lead: Martin Chalkley


There is substantial variation in the prices paid for, and in some cases in the unit costs to deliver, specialised services where national tariff prices do not apply. Going forward, contracts with local prices will require a provider-specific agreed plan for service reform of those services which are above the most efficient levels of cost. This requires evidence to establish what those efficient levels of cost are, and in particular, how costs vary with quality of services. Costs are deemed too high is they exceed the minimum achievable level for a given set of quality measures achieved.

This research establishes the statistical and econometric methods for identifying providers whose costs and quality measures are abnormal (statistically significantly either high or low) for three domains of service - adult critical care, renal transplantation and secure mental health services. The research therefore provides the means for purchasers and providers to agree which elements of service need to be improved or where costs need to be better contained. The research provides proof of concept for these methods and can be extended in the future to cover more locally priced services, or a greater range of quality measures for those services.


Feasibility study of the consequences of unmet need in social care

Project lead: Jose-Luis Fernandez


There is little quantitative evidence which enables us to interpret the nature of recent changes in social care levels of provision, and the extent to which they indicate the success of local strategies for promoting independence amongst the older population and thus reducing the need for ongoing social care support, or whether they highlight “retrenchment” of state funded social care. There is even less evidence about the consequences of those changes on the quality of life of people with social care needs and their carers, and their wider impact on other parts of the welfare system such as the NHS and the benefit system.

The aim of this scoping study was to consider how to design a possible “main study” that would evaluate the consequences on outcomes for older people with social care needs, their carers and the wider care system of recent changes in the support offered by councils, focusing on older people at the edges of current eligibility criteria (referred to in the report as older people with low/moderate needs). The study concluded that primary data collection would be required, and suggested possible methodologies for the selection of typologies of care models to be studied, the selection of cases (and numbers required) in the study, the indicators to be collected, and highlighted important issues related to the governance and implementation of a hypothetical “main” research project. The study stressed the importance of carrying out a pilot study to test key study steps given its significant complexity.


Projections of demand to 2070 for adult social care and associated expenditure

Project lead: Raphael Wittenberg


The Department of Health and Social Care requested projections of demand for long-term care for older people and younger adults in England to 2040 and beyond and associated future expenditure. The projections were produced using updated versions of the Personal Social Services Research Unit’s (PSSRU) aggregate long-term care projections models and the CARESIM microsimulation model developed by Ruth Hancock at the University of East Anglia. The projections cover publicly funded social care for older people and younger adults and, for older people only, privately funded social care. The key findings of the study are:

Public expenditure on social services for older people is projected to rise under the current funding system from around £7.2 billion (0.45% of GDP) in 2015 to £18.7 billion (0.75% of GDP) in 2040 at constant 2015 prices and under a set of base case assumptions about trends in the drivers of long-term care demand and in the unit costs of care services;

Public expenditure on social services for younger adults is projected to rise under the current funding system from around £8.9 billion (0.55% of GDP) in 2015 to £21.2 billion (0.85% of GDP) in 2040 at constant 2015 prices and under a set of base case assumptions about trends in the drivers of long-term care demand and in the unit costs of care services;

These base case projections are sensitive to assumptions about future trends in mortality and disability rates and in the real unit costs of care.