Estimating the health benefits of reducing technical inefficiency in the NHS: a scoping study
Theme 5: Empirical work on the marginal productivity of public expenditure in health and care
Recent findings suggest some tension between measures of the marginal productivity and the technical efficiency of the NHS. While marginal productivity appears to increase over time (Martin et al., 2023), technical efficiency has been reported to fall in recent years (Arabadzhyan et al., 2022). With very little knowledge about the links between marginal productivity and technical efficiency, it may be difficult to assess, for example, whether there is a trade-off in the different policy decisions informed by these existing measures. It is therefore important to investigate their relationship and, in doing so, estimate the potential health benefit of reducing inefficiencies.
To our knowledge no empirical study has attempted to combine measures of technical efficiency with estimates of marginal productivity and the causal effect on health outcomes. Therefore, the scoping of both methods and the range of possible data sources is required to establish the feasibility of conducting this research and to develop a detailed project template for possible empirical work.
Aims
This project aims to provide a better understanding of the relationship between marginal productivity and technical efficiency, and the health benefits of reducing inefficiencies. During this initial scoping stage, the project will consist of a critical review of empirical methods and measures of technical inefficiency, which currently inform policy. This will inform proposed empirical strategies which can combine estimates of marginal productivity with measures of technical efficiency and, in doing so, estimate the potential health benefits of reducing technical inefficiency.
Project Team
Francesco Longo, Karl Claxton
Contact
Francesco Longo francesco.longo@york.ac.uk
Plain English Summary
Background:
There are two ways to think about the performance of the NHS. The first considers whether NHS output (number of procedures, patient treated or reduced waiting times) can be increased with existing resources and current levels of expenditure (improving technical efficiency). The second estimates the health benefits of relatively small increases in health care expenditure (marginal productivity). To date these measures of performance have been estimated separately, in different ways and have used different data sources.
Aims and objectives:
The aim is to understand how these measures are related and how they might be estimated together, which could, in principle, identify the scale of the potential health benefits of improving technical efficiency and the health benefits of increases in health expenditure at current or improved levels of efficiency.
Methods:
To date, no empirical study has attempted to address both these questions at the same time or establish how they are related. Therefore, a scoping study is required to identify suitable methods and sources of data that might allow feasible empirical work in this area. The scoping study will include a review of the most recent work on how technical efficiency can be measured and estimated, and which measures are currently informing health policy.
Policy relevance & dissemination:
Such estimates could better guide efforts to improve efficiency and better inform decisions about the level of expenditure. For example, it would identify whether the same improvement in health outcomes might be achieved by either improving efficiency or by increasing expenditure and how the effects of increases in expenditure might change as the technical efficiency of the NHS improves. A report and a project template, drawing on this scoping review, will propose feasible empirical strategies to identify the effect of technical efficiency on health outcomes and the marginal productivity of NHS expenditure, demonstrating the value of addressing both these aspects of NHS performance at the same time.