IMPACT OF THE NHS REFORMS ON ENGLISH HOSPITAL PRODUCTIVITY - AN ANALYSIS OF THE FIRST 3 YEARS

Objectives: To evaluate the effect of purchaser mix, market competitio n, and trust status on hospital productivity within the NHS internal m arket. Methods: Hospital cost and activity data were taken from routin ely collected data for acute NHS hospitals in England for 1991-2 to 19 93-4. Cross sectional and longitudinal regression methods were used to estimate the effect of trust status, competition, and purchaser mix o n average hospital costs per inpatient, after adjusting for outpatient activity levels, casemix, teaching activity, regional salary variatio n, hospital size, scale of activity and scope of cases treated. Result s: Real productivity gains were apparent across the study period for N HS hospitals on average. Casemix adjustment drastically improved cross sectional comparisons between hospitals. Gaining trust status and inc reasing host district purchaser share were associated with productivit y increases after adjustment for casemix, regional salar differences, and hospital size and scope. Hospitals that became trusts during the s tudy period were on average less productive at the beginning of the pe riod than those that did not, and there were no significant productivi ty differences between trust waves at the end of the period in 1993-4. Market concentration was not associated with productivity differences . Conclusion: Further analysis is needed to deter-mine whether overall and trust associated productivity gains are transient effects, one of f shifts, or self perpetuating reorientations of organisational behavi our. Hospitals may have chosen to become trusts because they anticipat ed being able to increase productivity. Increases in the proportions o f small purchasers were associated with increasing costs. Importantly, this study could not adjust for changes in the quality of care.