The productivity guessing game

I’ve been watching the Olympics. One of our finest was interviewed whilst waiting to hear if he was likely to progress to the finals as the ‘fastest loser’. He said he thought he should qualify "as a reward for all the hard-work he’d put in over the last four years".

Sorry son, productivity is the name of the game and in these games it means gold medals – that’s all.

Chancellor Gordon Brown has caught the Olympic idea. He wants gold standards for public sector productivity. Does he know what he means?

Output, efficiency, quality? What? More for less? Make the tax-payer-pound go further? I have news for him: Great Britain plc is not too efficient.

Since 1995, Europe has fallen behind the US on productivity measures. According to Eurostat, Europe has an hourly, output per worker about 20% below US levels. Why? Work-place job protection and barriers against competition are at the heart of the problem.

In the UK the problems are three-fold.

First, info-tech spend in the UK, a key to productivity in the workplace, is poor. OECD figures put US spend at 4.42% of GDP. In the UK it is 2.8%. Second, across Europe, R&D spend is about 2% and in the US it is 3%. 

Third there is the European disease; the ‘attitude thing’. For example, in the German banking sector, productivity is 13% lower than it is in the US. Restrictive practices and a highly unionised labour-force are the problem. In the UK, very slick companies like Tesco who do invest heavily in IT have problems with the planning authorities who won’t let them (and their customers) benefit from economies of scale, by restricting out of town developments.

So, that’s the private sector. What about the NHS – can we expect anything better?

The NHS is the last remaining nationalised industry of its size, anywhere in the world.  It is the product of a compromise and fudge, cobbled together to fulfil a political dream. The politicians of the day nationalised the existing infrastructure and did deals with front-line production staff that protected them and put a fault-line in the foundations that we still tip-toe around today.

How do you measure a service that is purchased and commissioned by the same people who supply the service? How do you calibrate the output of staff who are part-time and full-time and who work for the NHS one minute and the competition the next? How do you quantify the outcomes of a business that often has no outcome, multiple outcomes or who cannot regard the outcome of a dead customer as failure? How do you measure a service that is loved and hated by its customers, in almost equal measure, many of whom contribute nothing to its cost?

Shall we measure the sweat on the brow of a nurse, or the grey hairs on the head of a GP? What about the number of managers who take antacid pills after meals?

How is the success of an admission for a hip replacement to be considered, when the bed-stay is elongated by the discovery that the patient has unexpected diabetes? How do we take account of the fact that a patient gives up smoking and gains two stone in weight?

There is a saying; be careful what you wish for – you might just get it. In this case, be careful what you measure – you might just get that, too.

Most of the measures of NHS productivity are useless. They are crude, published too late to be of any use and open to fiddling.  There is almost no point in counting anything. The most accurate thing we can do is to count the number of customers and divide it into the amount of cash the NHS has; cost per-customer per-year.  Except that is no good because we’re not really sure how many customers, repeat customers and finished customers we have.  And, we don’t know how much money, revenue, capital, donations, sales proceeds or tins full of small change we get.

All we need to know is how much and how many. Simple enough. The new big idea, financial flows, that are supposed to tell us how much it costs to have a bunion removed, is turning into a subsidised, fudged and fiddled balance-pond. 

Until all supplies are managed by computer and there is electronic data interchange between the user and the supplier, when all staff are electronically counted on and off the premises, when all patients were bar-coded and their records updated automatically with every ounce of cotton-wool we use on them, and until we have a comprehensive information technology system that can tell us who does what, to whom and when and why and how – nothing is worth measuring.

Forget it Gordon. Put your feet up and count our medals!