Health and efficiency.

By any standards the National Health Service offers investors a superb return on their money. An annual investment of about £370 each yields access to primary health care and treatment in some of the world's most advanced hospitals. Nowhere else offers such a good deal. Yet a rumour has been circulating (for about as long as a reduction in public spending has been in vogue) that the system is grossly inefficient: millions of pounds are supposedly being squandered each year. But are millions being squandered? How can we measure efficiency? And what responsibility do doctors have for public spending? These were some of the questions faced recently at a conference at the Royal College of Physicians. The main conclusion was that we cannot yet relate expenditure to patient care. To commercial managers unaware of the complexity of the NHS and its "products" this may seem extraordinary. It was what commercial manager, Sir Roy Griffiths, regarded as an astonishing lack of management in the NHS that prompted his recommendation that general managers be appointed to every level of the NHS. Although his inquiry in 1983-was not much concerned with cutting costs, he suggested that more effective management would lead to cost improvement. Three and half years later the transition from an administered to a managed NHS, the Griffiths perestroika (restructuring), is now complete, and 800 general managers are in post. The message from the college meeting was that they are still far from their goal ofefficient budgeting because they lack a way of measuring efficiency within the health service. Performance indicators and data collected according to the Korner recommendations can be used to assess costs of treatment, but so far no way has been found to link these costs with "patient activity data" (managerspeak for a range of variables including outcome, technical adequacy, and consumer satisfaction). The NHS Management Board is conducting pilot studies on management in five districts, and a detailed case study of one of them was presented at the conference. Lewisham and North Southwark Health Authority through the formula of the Resource Allocation Working Party is due to shed £9m of its £120m budget by 1993. The authority has appointed managers from among doctors, nurses, and administrators: people are now clear about who is in charge, communication is better, and ancient animosities have lessened. As a strategy for "managed decline" it seems preferable to the administrator bashing that …