Productivity – how much output is created from a given volume of inputs – is one of economic’s most important metrics.
Productivity captures everything about economic development and economic ordinance. Technological change, process change, labour skills improvement and capital improvement are all get captured in a productivity metric.
Countries rise and fall by their productivity performance.
So what do we think productivity in the health sector currently looks like…?
ON THE INPUTS SIDE…
In the last five years the government had added 5500 doctors and nurses to the public health system, made record investment in this year’s Budget, and changed the health system, Little has said.
https://www.rnz.co.nz/news/national/471114/we-see-the-data-we-see-the-challenges-little-defends-health-system
“We are spending more on our public health system than we have ever spent before. We have employed more additional people into our public health system than we have ever employed before.
…AND ON THE OUTPUTS SIDE?
Health Minister Andrew Little admits waiting times at the Emergency Department are getting longer but says health entities are doing all they can to make improvements.
IF I WAS TO DRAW A TRENDLINE
Inputs going massively up – more workers / more capital. Outputs at best “steady”, and that’s probably being kind. If I was a betting man, productivity is probably falling.
That means more money going in for less services coming out, more New Zealanders waiting for care, and getting sicker in the process.
I hope the restructured Ministry of Health rebuilds it’s health sector productivity metrics – I haven’t seen them published for as few years now.
BUT THE REFORMS ARE ONLY 3 WEEKS OLD
That’s the only pass card the government gets. The reforms are massively disruptive. But if the sector quickly moves to a clearly described and well understood end point, then the productivity decline will only be temporary.
I really hope the sector has a well understood and described end point that is transitioning into in the absolute shortest time.
… but I suspect it doesn’t…
The good news is the more inefficient the sector becomes, the easier it becomes to identify area ripe for productivity improvements.
Time will tell, and this government has just over a year to generate some productivity improvements. Inefficiencies will become very visible in an election year.