“You Don’t Always Get What You Want”: Output Distortion and NHS Waiting Time Targets

The latest publication from Professor Graham Cookson in Public Organization Review finds that waiting time targets adopted in the English NHS as part of the ‘targets and terror’ performance management regime did indeed reduce key waiting time measures, but at the expense of other quality metrics such as hospital readmission rates i.e. the policy was output distorting.

In the immortal words of The Rolling Stones, “You don’t always get what you want.” And the latest publication from OHE’s incoming Director, Professor Graham Cookson, demonstrates that in terms of the waiting times targets used in English secondary care this is apparently true in health as well as in love.

The paper, published in Public Organization Review, finds that the waiting time targets that form a part of the infamous ‘targets and terror’ regime suffer from what economists call ‘output distortion’ – reducing waiting times was achieved at the expense of other aspects of care quality. In a political sense at least then, The Rolling Stones were correct “If you try sometimes you find you get what you need.”

Waiting times have long been a concern in the English NHS where healthcare, free at the point of use, is rationed by waiting time. They have been regular fodder for the media and politicians. In response to persistently high waiting times, the English Labour government introduced the use of an aggressive policy of targets coupled with the publication of waiting times data at hospital level (the star-rating) and strong sanctions for poor performing hospital managers. This regime was dubbed ‘targets and terror’.

The policy involved a ratcheting effect. The maximum waiting time for hospital elective care was reduced from 18 months in 2000 to 15 months in 2002, 12 months in 2003, 9 months in 2004 and 6 months in 2005, and finally fell to 18 weeks in 2008. Patients of cancer and cardiovascular diseases should not wait more than two weeks to receive appropriate treatment.

Carol Propper and co-authors have previously demonstrated that the policy worked to lower waiting times through a difference-in-difference approach comparing England (treatment) and Scotland (control) when the policy was first introduced. Generally, clear, measurable targets with hard incentives are expected to work. But their use raises two important concerns: do providers game the system and do they create output distortion effects. The first concern has been well studied, and Hood provides a succinct overview of the problem. The second concern is addressed in this latest paper by OHE’s Graham Cookson.

In essence, the problem is that healthcare organisations have multiple objectives and even within a single objective (e.g. delivering high-quality care) there are multiple dimensions to be considered. However, as Drucker (1974) stated, “what gets measured gets managed.” A major concern then is whether focusing attention, and therefore effort, on meeting targets comes at the cost of poorer performance in other areas which are not measured. This is what economists call output distortion.

The study empirically tests the output distortion theory using data for 161 secondary care trusts in England. The results show a relationship between lower average waiting times and higher readmission rates, a key measure of healthcare quality. As most hospitals are at or are close to full capacity, to reduce or maintain waiting times hospitals must process patients quickly, perhaps discharging some too early which results in higher readmissions rates within 28 days. There is evidence to support the theory of output distortion.

However, shorter waiting times are associated with higher patient-reported health gains. There is an intuitive explanation. Hospitals could meet the waiting time targets by improving their general performance, especially their efficiency e.g. moving to day patient surgery. Other hospitals could meet the waiting time targets by freeing up beds by discharging patients too early. 

It is clear that if the ultimate aim of the policy is to reduce waiting times by improving the efficiency of hospitals, then a waiting time target by itself does not guarantee this. Policymakers must, therefore, be mindful of potentially perverse outcomes such as output distortion when setting targets in the public sector. However, if policymakers and politicians only care about reducing waiting times then The Rolling Stones were correct “If you try sometimes you find you get what you need.”

Citation

Elkomy, S. and Cookson, G., 2018. Performance Management Strategy: Waiting Time in the English National Health Services. Public Organisation Review. DOI.

Related research

Siciliani, L., 2016. Waiting Time Policies in the Health Sector. OHE Seminar Briefing. RePEc.