Ross Martin: Time for major surgery on Scotland's ailing NHS

How can this be when many say that the NHS is not actually devolved? The major items of expenditure are UK controlled or instigated – from doctors and nurses pay to drug costs, where the benefits of scale can apply to procurement. So how can our performance lag so far behind other parts of essentially the same service? All is not what it seems.

Of course, we have made some significant changes to the NHS in Scotland, for example halting the centralisation of hospital services, but why are there such high differences in output, when we clearly benefit from such a disproportionately high level of input – in other words, cash?

Why do we still suffer from such a poor health record in spite of the massive injection of both revenue and capital cash into the NHS in Scotland?

Let us start with structures. As is the case across the rest of the Scottish public sector, we have too many people in too many organisations producing too little in terms of outcomes. Fourteen separate "territorial" health authorities, with 14 separate boards and headquarters, with other specialist boards too.

We know the arguments and have seen them debated in local government since the creation of our 32 councils. There are other examples across the Scottish public sector with, for example our eight fire boards looking after a population smaller than that cared for by the London Fire Brigade.

In education, to take another example, Birmingham's schools budget is bigger than all Scottish schools spending, yet we apparently need 32 education authorities to their one.

In the Nuffield report, the mismatch of resource in health was reflected in a number of ways, including the fact that one nurse in Scotland looks after 70 out-patients, while in England that "productivity ratio" is double, at 140 patients per nurse. As we head into a period of budgetary restraint, this is clearly unsustainable.

But how could we allow it to happen in the first place?

The problem lies at the heart of the Scottish public-sector psyche. Our contentment to ever increase the supply of public services, regardless of whether that is in input or output terms, is matched only by our reluctance to manage the demand for them. This is true across the public sector, but nowhere is it more evident than in the health service.

Yes, we are beginning to make strides in terms of moving towards preventative care, with initiatives such as changing people's lifestyles through more exercise and opportunity for activity, but we still allow a seemingly unending procession from the doctor's surgery to the pharmacy.

Yes, there is a focus on outcomes with the benefits of major, groundbreaking initiatives on the public smoking ban, on chest, heart and stroke improvements all coming through.

And we are, of course, beginning to tackle the lack of democratic accountability that has bedevilled the health service all across the UK, with an initiative on directly elected health boards. Now there are a number of views on the potential effectiveness or efficiency of creating yet another layer of government, with a strong lobby for health and social care to come together under the local council roof, but at least this change is aimed at improving levels of public engagement and, with it, accountability for spending decisions.

But we really do need to start living within our means. In a nutshell, can we afford to keep increasing the numbers of staff in the NHS (as well as teachers in classrooms and police officers on the beat) or is it time to take stock, to measure the performance of our biggest spending public service, learn the lessons from elsewhere in the UK and change the way we do things, as well as the things that we do?

It is a commonly held view, backed up by more than sufficient research evidence, that the public sector singularly fails to measure the impact of the public pound and has little, if any, idea of the actual impact of policy decisions taken at national level.

This is the whole point and purpose of fiscal responsibility; linking not only the mechanics of raising finance to the decisions on expenditure but crucially bringing the whole debate into a performance framework where we can measure the value of each pound spent.

It is especially important in the NHS, with the onset of elected boards alongside an ever-increasing level of public and political scrutiny on spending decisions to create the ability for productivity and performance levels to be measured and assessed.

The Nuffield report shows that, to date at least, scant regard has been paid to ensuring value for money from the public pound in the NHS in Scotland, when we have the ability, through the measures used in the same study, to do exactly that.

As we approach an intensely political period, with the UK election this year, the Scottish Parliament election next year and our local government elections in 2012, it is more important than ever, when seen against the rapidly tightening financial backdrop, for all public spending to be justified in terms of its impact.

As a place to start, we could use the Scottish Government's five strategic objectives as the framework for that measurement: to study how we make Scotland fairer, wealthier, safer, greener and, of course, healthier.

However, as we do this, we need to ask ourselves whether is it acceptable to keep injecting huge sums of tax revenue from hard-working taxpayers into a system that is clearly not fit for purpose, propping up an ever increasing army of health service staff or should we just turn off the support system?

In other words, can we really hold our heads up high, content in the knowledge that inside the shiny new hospitals and health centres we are getting bang for our bucks, or should we be squeezing every last drop of value from our health service by arresting the decline in productivity, when indicators are heading south – metaphorically, if not actually. The answer should be obvious.

Ross Martin is policy director of the Centre for Scottish Public Policy