Measures of supply and demand

Please see ‘The uses of epidemiology and other methods in defining health service needs and in policy development’ section for definitions of supply, demand and need.

Measures of supply and demand are important in local performance management and capacity planning of healthcare providers and also as part of national targets.

Measures of supply indicate the amount of care that can be made available and include:

Staffing: consultants, total doctors, total nurses, managers and can be considered in terms of whole time equivalents and skill mix
Beds available: available bed-days = no. of beds x no. of days in period (it is important to just count staffed beds not total beds)
Equipment: e.g. MRI scanners, operating theatres
Budget: surplus, debt, funds available for investment, other sources of income
Ability to manage waiting times*

These measures can be used in isolation or combination, examples of combination measures include:

WTE nurses / beds available
consultants / operating theatre
total doctors / beds available
funds available per bed

Measures of demand indicate the quantity of health services the population wants. This may be legitimate need as well as desired demand (see definitions of demand and need), and so measures of demand must be interpreted with caution, for example:

Inpatient admissions: a high number of admissions can reflect a high demand for a service, however admissions are also linked to provision of alternative services in the local health system and the health status of a community or casemix, for example, admissions are likely to be high in an elderly, deprived population. Thresholds of admission by hospital or community staff also affect the number of people admitted though this is not a true measure of demand (it is actually a reflection of willingness to supply)
Hospital catchment population: the number of people who fall within the catchment area of a healthcare provider. This will be affected by a number of factors such as: distance from the service user to the healthcare provider, ease of access, ambulance transfer time, range of services provided at each institution, quality and standards of care. Sometimes populations fall geographically between 2 providers and therefore estimates must be made to assess the proportion of a population who will attend a healthcare provider.
Average length of stay (ALOS): may be a reflection of complexity of case mix (demand) or indeed poor discharge planning (supply)
Waiting times*

These measures can also be used in isolation or combination, examples of combination measures include:

Admissions per 1000 catchment population
Hospital bed days demanded (= number of admissions during period x ALOS)

*waiting times can be considered as indicators of both supply and demand. Increasing waiting times could suggest both a decreasing supply in the face of constant demand or a rising demand in the face of constant supply. The NHS Constitution sets out maximum waiting times for (emergency and non-emergency) treatment commissioned by the NHS (i.e. public health services commissioned by local authorities are not included). The effect of these targets have been a source of debate (Bevan, G. Hood, C.; Have targets improved performance in the English NHS? BMJ 2006; 332:419–22). They must therefore be interpreted in context.

Healthcare organisations are monitored locally and nationally in terms of supply and demand of services. Indicators of supply and demand are reported by NHS England, as at 2015/16 include ^[3]:

Maintain a referral to treatment maximum wait for non-emergency care of 18 weeks
Maintain an outpatient appointment attendance within two weeks of an urgent GP referral for suspected cancer
Maintain a maximum waiting time of two months from urgent referral to treatment for all cancers
Maintain a four hour maximum wait in A&E from arrival to admission, transfer or discharge
Maintain that ambulances responding to category A calls resulting in an emergency response arrive within 8 minutes
Maintain that operations cancelled for non-clinical reasons on or after the day of admission are rescheduled within 28 days

Further indicators used locally to monitor efficiency and performance within Trusts (with a view to meeting national targets) include:

Throughput (patients per bed in a given period of time)
Average length of stay in the over 65s age group compared to the under 65s age group
New to follow-up appointments ratio in outpatient services
Percentage occupancy (= bed days demanded / bed days available x 100)

Analysis can be undertaken by patient group, health resource group (HRG)*, by specialty, emergency versus elective care group, inpatient versus day case.

* Healthcare Resource Groups (HRGs) are standard groupings of clinically similar treatments which use common levels of healthcare resource, for example, management of fractured neck of femur which can be emergency or elective. HRGs can be considered as a consistent “unit of currency” which enable the comparison of activity within and between different organisations and provide an opportunity to benchmark treatments and services to support trend analysis over time. HRGs are analogous to diagnosis related groups (DRGs) used in other countries like Australia, the United States, Belgium, Denmark, Finland, France, Greece, Iceland, Ireland, Italy, the Netherlands, Portugal, Spain and Sweden.^[4] The use of HRGs can enhance data collection, and support the fair distribution of resources to providers.^[5]

References

[3] NHS England, Statistics Work Areas accessed via https://www.england.nhs.uk/statistics/statistical-work-areas/
[4] Rogers et al, HRG drift and payment by results, BMJ 2005; 330 (7491):563
[5] Dixon J. Payment by results—new financial flows in the NHS BMJ 2004;328:969-70