The causes of variations in unit labour costs: a preliminary study

This paper reports a study of eight National Health Service Trusts, using data drawn from the Unit Labour Costs database and supplementary data collected for the purposes of the study, which set out to begin to explain the large variations in unit labour cost that exist. On the basis of extensive discussions within and between units, it was found that major causes of variations in productivity related to length of stay and bed utilization, which were in turn a result of variations in case mix. Staff utilization was a further major factor. Another observation was that the quality of data, particularly the integration of financial, activity and manpower data, was often poor.