Image caption The NHS has to make £20bn of savings by 2015

Hospitals in England must do much better at improving productivity if patient care is not going to suffer in the coming years, experts say.

The NHS has been told to make £20bn of savings by 2015 - a saving of about 4% a year.

The report by the Nuffield Trust think tank highlighted a host of areas where productivity gains could be made.

These included cutting lengths of stay, doing more day case surgery and improving the way goods are bought.

Savings could also be made in back-office functions, such as HR and finance, while staffing - which accounts for about 70% of costs - also needs to be looked at.

The report said it was important to get the skill mixes right and to limit the use of agency staff and overtime, while trying to tackle sickness rates.

It said only by tackling these issues could the NHS "reduce the need for cutbacks in services for patients".

'Very difficult'

The NHS budget is being increased over the next four years - but only by an average of 0.1% a year.

Improving hospital productivity Length of stay - Latest data shows that patients spend 7.2 days in hospital on average - higher than the international average and twice the figure in Denmark. Improving discharge arrangements, particularly at weekends, would make a big difference

- Latest data shows that patients spend 7.2 days in hospital on average - higher than the international average and twice the figure in Denmark. Improving discharge arrangements, particularly at weekends, would make a big difference Day case surgery - Everything from hernia repairs and cataract operations to ear, nose and throat surgery can be done as a day case. But again the NHS is lagging behind international best practice

- Everything from hernia repairs and cataract operations to ear, nose and throat surgery can be done as a day case. But again the NHS is lagging behind international best practice Back-office functions - By standardising and simplifying practices in areas such as HR, finance and IT, £600m could be saved from the £2.8m annual bill

- By standardising and simplifying practices in areas such as HR, finance and IT, £600m could be saved from the £2.8m annual bill Staffing - Money could be saved through reducing reliance on agency staff and overtime as well as tackling sickness rates through better occupational health

- Money could be saved through reducing reliance on agency staff and overtime as well as tackling sickness rates through better occupational health Procurement - The fragmented way basic goods, from gloves to paper, are bought means many places are over paying. About £500m a year - 10% of the consumables bill - could be saved if all trusts bought at the lowest available price

And because costs are rising at a higher rate than this, due to factors such as the ageing population and cost of new drugs, the health service is having to make the £20bn of savings.

The Nuffield Trust said this was presenting a major challenge because productivity had been getting worse over the past decade.

It focused on hospitals because they are the most expensive part of the NHS system, accounting for about £45bn a year - nearly half the entire budget.

The think-tank compared hospital performance against international data as well as taking an in-depth look at how six trusts had turnaround performance.

Judith Smith, head of policy at the Nuffield Trust, said: "It is very difficult to justify cuts if inefficiencies in areas such as rates of day case surgery, length of stay and the purchasing of hospital supplies remain untackled.

"The financial challenge facing the NHS will concentrate minds, but much more needs to be done.

"Why, when so much is known about what drives and can improve efficiency, has hospital productivity deteriorated?"

David Stout, of the NHS Confederation, which represents managers, said the Nuffield Trust was "absolutely right" to flag up the need to improve productivity.

"The NHS has a lot to do if it is going to meet the financial challenge it faces and time is running out."

Health minister Simon Burns added: "We agree the NHS should and can be more efficient and improve the quality of its services at the same time."