Tackling Wasteful Spending on Health

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Author(s):
OECD
10 Jan 2017
Pages:
304
ISBN:
9789264266599 (EPUB) ; 9789264266414 (PDF) ;9789264266278(print)
http://dx.doi.org/10.1787/9789264266414-en

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Following a brief pause after the economic crisis, health expenditure is rising again in most OECD countries. Yet, a considerable part of this health expenditure makes little or no contribution to improving people's health. In some cases, it even results in worse health outcomes. Countries could potentially spend significantly less on health care with no impact on health system performance, or on health outcomes. This report systematically reviews strategies put in place by countries to limit ineffective spending and waste. On the clinical front, preventable errors and low-value care are discussed. The operational waste discussion reviews strategies to obtain lower prices for medical goods and to better target the use of expensive inputs. Finally, the report reviews countries experiences in containing administrative costs and integrity violations in health.

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  • Foreword

    Across OECD countries, a significant share of health care system spending and activities are wasteful at best, and harm our health at worst. One in ten patients in OECD countries is unnecessarily harmed at the point of care. More than 10% of hospital expenditure is spent on correcting preventable medical mistakes or infections that people catch in hospitals. One in three babies is delivered by caesarean section, whereas medical indications suggest that C-section rates should be 15% at most. Meanwhile, the market penetration of generic pharmaceuticals – drugs with effects equivalent to those of branded products but typically sold at lower prices – ranges between 10-80% across OECD countries. And a third of OECD citizens consider the health sector to be corrupt or even extremely corrupt.

  • Executive summary

    Health care systems in OECD countries are better than ever at promoting improved health and longevity, yet they involve major budgetary commitments that countries struggle to keep in check. Pressure is ever-mounting to provide greater and more equitable access to quality care and new treatments to ageing populations.

  • Acronyms and abbreviations
  • Ineffective spending and waste in health care systems: Framework and findings

    This chapter presents the overall framework and approach that guided development of the report as well as its main findings. Starting with a simple and pragmatic definition of waste, the first section identifies and groups various categories of waste. This framework is later used to identify policy levers to tackle these different types of waste. The next three sections provide an overview of the report’s findings regarding wasteful clinical care, operational waste and governance-related waste, respectively. The concluding section points to the benefits of tackling different categories of waste and presents the organisation of the overall report.

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  • Expand / Collapse Hide / Show all Abstracts Wasteful clinical care in health care systems

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    • Producing the right health care: Reducing low-value care and adverse events

      Value measures the health outcomes that matter to patients for every dollar spent. Health services that fail, for avoidable reasons, to maximise outcomes given available resources can be considered wasteful clinical care. Strong evidence exists that it persists in health care systems. Wasteful clinical care manifests itself in many forms: as avoidable adverse events and as care that is ineffective, inappropriate or poorly cost-effective – from the diagnosis of cancers that will not cause harm, to the sensitive matter of providing futile care near the end of life.This chapter begins by describing the extent of wasteful care and exploring its drivers. Persistent challenges include a lack of metrics to quantify wasteful care and the need to sustainably engage both clinicians and patients to change practices. The chapter concludes by discussing the information systems needed to detect wasteful care and the policy levers to tackle it.

    • Low-value health care with high stakes: Promoting the rational use of antimicrobials

      Inappropriate use of antimicrobials is perhaps one of the most threatening forms of wasteful clinical care. This is because inappropriate use of antimicrobials encourages the development of antimicrobial resistance (AMR). This chapter builds on available evidence to present a comprehensive set of policy actions to promote an effective use of antimicrobials. The chapter is divided into five sections. The first section analyses trends in consumption and estimates the share of inappropriate use of antimicrobials in OECD countries. This is followed by an assessment of the current and future health and economic burden caused by inappropriate use of antimicrobials and AMR. Section three spells out the main determinants underlying inappropriate antimicrobial use. Section four assesses the potential effectiveness of policy actions to promote an effective use of antimicrobials. Special emphasis is devoted to education and information activities; to organisational changes; and to a broader use of new technologies. A final section summarises the key policy implications of the chapter.

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  • Expand / Collapse Hide / Show all Abstracts Addressing operational waste in health care systems: Opportunities to spend less on pharmaceuticals and hospital care

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    • Reducing ineffective health care spending on pharmaceuticals

      This chapter focuses on opportunities to spend less on pharmaceuticals and other medical supplies. It starts with a discussion of perhaps the most intuitive case of waste, which occurs when prescribed pharmaceuticals (and other medical goods) are discarded unused. Next, the chapter proceeds to the foregone opportunities associated with not substituting originator drugs with cheaper therapeutic alternatives, such as generics or biosimilars. The final issue explored is whether lower prices for pharmaceuticals and other medical supplies could be obtained with more efficient procurement processes.

    • Addressing operational waste by better targeting the use of hospital care

      This chapter analyses a type of operational waste that consists of using more expensive than necessary inputs. The focus is on three prominent examples of wasteful use of hospital care: unnecessary hospital attendances; inefficient processes within hospitals; and delays in discharging patients. The chapter examines the extent and main drivers of unnecessary hospital use in OECD countries, and assesses whether certain services can be safely shifted from inpatient hospital care to less intensive care settings. Associated policy reforms are then analysed in terms of their effectiveness and ease of implementation, drawing from selected country experiences. Many of these policies are based on organisational reforms that: ensure that primary and community care options are available in the right place at the right time; offer better primary care services within hospitals; and improve care co-ordination. The policy potential of carefully designed financial incentives and non-financial policy levers is also discussed.

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  • Expand / Collapse Hide / Show all Abstracts Governance-related waste in health care systems

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    • Administrative spending in OECD health care systems: Where is the fat and can it be trimmed?

      Administrative tasks are essential at all levels of the health care system, from ministries and insurers to health providers. Many tasks are vital to ensure access, equity and quality of health care provision. Other activities may be of limited use, adding no value for patients.This chapter looks into differences in administrative costs at the level of the health care system, for both health care facilities and individual health workers. Some differences are related to the way health care is financed. Many countries see the need to tackle inefficiencies in health care administration. The most promising strategies to increase efficiency are centred on simplifying procedures – partly by making better use of ICT – and optimising the size of administrative bodies to generate economies of scale. Additionally, regulatory changes can have an enormous and immediate effect on administrative costs and the administrative workload of health providers.

    • Wasting with intention: Fraud, abuse, corruption and other integrity violations in the health sector

      This chapter discusses fraud, abuse, corruption and other integrity violations that divert resources from the health care system and as such are wasteful. The first section explains why the health sector is prone to integrity violations and gathers evidence on the scale of the problem in OECD countries. The second section analyses in more details integrity violations in service delivery and financing and reviews how OECD countries detect, prevent and tackle them. The third section points to the most common inappropriate business practices observed across health care systems and maps some of the regulatory and self-regulatory approaches used by countries to limit such practices.

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