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Tackling Wasteful Spending on Health

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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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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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