‘Waste’ in health care: separating good from bad

Last week we hosted a conference jointly with the Organisation for Economic Co-operation and Development (OECD) to launch their new report on wasteful spending on health. The OECD’s report suggests that around one fifth of spending on health makes no or minimal contribution to improved health outcomes. At a time when NHS funding is back in the headlines, the report’s findings repay careful study.

Most of the examples of waste in the report concern the delivery of clinical care. They include adverse events, spending on medical procedures of low value, and the use of branded medicines when equally effective generic alternatives are available. The report also analyses waste in hospitals, for example when hospitals are used because of a lack of more appropriate alternatives, or when hospitals do not adopt best practices in the delivery of care. Waste also occurs through excessive administrative costs and fraud.

We were pleased to work with the OECD in launching the report because it echoes our own analysis of the opportunities to deliver better value in the NHS. Drawing on studies by the Institute of Medicine and others, we focused on evidence of overuse, misuse and underuse, and of unwarranted variation in clinical care. Work under way following Lord Carter’s review, led by Tim Briggs and Tim Evans – both experienced clinicians now working under the auspices of NHS Improvement – is challenging the NHS to act on this evidence in order to release resources for re-investment in effective care.

Our conference coincided with a new BBC series on the pressures facing NHS hospitals, featuring St Mary’s in west London. The first programme in the series offered a different perspective on waste by showing the impact on patients and staff when hospitals are under pressure. This was illustrated graphically by the case of a cancer patient whose operation was postponed on the day of surgery because the hospital’s intensive care unit (ICU) was full.

As well as being distressing for the patient and his wife, this case created enormous frustration for the surgical team, who spent most of the day waiting in the hope that a place in ICU would become available to enable them to proceed with surgery. The cost of the team’s time and the operating theatre that went unused must have run into thousands of pounds. Here was an example of waste, resulting not from overuse of services or poor clinical care, but from shortages in one part of the system creating bottlenecks and waste in another.

Watching this programme reminded me of a blog last year by economist Diane Coyle (£) in which she argued that the drive for lower costs has paradoxically increased inefficiency in the NHS when demand exceeds capacity. The same applies to parts of the public transport system that require travellers to wait for trains, tubes and buses or to stand during their journeys at peak times. Of course, seeking continuous improvements in efficiency is essential when budgets are constrained and demand is rising, but going too far is counterproductive.

Patients whose operations are postponed at short notice, particularly those with serious conditions like cancer, would surely agree. The widespread pressures facing the NHS in recent weeks suggest that capacity has fallen behind demand, as hospitals, GPs and others struggle to provide a timely response. And when clinicians and managers report that they are now experiencing winter levels of demand all year round, it is time to recognise that some forms of ‘waste’, such as spare capacity to deal with spikes in demand, are to be welcomed and not despised.

The wider point is that health and social care is a complex adaptive system in which small changes in one part of the system may have a disproportionate impact on other parts. An NHS that has for some time been operating near to – or at – its limits has experienced precisely this, with the cumulative impact of cuts in social care tipping some hospitals over the edge and into black alert. The solution surely lies in increasing capacity, not only in hospitals but also in intermediate care and services in the community – ie, across the whole system. The challenge is where to find the resources to ensure capacity matches demand in the most efficient way possible.

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#548903 Peter Martin
Retired, previously Chief Medical Adviser, The City of Oslo

One of the most wasteful practices in health care provision is keeping patients in hospital because of waiting times for social care. The practice is also frequently detrimental to patients´ health and well being.
Waiting times for discharge from hospital (excluding psychiatry) to social care in Norway were effectively eliminated, more or less overnight from 31st December 2011 to 1st January 2012, in a reform whose effects have been maintained consistently for the past five years. The logic is simple. Hospital care costs far more than home care or care in a nursing home, with a resultant negative effect on hospital finances. A considerable sum, based on the calculated costs of delayed discharge, was therefore transferred from hospital budgets to the local authorities´ budgets, accompanied by a statutory duty to provide care immediately (same day) to patients ready for discharge. Failure to do so requires the local authority to pay the hospital for the costs of keeping the patient, for each day the patient remains in hospital. As hospital care costs more than community care, a local authority which fulfils its statutory duty receives a significant boost to its budget allowing them also to improve quality and increase the general level of activity. The hospital ”breaks even” financially but can concentrate on its core activity rather than providing care to patients who do not need specialist treatment.
It is not always such seemingly logical solutions work in practice. In Norway, however, this simple (though considerable) transfer of funds from hospital to local authority accompanied by the necessary regulations had an immediate, dramatic and sustained effect. Total costs for health care provision remained unchanged, so this is a solution for a specific problem which can be considered separately from the question of the general level of funding.

#548907 Ilfryn Price
Professor of FM
Sheffild Hallam University

It is not hard to imagine the political squeals that such a proposal would produce but the Kings Fund would surely be an organisation that could at least raise it for discussion.

Thanks to contacts I Norway I can offer the location of the original white paper.


#548912 Simon Dodds
Health care system engineer
SAASoft Ltd

The primary cause of the falling efficiency, effectiveness, and productivity in the NHS is the gradual fragmentation of the system into semi-autonomous parts. It is the predictable consequence of the system design. Case studies have show that this effect is reversible, quickly and at little cost - by moving to a more synergistic design. And the potential benefits dwarf the £22 bn required productivity improvement. The gap is skills one. The capability needed to deliver the required system-wide improvements at scale and pace are captured by the term 'Health Care Systems Engineering' (HCSE). The NHS appears to be unaware of this opportunity, so has no formally recognised or accredited HCSEs, no training programme for HCSEs, and no plans to address this gap. Others are however tuning in to this message and major progress has already been made with developing a comprehensive training programme and the first wave of NHS HCSEs. http://www.ihcse.org

#548918 Dr. John Mark
Retired Consultant Anaesthtist

I'm an alumnus of St. Mary's, Paddington. It pained me to see in the BBC programme centred on St. Mary's a good illustration of waste which could be mitigated, albeit in the very short term, by imaginative bed redesignation. In the bed crisis situation, with no operations taking place, the Post Op Recovery facilities and staff were unused. One or two of those Recovery bed spaces could have been used to increase the total of ITU and High Dependancy places in the hospital. Even if extra, skilled staff were needed and drafted in at extra cost, the major planned and emergency procedures could have proceeded without disrupting the rest of the hospital.

#548919 Peter Martin
Retired, previously Chief Medical Adviser, The City of Oslo

Thank you to Ilfryn Price for providing the link to the white paper on The Coordination Reform in Norway. I would like to emphasize that it was the system for discharge of patients to municipal care that was such a success - other parts of the reform did not have the same dramatic effect and municipal co-financing was abandoned after a couple of years.

#548922 john kapp

I think that the greatest waste is overprescribing of drugs, which make the NHS toxic, so GPs do not want to work, and do not cure but have side effects making patients come back in a revolving door, overwhelming primary care. I am campaigning for more NICE recommended Mindfulness Based Cognitive Therapy (MBCT) courses to be commissioned and procured, so that GP can prescribe them instead of drugs. See www.sectco.org.uk. I hope that Kings Fund will back this campaign. It is also a waste of £20m to recruit 500 GPs from Portugal etc. (today's news)

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