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‘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.