Comment / Timescale key to cutting waste

The OECD says about a fifth of health spending adds no value, but eliminating waste takes time

Wasteful healthcare spending is common, according to a new report from the Organisation for Economic Co-operation and Development (OECD). The report – Tackling wasteful spending on health – suggests that, despite health budgets being under pressure across the world, about one fifth of health spending ‘makes no or minimal contribution to good health outcomes’.

The finding should come as no surprise. Don Berwick, former chief executive of the Institute for Healthcare Improvement in the US, famously suggested, several years ago, that the US healthcare system was wasting at least that figure across six categories. There was no reason to think other health systems were any different.

The OECD report backs up its assessment with various examples covering wasteful clinical care, operational waste (including poor targeting of hospital care) and governance-related waste. On the clinical care side, these include repeated diagnostic tests or services and patients receiving low-value care or even care that causes serious complications. Looked at alongside high-profile reports of the current pressures on the NHS, this could lead people to believe that the solutions to the health service’s financial problems are entirely within its own hands. All it needs to do is eliminate its waste and redirect the resources to meet the real demand.

But identifying waste (real and potential) is one thing, eliminating it is not so simple. 

It is not that it can’t be done, but it will need time and energy. And they are two things in short supply right now with clinicians and support teams stretched to breaking point to meet unprecedented demand.

What seems simple – taking procedures of limited clinical value off the treatment menu, for example – is rarely straightforward. An item on Radio 4’s Inside health programme in January demonstrated this perfectly. The incision of meibomian eyelid cysts is typically not funded by clinical commissioning groups and regarded as ‘by exception only’ treatment. But an eye surgeon on the programme said this was a false economy, even suggesting that the cost of asking for exceptional funding exceeded the cost of treatment.

So you need a common definition of waste and sensitive access controls put together by clinicians and managers. There’s no simple flick of a value switch.

The OECD report is a useful reminder that there is in general significant potential to get better value for money out of existing healthcare resources. But the danger is that
it could get seen as an excuse to justify current funding levels. 

All organisations carry waste in them. And the NHS is no different. (Or perhaps it is different in having greater scrutiny put on it.)

There are lots of good initiatives that aim to tackle this waste – atlases of care providing opportunities to compare variations in activities and vanguards looking to revise pathways, in part to ensure patients are treated in the best, most cost-effective way. 

Of course, more could be done. NHS Improvement’s Jim Mackey called for increased focus on the ‘incredible variation across the provider sector and within organisations’, when he addressed December’s HFMA annual conference. But it is hardly as if clinicians or managers are twiddling their thumbs wondering what to do with their time. The reality is that there is a significant amount of waste in the NHS and it needs more funding. It needs this funding to meet the huge demand it is currently facing while it looks to redesign more efficient pathways. 

By all means, there should be downward pressure on budgets to create a sense of urgency in the pursuit of greater productivity. But expecting a miraculous and unrealistic conversion of existing ‘waste’ into usable resources will undermine any attempts to put the service on a sustainable footing for the long term.