From cutting costs to eliminating waste: reframing the challenge

All health care systems are under cost pressure driven by increases both in demand (rising expectations; aging population; less social support) and in supply (clinical and technological developments). Various approaches to controlling cost have had only a marginal impact.

Agreement that the status quo is neither financially sustainable nor providing high-quality care has, yet again, prompted attempts to transform services through the integration of health and social care. In several countries, this takes the form of Accountable Care Organisations ¹ whilst in England the latest approach is the creation of region-wide Sustainability and Transformation Plans. ² One thing these innovations have in common is the recognition that, if the support of the public, clinicians and politicians is to be obtained, the case for change must emphasize the goal of improving quality rather than cutting costs.

While the language of cutting costs and increasing productivity and efficiency are anathema to many, raising as they do suspicions of service reductions, there is another approach that might prove effective. What if the reason for transforming care was reframed as the need to eliminate waste? The latter is a goal that everyone will endorse.

In recent years, there has been increasing acceptance by clinicians of the existence of ‘waste’ in clinical practice, a view that is endorsed by their professional associations.^3–5 But how strong is the evidence that significant improvements in efficiency could be achieved? How much waste is there in health services?

A useful categorization of six sources of waste was proposed in 2012 by Don Berwick and Andrew Hackbarth, ⁴ although two of their categories – over-pricing of services by providers and fraud – are of little relevance in systems in which most providers are in the public sector. Their first category is unsafe care which results in complications requiring additional care. A recent study in the Netherlands found that the cost of major abdominal surgery rose from 8500 to 29,200 Euros for the 20% of patients suffering a major complication. ⁶ Poor safety may also result in litigation, the cost of which was £1.4bn for the NHS in England in 2015/2016. ⁷ There is increasing evidence to support the maxim, better care can save money. ⁸

The second category of waste is the lack of coordination between services such that patients do not receive timely appropriate care. This may lead to a worsening of their condition and the subsequent need for more expensive but avoidable care. Much of the financial case for greater integration of services hinges on this concern, in particular, the benefits that could result from bringing health and social care together.

Third is the problem of over or unnecessary investigation and treatment. For example, despite being of no or low-value, 46.5% of patients undergoing non-cardiac elective surgery still underwent a routine ECG in the USA in 2011, with hospitals ranging from 12% to 75% use. ⁹ Attempts to tackle such inappropriate use have centred on encouraging clinicians not only to follow best scientific evidence, such as in England through the publication of around 1000 ‘do not do’ recommendations by NICE ¹⁰ but also to taking patients’ preferences into account. Involving patients in decisions about surgery reduces demand by about 20%. ¹¹ International recognition of the potential for eliminating wasteful practices led, in 2013, to the medical profession launching the Choosing Wisely campaign. In the USA, professional societies were invited to be ‘stewards of finite health care resources’ ¹² and in the UK the royal colleges recognized that ‘one doctor’s waste is another patient’s delay’. ⁵ The latter extended their concern beyond financial waste to environmental waste, be it carbon emissions of health services or the use of precious metals in the manufacture of equipment, all of which can have associated adverse cost consequences. ¹³

The fourth area of waste arises from administrative complexity. While there may be benefits from separating purchasing (commissioning) responsibility from providing services, they come at a high cost. Complex billing and reimbursement mechanisms consume 15% of healthcare resources in the USA. ¹⁴ Even the more modest approach to markets in England has been estimated to cost £4.5bn a year. ¹⁵

One additional source of waste that was not discussed by Berwick and Hackbarth is technical or productive inefficiency that arises from the way clinical care is provided to individual patients. The dearth of studies based on detailed ‘bottom-up’ costing means that there is little systematic evidence available about the cost of producing an episode of care, and about how the cost varies between providers or practitioners. An inkling of the potential extent of such variation is revealed in a recent study of memory clinics (for people suspected of having dementia), which found that the cost of the assessment of a new patient varied 16-fold between clinics. ¹⁶ Whether this scale of variation would be found in other clinical areas needs to be investigated. Our knowledge is limited to the extent of variation in reimbursement charges (which are in effect, prices) in the USA^17,18 and, in England, variations based on reference costs which are simple, crude ‘top-down’ estimates. ⁸ Neither approach reveals the real cost of producing a service by a particular provider.

It is clear that the ‘opportunity for waste reduction in health care is enormous’. ⁴ As pressures mount on health and social care systems to provide high-quality care with limited resources, the only solution is to become less wasteful. The potential benefit of reframing the challenge as one of eliminating waste is that such an aim should be attractive across the political spectrum and to the public, media, clinicians, managers and politicians. No one is in favour of waste.

There will, however, be challenges to be met. Getting clinicians to change their practice has had only mixed success. Doctors are readier to identify wasteful practices in other specialities than their own ⁹ and even when they accept there are opportunities to reduce low-value services, they find it difficult to implement. ¹⁹ So there must be some doubt as to whether well-intentioned initiatives, such as Choosing Wisely, ²⁰ will be sufficient when huge variation in the use of cost-effective procedures persists: in England in 2013/2014, adherence to the recommendation to use cement in primary total hip replacement still varied from 3% to 98% between hospitals, with half the hospitals using cement in less than half their patients. ⁸ Another challenge is to gain the commitment of politicians to policies that might prove controversial. For example, while the benefits of more compassionate, patient-centred care that would accompany the elimination of wasteful interventions in end-of-life care are clear, there is reluctance on the part of politicians to promote the widespread use of advance care directives (living wills) to enable such a change. Similarly, elected representatives are often reluctant to support changes in local services even if those changes will lead to more efficient care.

Successful change takes time, skill, and the involvement of the public, clinicians and politicians. In addition, financial incentives need to be aligned correctly and the threat of financial disruption of providers needs to be managed. In many countries, including the UK, time is short so reform must be addressed urgently, if the values on which existing systems are based are to survive. Reframing the challenge as ‘the elimination of waste’ offers an escape from inherent intransigence.