Diminishing returns: tackling inefficiency in hospitals

2 May 2018 (Last Updated May 2nd, 2018 10:37)

“When you have your health, you have everything. When you do not have your health, nothing else matters at all.” This is a thought that may increasingly rest on our minds, as we as a society grow ever-older and our joints ever-creakier.

Diminishing returns: tackling inefficiency in hospitals
Issues with inefficiencies are due to miscommunication between interacting agencies or hospitals. U.S. Army photo by Reese Brown

“When you have your health, you have everything. When you do not have your health, nothing else matters at all.” This is a thought that may increasingly rest on our minds, as we as a society grow ever-older and our joints ever-creakier.

Around the world, as populations age, their requirements for proper care are ever-growing. Since the early 1990s, the Organisation for Economic Co-operation and Development’s (OECD’s) expenditure on healthcare has grown by about 70%, accounting for inflation. This huge hike in healthcare expenditure has been worth it, though, increasing life expectancies across its member countries by as much as seven years.

However, our life expectancies are growing by lesser and lesser amounts with increased expenditure, with a 10% increase in expenditure projected to bring only a measly 3–4 months of extra life to the average person. Even today, the amount of money spent per capita on healthcare is not an indicator of life expectancy, with the US having only a middling life expectancy despite spending the most money per capita on healthcare of the OECD countries. So what is the best way to improve our health moving forward?

The answer lies with efficiency. Healthcare systems of OECD countries in this day and age are characterized by tight budgets, low accessibility to cutting-edge products, and high patient volumes. This severely hampers patient-clinician time as well as the level of care that physicians are able to supply to their patients. It has been estimated that increasing the efficiency of the healthcare system could increase life expectancy by over two years at no additional cost. Clearly this is the better method.

So what are the main methods countries can use to improve the efficiency of their healthcare systems? The answer lies with determining the underlying causes of the inefficiencies that patients experience. Many times, issues with inefficiencies are due to miscommunication between interacting agencies or hospitals, and the division of responsibilities is not clear. This makes determining a root cause very difficult as well. One of the most common methods of improving efficiency is by clearly assigning responsibilities to agencies to ensure a minimum of overlap. This also has the added benefit of improving accountability amongst agencies, meaning improvements can be targeted and easily measured.

Secondly, paying managing bodies and hospitals according to the quality of the healthcare provided will be an extremely potent way to drive improvement in the system itself. Should a doctor be directly judged by the quality of their service, they will have increased motivation to make the correct diagnosis and provide adequate treatment, lowering the rate of patient readmissions at the hospital.

However, above all else, the best method seems to be to stop patients from ever getting sick in the first place. Regions and countries that had healthier populations all enjoyed more efficiency due to a lower number of patients, resulting in a lower overall workload as well as fewer comorbidities in each specific case. As such, government should focus on outreach programs that target at-risk populations to help them manage any nascent health problems before they require hospitalization.

For more insight and data, visit the GlobalData Report Store – Hospital Management is part of GlobalData Plc.