Most healthcare professionals and institutions have a deep commitment to delivering quality healthcare. However, we all have different notions of what constitutes quality in healthcare. The United States National Academy of Medicine (formerly known as the Institute of Medicine) takes a helpful holistic view. In its publication, Crossing the Quality Chasm, the IOM identified the following six domains of health care quality and described aims for 21st Century health care systems.
- Safe: Avoid harm to patients from the care intended to help them.
- Effective: Provide services based on scientific knowledge to all who could benefit and refrain from providing services to those not likely to benefit (i.e., avoid underuse and misuse of services, respectively).
- Patient-centered: Provide care that is respectful of and responsive to individual patient preferences, needs, and values and ensure that patient values guide all clinical decisions.
- Timely: Reduce waits and sometimes harmful delays for both those who receive and give care.
- Efficient: Avoid waste, including waste of equipment, supplies, ideas, and energy.
- Equitable: Provide care that does not vary in quality because of personal characteristics such as gender, ethnicity, geographic location, and socioeconomic status.
Whereas safety, timeliness, and effectiveness are readily associated with clinical outcomes, and timeliness and patient-centeredness are readily related to patient experience, efficiency and equity often get lost in the mix. People hardly ever say, "We provide quality healthcare because we are very efficient!" I argue here that efficiency must be a core competency of any healthcare system seeking quality healthcare.
I would be remiss if I did not pause here to address the elephant in the room.That we often believe that efficiency conflicts with the other five domains.So much so that talk of efficiency can elicit a visceral reaction from well-meaning providers and policymakers. A response to the mistaken idea that the speaker promotes efficiency (read dollars over lives) as the real sought outcome of a health system and not equity or any other desired health gain.However, in reality, efficiency is a functional relationship between inputs (such as money and time) and outputs (such as equity and health gains)- not in and of itself an outcome. Efficiency is a necessary condition that allows a system to convert its inputs into valued outputs. In healthcare, those valued outputs are usually health gains and health equity. Therefore, it is reasonable to talk of both health equity being a desirable output of a health system and the efficient production of that output.
Because it is neither output nor input, stakeholders in healthcare do not readily grasp the concept of efficiency. In addition, it is most certainly true that patients only care about the health gains that matter to them. Why should a patient care whether your system delivers quality to everyone and does it efficiently? All they want is to get better right now. Efficiency and equity are far from their minds. However, healthcare providers and policymakers downplay efficiency and equity at everyone's peril. These are the engines that drive valued outcomes. Specifically, efficiency is the condition that makes quality healthcare possible.
Efficiency enables a healthcare system to deliver health gains to all patients regardless of their characteristics. A highly efficient system is more likely to produce these valued outputs consistently than one plagued with waste. We can speak from the perspective of very detailed micro-units (such as a patient-doctor interaction) through macro units (such as the entire health system). Whatever level we choose, we are talking about the success with which healthcare systems reliably transform resources into physical and service outputs (such as the number of patient consultations) or (more ambitiously) into valued outcomes (such as improved health under the conditions described above).
On the other hand, we define waste as anything that does not contribute to delivering valued outputs/outcomes. Waste is typically a function of poorly designed and inconsistent processes. The processes of a health system should preserve patients' good health and restore patients to a healthy state when ill. In my view, any healthcare activity that does not contribute to this outcome in a way that respects the autonomy and individuality of the patient and does not produce undue physical, emotional, social, or financial harm to a patient is considered wasteful. To compound matters, waste is hardly ever a neutral attribute of a system. It is not only that it does not contribute to desired outcomes; it actively hinders the delivery of valued outputs such as health equity and health gains.
Processes in the health system may be inefficient for two distinct but related reasons. Firstly, health system inputs, such as finances or other resources, may be directed at outputs that do not provide maximum health outcomes for most people. For example, we know that primary and preventative care offers aggregate greater overall benefit; however, we do not prioritize this long-term investment because it is not as sexy as building a fancy hospital named after some prominent person. Secondly, there could be a misuse of inputs in the actual delivery of healthcare. Misuse of inputs at any stage of the process will mean that there will be fewer overall health gains than could have been achieved for a given initial level of resources.
To better understand these reasons, it is helpful to view efficiency as existing in three different dimensions as follows:
1.Technical efficiency – Technical efficiency looks at how well the system minimizes inputs in producing its chosen outputs or maximizes its results given its available level of inputs. The system achieves efficiency when it obtains the maximum possible improvement in outcome from a given resource input bundle. These inputs could include hospital beds, physicians, nurses, medicines, investigations, and other inputs. From a cost perspective, technical efficiency is concerned with the optimal utilization of inputs to produce maximum health outcomes for the minimum cost. An intervention/service design that uses a lower total cost of resources to achieve the same effect will be more efficient than the alternative. Therefore, technical efficiency allows us to assess the relative value for money of competing interventions and service designs.
2.Allocative efficiency - Allocative efficiency focuses on deploying resources across different activities within and outside of healthcare. It looks at the productive efficiency with which a system uses healthcare resources to produce health outcomes and the efficiency with which the system distributes these outcomes among the community of patients. For instance, there may be suboptimal resource allocation at the clinical care level, such as hospital treatment for conditions that do not typically require such a resource-intensive setting. In this scenario, the overutilization of resources on one or some patients can reduce the ability of a hospital to deliver valuable outcomes to other patients. However, a broader societal perspective may also reveal that strategic decision-makers have misallocated resources concerning, for example, preventive and curative services. This social perspective has implications for the definition of opportunity costs. From this perspective, allocative efficiency refers to whether an additional dollar spent on health care yields benefits that are as valuable to consumers as an extra dollar spent on schools, housing, or other goods. Because of its emotive quality and revered cultural status, it is often tempting for policymakers to continue to allocate more and more resources to healthcare. There is an assumption that a dollar invested in healthcare is a dollar well spent. However, even if one ignores the opportunity costs to other critical social goods, it is clear that increased healthcare spending does not necessarily yield better outcomes. The starkest example of this is the USA, where spending on healthcare has dramatically outpaced that in other wealthy countries, while results have been similar, if not slightly worse.
3.Care efficiency – Allocative efficiency operates at a strategic level, whereas technical efficiency is relevant at an operational level. However, neither of these system considerations contend sufficiently with the efficiency of treatment decisions at the patient-doctor level or the various other interfaces between the public and healthcare system delivery points.
From an individual patient perspective, care efficiency looks at how well a provider leverages system and patient resources to achieve outputs desired by individual patients. As much as we sometimes think our patients are just biological entities with health issues, we must remember that a biopsychosocial approach to care offers the best opportunity of an outcome valued by the patient. For instance, what tradeoffs would a patient make for the convenience of an expensive monthly drug over a daily drug? Or what is the economic value of knee surgery to a professional athlete versus a more sedentary person? What are the tradeoffs that we must make to ensure that the patient gets the best value? These are essential questions that consider the patient as a whole, rather than just a malfunctioning human machine that we must set right again. Without careful consideration of these questions, we are prone to clinical waste. Clinical waste across many encounters also has a system-level impact and is a significant contributor to wasteful healthcare expenditure in the USA. It is a just as prominent a contributor as administrative waste, overpricing or fraud, and abuse. Therefore, it is essential to consider how well clinical decisions deliver outcomes valued by patients. Are we matching our goals with those of our patients?
Thus, technical efficiency addresses using given resources to maximum advantage at a minimum cost. Care efficiency aims at choosing the right combinations of resources to achieve the maximum health benefit for a given patient subject to their goals, and allocative efficiency of the right mixture of healthcare programs aims to maximize the healthcare value-added of society. All of these perspectives are interrelated in complex and consequential ways.
In many other sectors of the economy, consumer preferences help to ensure the most valued outputs at market prices. However, well-known market failures in the health sector mean that the traditional market mechanisms cannot work, allowing poor quality or inappropriate care to persist. Decision-makers must set the tone through a strategic and operational commitment to efficiency to offer quality care to all patients, thereby creating an environment where conversations between clinicians and patients yield care supported by evidence, truly necessary, and free from harm. Although some inefficiency is present in all socio-technical systems, such as healthcare systems, commitment at a strategic and operational level will foster a culture where inefficient and potentially harmful patient care is the exception rather than the norm. A neglectful cultural attitude to inefficiency will negatively affect patient care, as shown below.
Inefficiency is often a symptom of a much deeper cultural issue. A culture plagued by inefficiency often features inattention to processes and care coordination or misaligned incentives. Careful attention to efficiency up and down a healthcare system can only help promote carefully considered and focused decision-making regarding patient care. Far from being a penny-pinching culture, it is a relentless focus on delivering value and ruthless elimination of anything that does not advance outcomes valued by patients and the wider society. Persons familiar with lean healthcare and other process improvement frameworks will immediately recognize the difference between penny pinching and efficiency.
Inefficient healthcare culture poses severe concerns for several reasons. To show what we mean here, we will itemize some of those reasons as follows:
1.It may limit healthcare gains for patients who have received treatment because they do not receive the best possible care within the health system's resource limits. These patients often have not fully benefited from engaging their provider's technical expertise. Because we often readily reach the more inefficient solution. Whereas further deliberate thought to yield more efficient approaches would provide insights that benefit the patient further. This idea leans on Kahneman's dual-processing theory, which states that people make decisions using the fast, automatic brain or slow, deliberative brain. The slow brain is better at decision-making. Unfortunately, inefficient solutions that are more quickly arrived at are likely to be creatures of the fast brain.
2.By consuming excess resources, inefficient treatment may deny treatment to other patients who could have benefited from treatment had resources been better used. Often the waste is financed at the expense of actual valuable care.
3.Inefficient use of resources in the health sector may sacrifice consumption opportunities elsewhere in the economy, such as education.
4.In countries where public sources dominate funding for health, suboptimal use of resources may reduce society's willingness to contribute to the financing of health services, thereby harming social solidarity, health system performance, and social welfare.
5.Finally, inefficient care fails patients in two key ways. At best, it warps the patient's understanding of their conditions and, at worst, exposes patients to harm from unnecessary procedures.
Tackling inefficiency has a significant accountability value: to reassure taxpayers that decision-makers are spending money wisely and to reassure patients, caregivers, and the general population that the health system treats their claims fairly and consistently. Also, healthcare funders (including governments, insurance organizations, and households) are interested in knowing which systems, providers, and treatments contribute the most significant health gains for the level of resources they consume. Efficiency becomes particularly important in light of financial pressures and concerns over the long-term economic sustainability of many health systems, as decision-makers seek to ensure and demonstrate the efficient use of healthcare resources.
In conclusion, there is ample evidence to suggest that inefficiency is a significant problem in healthcare. From a strategic viewpoint, it limits the ability of health systems to deliver on valued outputs. Most immediately, it can lead to poor outcomes for the patients directly affected. Additionally, inefficiency somewhere in the health system is likely to deny treatments and reduce access to patients who otherwise have access if the system has better-used resources. From a broader perspective, inefficiency in the health system may divert resources from other social goods, including public services such as education, where there could be a beneficial use of resources. Inefficiencies in the healthcare sector may affect what happens even in other productive sectors. Rising healthcare costs can lead to higher public health insurance contributions, increasing unemployment because of the increased employment cost.
On the other hand, eliminating waste demonstrates good stewardship of the healthcare system and inspires a culture of focused and well-considered care decisions. This maintains the willingness of governments and their citizens to pay for universal health coverage through their taxes and social insurance premiums and thereby secures the manifest social gains that such coverage brings. In contrast, a lack of evidence that a system or a provider performs efficiently may damage confidence in these institutions and compromise the social solidarity on which affordable and universal modern healthcare systems depend.
