Waste in healthcare a costly problem, say experts

Ang Mo Kio Polyclinic, which opened in January, was built with the extensive use of prefabricated components, resulting in 30 per cent improvement in construction productivity.
Ang Mo Kio Polyclinic, which opened in January, was built with the extensive use of prefabricated components, resulting in 30 per cent improvement in construction productivity. ST PHOTO: KUA CHEE SIONG

Waste in OECD nations amounts to as much as one-fifth of health spending: Economist

Out of every 10 patients hospitalised, one would suffer an "adverse event" that would add 13 to 17 per cent to the cost of care, according to an expert.

Up to 70 per cent of these events can be avoided, said Mr David Morgan, a health economist with the Organisation for Economic Cooperation and Development (OECD), yesterday.

He added that based on practices in OECD countries, up to half of antimicrobial medicine prescriptions were unnecessary.

Giving a keynote speech at the Healthcare Infrastructure Technology and Engineering Conference at Max Atria at the Singapore Expo, Mr Morgan said there is a lot of waste in healthcare, some deliberate and others a result of inefficient systems or lack of knowledge.

For example, caesarean sections are more prevalent in some places, either due to cultural preferences, or because doctors are reimbursed much more and therefore encourage women to opt for the procedure rather than natural birth.

Mr Morgan also said some places have administrative expenditure that is more than six times higher than in others, with "no obvious correlation with performance".

Health Minister Gan Kim Yong, who opened the two-day conference yesterday, said MOH Holdings, the Government's holding company for public healthcare assets, called for quotes last Friday for consultancy services to develop smart technologies for public healthcare facilities.

Waste also occurs when systems are inefficient and hospital discharges are delayed. Patients turning to hospital emergency services instead of going to an outpatient clinic also add to the waste.

He said waste in OECD countries amounts to as much as one-fifth of healthcare expenditure.

Dr Rohan Hammett, a partner in consulting firm Deloitte, also spoke of wasted resources in healthcare.

One driver of this, he said, is paying for volume rather than value. In such cases, there is no incentive to ensure good outcomes.

He predicted that as countries look for more bang for their buck, the use of generic medicine, which are far cheaper than branded ones, will increase. The sum spent on generic medicine has already gone up from 27 per cent of money spent on medicine globally in 2012 to 36 per cent last year.

Dr Hammett sees healthcare becoming more efficient with technology, so patients will not have to wait hours in a clinic. They should be able to fix their appointments, get medicine or even consult a doctor through their mobile phones, he said, adding that up to 40 per cent of work in hospitals can be automated.

Health Minister Gan Kim Yong, who opened the two-day conference yesterday, said MOH Holdings, the Government's holding company for public healthcare assets, called for quotes last Friday for consultancy services to develop smart technologies for public healthcare facilities.

This should translate into more efficient and effective processes for those running the facilities as well as for patients, said an MOH Holdings official.

Recent buildings, such as Ang Mo Kio Polyclinic, which opened in January, were built with the extensive use of prefabricated components, resulting in 30 per cent improvement in construction productivity.

Mr Gan said: "Construction productivity helps us build smart. But we can go further. The design of healthcare facilities can help staff work more productively, and help patients navigate more smoothly."

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A version of this article appeared in the print edition of The Straits Times on March 28, 2018, with the headline 'Waste in healthcare a costly problem, say experts'. Print Edition | Subscribe