OECD report highlighting wasteful healthcare spending by governments

OECD in its report titled “Tackling Wasteful Spending on Health” finds that a significant proportion of healthcare spending in OECD countries is being wasted. Approximately one-fifth of expenditure on health goes for a waste and makes no or minimal role to good health outcomes. Therefore, governments could spend lesser on healthcare and still provide the same level of treatment to improve patients’ health. Efforts to improve the efficiency of health spending at the margin are no longer good enough. It has been noted that 1/10th of the patients in OECD countries are unnecessarily harmed at the point of care and more than 10% of hospital expenditure is spent on amending avoidable medical mistakes or hospital acquired infections. The report helped identify three main categories of wasteful spending

  • Clinical care wastage – patients not receiving the right care including duplicate services, hospital acquired infections, medically unnecessary caesarean sections
  • Operational wastage – Improper resource management, use of branded drugs where is a generic equivalent available
  • Governance related wastage – Comprises of unrequired administrative procedures, fraud, abuse and corruption

The report also mentioned some of the strategies that could be implemented to reduce waste which can be summed up as:

  • Do not provide services that do not fetch value such as unnecessary surgeries and clinical procedures
  • Use for generic equivalents when available
  • Policy makers to write rules that rewards providing the right services than quantity


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