Measuring efficiency: is it going well?

Mª Luisa de La Puente

While the concept of efficiency is easy to understand if we consider it as the system that uses resources (inputs) to improve the health of the population, it's not as easy to measure as it appears due to the multiple methodological problems. The relationship between inputs and outcomes in the health sector is influenced by multiple factors external to the control of the health sector itself.

The European Union Health System Performance Assessment (HSPA) expert group has recently published a report on this (1).

It defines efficiency as the quotient between the inputs of the system (equipment, resources) and its outputs (the number of patients treated, for example) or its outcomes (the number of years of life gained, for example). He accepts them both but warns that using outputs as an approximation of outcomes can lead to false interpretations. It also highlights the importance of differentiating efficiency from cost control, since cost control is only concerned with reducing inputs without measuring the outputs/outcomes that that reduction causes.

In a health system, efficiency can arise for two different but related reasons. Efficiency materializes:

 1) When the same result could be produced, or even better, consuming fewer inputs, and

 2) When resources are spent on a mix of services that maximize the health of society as a whole (outcomes). These two typologies of efficiencies are conventionally cited, respectively, as technical efficiency and allocation efficiency. The allocation efficiency can be produced on a macro basis (paying attention to the service with the best cost/effectiveness ratio) and on a micro character (giving the treatment with the best cost/effectiveness ratio). The OECD idea of waste is associated with the notion of technical efficiency (2).

A survey is carried out in the 29 countries that are part of the group of experts, of which 22 answered. The survey only explores technical efficiency, since the assignment would require information on the relative value of the outputs of the services that don't it's available in most of the investigated countries. Half of the respondents state that they don't have a unified system to measure efficiency. Of the other half, approximately 40% respond that they consider the relationship between intermediate inputs and outputs, 40% between inputs and outcomes, and the remaining 20% consider the two previous possibilities. 80% responded that the hospital area is subject to regular measurements, not so much for strategy as for lack of information from other health areas such as primary care, mental health or social and health care. Technical efficiency in hospitals is also measured as it's the functional area with the highest cost. The results show how, although European countries place improving efficiency as their priority, the vast majority have real problems when it comes to having the necessary methodology and instruments to measure it.

The report presents as an example of evaluation of technical efficiency the management of the demand of acute pathology, which requires evaluating three moments of the process: before hospitalization, during the stay and after discharge, expanding the spectrum of the analysis to other areas such as primary care and social health care.

The OECD report insists on the same recommendation to broaden the spectrum when looking at the overuse of hospitals. This is exemplified by the excessive use of emergency services in mild pathologies and the excessive use of emergency and hospital services in chronic pathologies, both of which can be better managed in other devices. It also illustrates this with different examples of how certain OECD countries have made these changes.

The recommendations that emerged after reading the OECD report are:

1. It’s essential to have more homogeneous instruments for measuring and evaluating the efficiency of health systems that serve to guide decision-making.

2. It’s dangerous to make decisions based on comparisons and benchmarks with outputs/outcomes that are not well validated or contextualized.

3. When analyzing efficiency, as opposed to the concept of cost control, it's essential to broaden the spectrum of analysis to all services that address the care process. This formula also allows crossing the border between technical and assigned efficiency.

It seems, therefore, that the measure of efficiency is still at a very early stage. Improving the information that supports efficiency measurement is essential to support change. On the one hand, it will avoid inappropriate policies, on the other, it favours the evaluation of services with greater precision. Also, finally, it will promote the awareness of the population about what it means to obtain appropriate care, a necessary aspect in our country.

Bibliography

1. EU. Report by the Expert Group on Health System Performance Assessment. TOOLS AND METHODOLOGIES TO ASSESS THE EFFICIENCY OF HEALTH CARE SERVICES IN EUROPE. 2019

2. OCDE. Tackling wasteful spending on health. 2017.

Saving Plans: 5 Errors and 5 Proposals

Remember the games of the analogue times, precisely the moment when the player put the piece in the wrong place and there came a warning sound and the red light lit up the nose? Now it looks like a naff old thing, but I liked that Robert Kaplan and Derek Haas have chosen the image of one of these games, precisely one that is for operating a patient and that they have chosen it to illustrate their article published in the Harvard Business Review blog, "How not to cut health care costs".

When faced with budget cuts, they say, health managers around the world apply the same recipe: reducing staff costs (both in numbers and in wages), optimize the use of space to save general services, stop investments and rationalize spending. The authors do not maintain that this package of measures is poorly done, but they question whether behind these policies there isn’t a strategic way of thinking that combines resources to achieve the best results in the most efficient manner possible and the efforts of the basic savings pack can become counterproductive for the health of people and also for the economy of organizations.

Therefore, we should appreciate that the article analyzes five errors of the basic savings pack, while proposing five alternatives focused on efficiency and effectiveness.

The status quo bias

I like this JAMA (Volpp 2012) article because it raises the issue of the status quo and this is well-timed because just for now, we are accustomed to the debates on the introduction of new technologies or new drugs, and maybe that's why we’re now starting to evaluate the opportunity of innovation in terms of cost-efficiency or even cost-effectiveness. I’m talking about the $150,000 from the introduction of trastuzumab in metastatic cases of breast cancer per year of life gained, or the $370,000 of the use of erlotinib for advanced cancer of the pancreas cases (Weinstein 2010). But the question of the status quo is: are we wondering about the cost–effectiveness of clinical activities that are undertaken every day, or is that the status quo of having achieved a position in the portfolio of services, puts them at safety from doubts?

To illustrate the status quo, without going in-depth, I chose a couple of examples from the field of preventive activities and a couple more from the supposedly curative care activities.

Example 1 - PSA

Almost all health care assurances, both public and private, offer to men of 50 years of age, the opportunity to get an annual PSA test (Prostate Specific Antigen). It doesn’t seem to be a particularly expensive test, but now the controversy focuses on the disadvantages of early detection, because, according to experts, it’s not clear that this will bring more life to patients, but it does seem however, the resulting overtreatment can cause new problems in their daily life (incontinence, impotence). Expert groups claim to inform the men very well about all this prior to taking the test, but the assurances stubbornly continue to offer the annual PSA in its preventive portfolio without further consideration.

In case you are interested in this issue I offer the link to the U.S. National Cancer Institute.