Waste can 'take up one-fifth of healthcare costs'

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, an expert said yesterday.

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

Based on practices in OECD countries, up to half of antimicrobial medicine prescriptions were unnecessary, he added.

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 more and therefore encourage women to opt for it rather than natural birth.

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

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

Waste in OECD countries amounts to as much as one-fifth of healthcare spending, he said.

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

One driver of this, he said, is paying for volume rather than value, so 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 is far cheaper than branded ones, will increase. It has already gone up from 27 per cent of money spent on medicine globally in 2012 to 36 per cent last year.

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.