Healthcare systems globally have introduced numerous reforms, development, and incentives to improve health facilities. Every year, a significant amount of money is spent on healthcare goods and services. However, a significant share of health spending is ineffective due to operational inefficiencies and inefficient patient management. As per a JAMA article published in 2019, “The estimated cost of waste in the US health care system ranged from $760 billion to $935 billion. More than $200 billion in waste was reported to be due to the failure of care delivery, failure of care coordination, and overtreatment or low-value care categories.
Operational inefficiencies refer to the inefficient and unnecessary use of resources in the production and delivery of health services. This includes duplication of services, inefficient processes, overly expensive inputs, and errors, which include quality defects that result in rework or scrapping.

Operational inefficiency imposes unnecessary financial and nonfinancial burdens on all elements of the health care system. Wasted patient time can also lead to less satisfaction and even lost wages for patients.
When dealing with operational inefficiencies, it is imperative to first identify the existence of the problem. Next, suitable tools need to be developed to assess the scale of wasteful spending. Convincing and encouraging stakeholders to adapt their behavior is also important.
HEOR to tackle wasteful spending
Health economics and outcomes research (HEOR) provides a framework that helps evaluate the healthcare challenges and gather the relevant evidence to guide healthcare decision-making.
HEOR involves collating and evaluating a range of economics and outcomes data, which demonstrates how different approaches to a problem can impact outcomes and influence stakeholders differently. HEOR can be used to guide decisions related to healthcare investment, inform behaviors of the various stakeholders, assess outcomes, and measure quality within the healthcare system.
HEOR, by providing comparative evidence can guide healthcare decision-makers to identify how to best deploy healthcare budgets that can enhance health outcomes, provide the most value and lead to reduced healthcare waste.
By providing useful data and insights for healthcare decision-makers, HEOR complements traditional clinical development information (clinical trial data – safety, efficacy) and guides decision-makers regarding patient access to specific medicinal products and services. HEOR also plays an important role in value-based healthcare evaluation, which includes designing value-based insurance design and pricing. Value-based healthcare focuses on placing the patients at the center of healthcare decisions. HEOR can provide critical information on specific populations and treatment strategies that are used.

HEOR to achieve health spending goals
Wasteful healthcare spending can have several undesirable consequences leading to a high cost of medical care. It may also divert the funds which may have been allotted for other essential societal goals. All these can eventually hamper the financial sustainability of healthcare systems.
HEOR can assist decision-makers to get better insights, reduce healthcare waste and achieve their health spending goals – all of which can enable patients to live a better life.
References
- Shrank WH, Rogstad TL, Parekh N. Waste in the US Health Care System: Estimated Costs and Potential for Savings. JAMA. 2019;322(15):1501-1509.
- Bentley TG, Effros RM, Palar K, Keeler EB. Waste in the U.S. Health care system: a conceptual framework. Milbank Q. 2008;86(4):629-659.
- Tackling Wasteful Spending on Health Highlights. OECD. 2017. Available at:https://www.oecd.org/els/health-systems/Tackling-Wasteful-Spending-on-Health-Highlights-revised.pdf. Accessed on: 20 October 2021.
- Holtorf AP, Brixner D, Bellows B, Keskinaslan A, Dye J, Oderda G. Current and Future Use of HEOR Data in Healthcare Decision-Making in the United States and in Emerging Markets. Am Health Drug Benefits. 2012;5(7):428-438.