Wasteful health care: double burden on patients and environment

What links waste in healthcare with climate change?

Written by Associate Professor Martin Hensher

Concern about waste in health care – spending and use of resources that fail to deliver any benefit to patients or the public – is a perennial issue in health policy debate worldwide, but scarcely a cause of controversy.

More controversially (at least in Australia), the recent global climate strikes and protests by movements such as Extinction Rebellion highlight growing public concern over anthropogenic climate change and the unfolding environmental crisis. What links these two quite different issues? Concerns about both these issues come together quite strikingly when we consider two recent publications which might appear to be unrelated.

JAMA has recently published an updated estimate of the scale and nature of waste in the US health care system which concluded that waste accounted for about 25 per cent of total health care expenditure in the US – between US$760 and US$935 billion of waste. Meanwhile, Pichler and colleagues have recently estimated that, across OECD countries (plus China and India), health care systems account for an average of 5 per cent of national carbon footprints – and as much as 7.9 per cent of national carbon footprint in the US.

Shrank, Rogstad and Parekh identify health care waste across five of six domains: failure of care delivery, failure of care coordination, overtreatment or low value care, pricing failure, fraud and abuse, and administrative complexity (they found no existing studies on which to estimate this latter domain). Currently, we do not have comparable estimates of the extent of waste in the Australian health care system, although local researchers are doing excellent work in this field. Some of the worst excesses of the US system (especially in terms of pricing failure) will be less prevalent in Australian health care, but it would be foolish to suggest that we are immune. A recent OECD study estimated average levels of waste of between 15 per cent and 20 per cent of total health care expenditure across all OECD nations.

Meanwhile, Pichler and colleagues estimated that the Australian health care system generates about 4.2 per cent of the national carbon footprint; although the only previous study of Australian health care suggested that the health care system accounts for 7 per cent of our national carbon footprint. These and other studies of health care carbon footprints in different countries typically find that the health care supply chain (eg, pharmaceuticals, medical devices etc) and the hospital sector are the largest drivers of emissions in terms of final demand.

So how do these two quite discrete phenomena – health care waste and the carbon footprint of health care – intersect?

The answer is that waste in health care inflicts a double burden of harm – harm to patients, and harm to the natural environment. Delivery failures, poor care coordination, overtreatment and low value care all expose patients to avoidable risks of harm, while inefficient or wasteful use of health care resources potentially harms other patients by denying them access to care they need. And every time a patient receives unnecessary or inefficient care, needless carbon emissions occur – accelerating climate impacts, yet without yielding any benefit to patient outcomes. Ultimately, climate change itself leads to significant negative impacts on human health, setting up a cycle of joint harms to human and planetary health.

What can health care professionals and decision makers do to reduce this double burden of harm? Striving for ever safer care will minimise not just harms to patients, but also the environmental costs of the “patch up” care needed to treat patients who have suffered avoidable harms. Similarly, a conservative approach that seeks strictly to avoid overdiagnosis, overtreatment and low value care will reduce avoidable patient harms and will minimise the environmental impacts of unnecessary care. Excellent work towards achieving this aim is already under way through initiatives such as Choosing Wisely and the Wiser Healthcare research collaboration. But systemic and infrastructural solutions are also required.

Better care coordination has the potential not only to improve patient outcomes and reduce the harm from adverse events but may also allow many patients to be treated outside hospital – the most carbon-intensive component of the health care infrastructure.

Significant work can be done to reduce the carbon intensity of the health care supply chain. Many European countries have achieved “absolute decoupling” of health care spending from carbon emissions – meaning that total health care emissions have actually decreased over time, even as health care spending has increased. Australia and the US have not achieved this; health care emissions continue to grow, albeit at a slower rate than overall health care spending. Pichler and colleagues note that, ultimately, the largest determinant of the carbon footprint of health care is the emissions intensity of the domestic energy system that supplies health care. Some might argue that transformation of the national energy system lies outside the remit of the health sector; others that – as a key consumer – the health sector has an active role to play in accelerating this change. However, there is no valid argument against the proposition that the health care sector, public and private, has an important role to play in breaking the cycle of joint harms to human and planetary health.

Martin Hensher is Associate Professor of Health System Financing and Organisation at the Institute for Health Transformation, and Deakin Health Economics. 

This article was originally published in MJA Insight+ Issue 43 November 2019 as Wasteful health care: double burden on patients and environment and is republished here with permission.

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