Health Care Wastage: An Affliction On Our Nation’s Health and Our Planet!

Health care expenditure (HCE) in the United States stands at around $4.3 trillion annually – about 18% of its gross domestic product (GDP) (JAMA 2019;322:1501-9). A study in JAMA revealed a startling fact about this remarkable number – that nearly 20%-30% of it is wasteful (JAMA 2019;322:1501-9). This amount is more than the GDP of Norway and Portugal combined! (asamonitor.pub/3UJc6yA). Just the wastage alone could have funded the entire government Medicare program and even exceeds national military spending and the sum total of primary and secondary education spending. America ranks #1 worldwide in HCE. Our national per-capita HCE is $12,914, more than twice that of the average of the next 10 developed countries on the list (asamonitor.pub/3AafQ2I). Sadly, however, we do not even rank in the top 10 of high-performing health care systems in the world, with Norway leading the list (asamonitor.pub/40iIUj4).

Many proposals have been made to decrease health wastage. The answer lies in following the available evidence. We could save $200 billion per year if we coordinated and integrated supply chain and delivery systems by following the dynamics of a circular economy, wherein reprocessing and reutilization are crucial (JAMA 2019;322:1501-9; JAMA 2018;319:990-2). This amounts to what is spent on the Department of Education, medical care for Veterans, and the Department of Energy combined! That $200 billion could potentially provide insurance for an additional 20 million uninsured Americans (JAMA 2018;319:990-2).

So why is our spending so high? A common defense is that the U.S. performs more procedures annually than other developed countries. However, data has shown that procedures and disease rates, the physician and nursing workforce, and hospital beds per 100,000 citizens are not drastically different between developed countries (JAMA 2018;319:990-2). What is setting our country back is the cost of labor and goods, including drugs and administrative costs (JAMA 2018;319:990-2). Administrative costs totaling $266 billion include time dedicated to billing and reporting to insurers and public programs (JAMA 2019;322:1501-9; JAMA 2018;319:990-2). According to Dr. Don Berwick at the Institute for Healthcare Improvement, moving to a single-payer system would possibly eliminate administrative issues regarding the navigation of various private and public payer programs. But doing so would run up against powerful stakeholders whose income is derived from maintaining the status quo. Hence, the lack of political will to change the milieu results in persistent administrative waste and out-of-control prices (JAMA 2019;322:1458-9).

Prices of pharmaceuticals are 50% higher in the U.S. than other developed countries. Reasons include high brand name prices and consolidated hospital markets, with hospital mergers creating their own price ranges. Drs. Kamal, Awad, and Khurshid discuss this in their enlightening article on national drug shortages (page 22). They explain how manufacturers’ profitability requirements cause them to venture away from older generic prescription drugs while investing more in pricier branded drugs. This causes a national shortage in essential older drugs such as heparin and hydrocortisone. They note how 73% of active pharmaceutical ingredients of generic medications are manufactured in India, China, and the EU, making logistics a daily challenge and often a nightmare. The consulting company McKinsey & Co. recently performed a survey and analysis of how the world’s supply chains are being affected due to COVID-19. While the “just in time” model was responsible for the last-minute deliveries of essential health care products pre-COVID, it was not a sustainable model during COVID when the demand for certain products grew and others declined (asamonitor.pub/40irSRZ; asamonitor.pub/41DePM5; asamonitor.pub/3UL5WxI). Lack of supply chain resilience was exposed, which led to shortages of equipment and deficiencies in health care delivery. Supply chains now account for 25% of pharmaceutical costs and 40% of medical device costs (asamonitor.pub/40irSRZ; asamonitor.pub/41DePM5; asamonitor.pub/3UL5WxI). Annual spending is about $230 billion on pharmaceuticals and $122 billion on devices. Even minor efficiency gains, the analysis said, could free up billions of dollars for investment elsewhere. Prior to COVID, risk management in health care, digitization, supply chain planning, and technology were fragmented and decades behind other fields with similar fast-moving consumer goods, such as aerospace and automobiles. However, health care has managed to swing the pendulum, and in the last two years, this field has shown much improvement in supply chain resilience, regionalization of production networks, and diversification (asamonitor.pub/41DePM5; asamonitor.pub/3UL5WxI). One greatly needed innovation includes dynamic, real-time pricing marketplaces with thousands of suppliers and allied products under one roof. Another is better holistic procurement platforms such as EVOLVE 2P^®, with specific modules for spend analysis, sourcing, and contract lifecycle management that allow for seamless information flow across different sections of the supply chain, offering a specific advantage over standalone systems (asamonitor.pub/43MGqMH). On page 21, Drs. Katsaliaki, Kumar, and Belani talk about the supply chain at the hospital level, the need to involve anesthesiologists in supply chain planning, and how eventually they affect the quality of care provided in ORs. They also address hoarding and the bullwhip effect that can affect hospital supply chains and contribute to increased expenditure.

Drs. Tewfik and Stillman, along with materials manager Samuel M. Paschall, discuss the supply chain as well (page 25). They stress the importance of “ownership” in supply chain management – anesthesiology leaders need to ensure accountability and clear communications about which staff are responsible for ready availability of certain medication and equipment. The authors endorse anesthesia technicians as integral members of the care team who can make a big difference in successful supply chain management.

While the bigger battle is being waged against health care expenditure waste, health care providers all wage their own battle against physical waste in the health care sector on a smaller, more personal level. The health care industry is responsible for around 6% of all global greenhouse gas emissions (GHG) and air pollutants (Lancet 2022;400:1619-54; Lancet Planet Health 2020;4:e271-9). Dan Vukelich, President of the Association of Medical Device Reprocessors, reiterates the grim warning of the U.N. Intergovernmental Panel on Climate Change, alerting us to the effect of GHG on the health of humans and the planet (page 20). He stresses in his article the crucial impact medical device reprocessing could have on the supply chain and promotion of a circular economy. He talks of manufacturers having vested interests in causing “forced obsolescence” and how health care workers could help the supply chain by recycling. GHG concerns are especially relevant to anesthesiologists as waste anesthetic gases contribute 0.01%-0.1% of total GHG and 3% of national health care GHG, as underscored by Drs. Ahn, Bennici, and Costa in their article on page 24. Their analogy that one hour of desflurane is equivalent to the automobile emissions of 200-400 miles of driving indeed drives the point home! They emphasize the importance of technology that can capture and recycle volatile anesthetics. Nitrous oxide scavenging and evacuation pumps, which are important in dentistry as well, are discussed. In the perioperative setting, sterilizers and autoclaves also contribute to GHG and, hence, optimally choosing instruments, avoiding opening unnecessary disposables, reusing equipment, recycling, and reprocessing cables have all been shown to decrease our carbon footprint without affecting quality of care.

The idea that single-use devices safeguard against infection better than reusable, decontaminated devices has proven to be a myth (Resour Conserv Recycl 2019;155:104643). In a landmark study by the Aravind health care system in Southern India, where 1,000 cataract surgeries are performed per day, it was proven that comparable quality results can be obtained using reusable equipment in an assembly line fashion, with the carbon footprint being 5% of equivalent surgeries in the U.K. Moreover, 60% of the surgeries are performed at minimal to no cost to the patient. This proves a dual point – that if reusable equipment is used with minimal administrative costs, excellent but inexpensive care can be delivered to the patient while leaving a low carbon footprint (J Cataract Refract Surg 2017;43:1391-8).