Nova workboard

a blog from young economists at Nova SBE

Can a shared knowledge reduce healthcare costs?

In these days Italian government is approving next year’s financial acts and some of the hottest discussions are hospital budgets and the cost-cutting. Healthcare system is a big part of the national budget and reforms’ aim is to control the growth of its cost. In Italy the total amount of the healthcare system expenditure is € 111.108 billion and it counts for the 7,1% of the national GDP. Economists’ previsions say that this cost will increase 1.9% even if, thanks to the new taxation, the total expense will influence less the GDP. This because we expect a growth for the GDP rate more proportional than healthcare costs and to the planned cuts to the budget made by the government that will let Italy to save € 6 billion in three years.


But focusing on cutting costs, are we forgetting the patient? In some countries, for instance, there are long waiting times for surgery, new drugs are not being reimbursed and therefore don’t’ reach patients. Doctors are governments’ targets because they take costly decisions like to do or not an expensive lab test as well to operate an old patient. Limit the degrees of freedom of physicians can be a way to hold costs down but this brings physicians to complain that they are not free to make the right choices for their patients. We want to improve health for patients, but we need to do it at an affordable cost.


In the ‘70s a group of Swedish orthopaedic surgeons met at their annual meeting and started discussing the different procedures for hip surgery. They all had different ways of operating and everyone thought that their own method was the best. So they decided to measure quality in order to know and learn from what was best. They discussed on what was quality in hip surgery and they finally started measuring data. They found that putting cement in the bone before putting the metal shaft in, the prothesis lasts longer and most patients would never have to be re-operated. This transformed clinical practice in Sweden: they started visiting each other to learn from each other and, for many years, Swedish hip surgeons had the best results in the world.


There is a study done some years ago that compared US and Sweden. It inquired how many patients had needed to be re-operated on seven years after the first surgery. In the US the number was three times higher than in Sweden. So many unnecessary surgeries, and so much unnecessary suffering for patients. At the end those who have focused on quality have also the lowest costs: in the US healthcare quality is below the average of other countries. BCG did a study with the OECD data founding that if the American healthcare system would focus more on quality, raising it to the level of average OECD, it would save $500 billion a year, 20% of the healthcare budget.


The agents of this change are doctors that care the quality of their treatments for patients. It is important to have a cycle of continuous improvement created by finding a way to share the information on how to improve. BCG with some University are building a large global community called ICHOM (International Consortium for Health Outcome Measurement) where physicians and patients can discuss about what is quality, what should be measured  and make those standards global. Last year they worked on four diseases and, in three years’ time, they are planning to cover the 40% of the diseases.

So we can state that are not only costs but outcomes that matter to patients and we have to make doctors not a problem but a part of the solution.

Michele Da Re


Author: studentnovasbe

Master student in Nova Sbe

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