Review findings
Financial sustainability concerns regarding public health systems in
developed countries were widely acknowledged, along with the associated
need for efficiency improvement to meet these concerns. Papers selected
for inclusion in this review described various approaches to address
these issues, however no single, best-practice or evidence-based
comprehensive framework for managing these issues at the system level
was identified. The findings discussed in the subsequent section of this
paper outline the efficiency context, factors, considerations and
approaches relevant to the review question in order to inform a
framework for managing efficiency improvement that offers a range of
strategies and supporting evidence. Given the fragmented and disparate
nature of the evidence identified, there were no clear and consistent
themes or factors which were consistently identified across all
countries or health systems. Rather, the synthesis of these factors
provides a collective view of factors which may be applicable to public
health systems in developed countries. The thematic analysis of factors
outlined below is the result of the synthesis of related but
separately-identified issues with each issue being identified in only
one or a few papers evaluated, rather than a wide consensus of repeated
key themes identified across all papers reviewed.
Definitions and concepts relating to efficiency improvement
The concept of efficiency in the context of health services is
well-explored in the literature, with clear links to expenditure, health
system and health service outcomes. Productive efficiency involves
making the most of available resources while maximizing
outputs(1). Multiple factors contribute to the
efficiency landscape. Efficiency is comprised of technical and
allocative factors within the context of existing resources, operating
requirements, regulatory environments and health service
outputs(13,4). In healthcare these elements extend to
the delivery of services with comprehensiveness, coordination,
accessibility, quality and continuity all seen as determinants of health
services efficiency(15). In this context Pelone et
al.(15) further provided that quality involves health
service effectiveness, safety and appropriateness along with
patient-centeredness and patient experience. When considering processes
and outcomes, the concept of technical efficiency involves achieving
specified outputs using the minimum amount of
resources(16). The concept of value is also associated
with efficiency in terms of weighing outcomes against the costs required
to achieve them(17).
Central support and leadership for system-wide efficiency
improvement
The current public health services environment in developed countries is
consistently described in the literature in terms of increasing resource
pressure and system demand, creating an increasing focus on
sustainability across public health systems(18).
Specific and clear support for efficiency improvement initiatives from
the system management entities of public health systems is critical to
efficiency improvement success(19). Despite this
requirement, policy guidelines for enhancing public health service
efficiency are not readily evident despite widespread focus on measuring
efficiency(1). Across the literature, examples of
facility-level efficiency improvement projects are common however
studies focusing on efficiency improvement at the system-level are
rare(1). Variable levels of efficiency appear to be
evident within any given public health system between the different
services and facilities of that system(20).
The decentralized, department-based nature of healthcare facilities
within public health systems has been identified as a source of
inefficiency(21). This issue may be scalable to entire
public health systems with devolved governance structures. It is noted
than while reform can drive short term efficiency change, long-term
sustainability requires ongoing focus and
monitoring(22). Limiting the empowerment of individual
facilities to determine unique management and operating models in favour
of central control is not effective in improving efficiency, which
suggests that efficiency improvement can be supported through empowering
facilities to tailor operating models which best fit their unique local
needs while providing specific guidance on required
outcomes(3,23). This process requires consideration of
public health priorities, training, policy frameworks and business
models(24). Devolution of governance from central
bodies to health services can be managed through service agreements and
performance measures or indicators(25,26). Successful
performance against these metrics can be supported at the system level
by embedding a central focus on resource allocation in tandem with a
focus on optimizing care outcomes and resource utilization, with such an
approach also having the potential to avoid ethical dilemmas associated
with return on investment in the context of promoting health
outcomes(27).
In systems with fixed budgets, cost savings can be absorbed in other
areas of the system and therefore be masked in terms of overall
financial performance. This is further complicated by initiatives which
take several years to produce favorable impacts in systems with annual
financial cycles(28,29). Realistic timeframes for
efficiency improvement must be considered when weighing initial
investment and planned returns(28). Establishing
prompts, targets, guidelines, triggers and mandatory requirements for
resource allocation consideration has been linked with successfully
embedding efficiency improvement and disinvestment in routine systems
and processes(30). This can also be supported through
gaining an understanding of the points where efficiencies are
redistributed throughout the system(31). It has also
been suggested that focusing on productivity, savings, waste reduction
and resource maximization together when managing health services can
promote efficiency and quality outcomes
concurrently(32,33). Of these measures it has been
suggested that productivity is less frequently used than other
performance and operational efficiency measures, making productivity an
area where additional insight may be generated(34).
Elements of transparency in target-setting and performance reporting are
linked with more-efficient health organizations(35).
The setting of system-wide financial rules has been associated with a
modest reduction in public health expenditure, however this may not
occur until 1-2 years following implementation(36).
Local networking and benchmarking can promote collaboration identify
both high-performing and low-performing sites and is associated with
higher-performing health services(35,37). This
suggests that setting realistic timeframes for improvements to be
delivered and benefits realized while benchmarking to track performance
are evidence-based success factors in efficiency improvement performance
evaluation.
Peer benchmarking and comparison can also provide insight into new
potential opportunities for efficiency improvement by identifying
approaches which are achieving positive outcomes(38).
Successful initiatives can then potentially be scaled and shared to
similar settings elsewhere(39,40). This sharing of
successful initiatives promotes sustainability through increasing buy-in
and by building evidence of success(41). The ability
to adapt an initiative to suit local needs is a key long-term initiative
success factor and a factor which also includes the ability to modify
approaches over time(41).
Identifying high-performing sites and organizations provides
opportunities to identify and share factors associated with high
performance(42). Monitoring activity against set
targets and requirements can enable success to be championed and support
to be targeted as needed(43). Allin, Grignon &
Wang(1) suggest that peer benchmarking provides
opportunities to better allocate resources and take specific actions to
improve performance, as does identifying high-performing sites and
organizations in order to identify and share factors associated with
high performance.
Despite a focus on changes which improve efficiency the longevity of
these changes appears variable, with one study suggesting that only 60%
of improvement projects in health are able to maintain at least one key
project element on an ongoing basis(44). This calls
for a system-wide focus on embedding key elements of successful programs
upon project completion. Less-successful programs can also contribute to
efficiency improvement practices, as examining reasons for failed
programs can assist with supporting those at risk(45).
It is therefore recommended to identify the causes of efficiency
improvement failure and take action to ensure these causes are not
repeated in future efficiency improvement initiatives.
Sharing risks, goals, responsibilities and feedback across public health
systems can promote a sustainable win-win outcome for patients and
public health systems(46). Health systems can utilize
performance and activity data to detect opportunities for disinvestment,
track progress towards targets and evaluate the impact of
initiatives(47,48). Disinvestment and investment
should be considered in parallel rather than
separately(49). Transparent, accountable systems and
processes are required to coordinate these
factors(49). Improvements to services and processes
must align with and embed into existing structures in order to
last(41).
It is important for public health systems to identify and overcome
barriers to successfully promoting efficiency improvement. Performance
measurement processes are important, however delays in reporting back
from central bodies to local facilities it seen as a barrier to
improvement(41). A lack of business plans in proposed
efficiency improvement processes poses a risk to achieving desired
outcomes(50). Over-restructuring, focusing on
short-term goals, focusing on advances rather than results and a culture
of complacency were also identified as barriers to efficiency
improvement(51). Avoiding these pitfalls should be a
constant consideration at the system level.
Public health system management bodies can take a lead role in
identifying low-value and high-risk procedures then removing less
efficient choices, removing funding, producing policy
guidelines/regulatory frameworks for cost-effective alternatives and
raising the profile of correct/incorrect
interventions(52,43). The identification and
scaling-up of high-value initiatives is an area of opportunity in this
space(53). Evidence for cost savings in similar
initiatives in other health jurisdictions can be used to justify
investment decisions and develop business cases for efficiency
improvement initiatives(54). Centralizing and
consolidating services can enhance performance, as can centrally-set,
system-wide annual efficiency targets(55). Evidence is
mixed for extending this approach to public-private partnerships, which
have been described as complex, difficult to implement and dependant up
a range of pre-existing conditions to succeed(56,57).
Pay-for-quality schemes and mergers between public hospitals intended to
improve performance are similarly fraught with limited evidence for
efficiency and quality improvement(2,58).
Centralized efficiency improvement units such as Program Management
Offices can have an impact on improving efficiency across public health
systems by providing support and reducing pressure on health service
managers(59). The extent to which the support offered
by such units is adopted can be significantly dependent upon the
engagement and enthusiasm of senior leadership across their public
health system(4). The decision-making level of the
efficiency improvement unit has significant bearing on the efficiency
improvement focus and activities of the unit(1).
Program Management Offices in health care promote efficiency as they can
help solve operations issues, reduce spending, share expertise,
standardize practices/processes, build capability, provide regular
progress reporting, promote effective communication, assist various
stakeholder groups to deliver results, optimize processes, evaluate
impacts and align management approaches to client
satisfaction(59).
In order to realize the potential benefits offered by centralized
efficiency improvement units, challenges were identified which require
consideration. These include task prioritization, managing expectations
and managing multiple concurrent projects(59). The
manner in which the capabilities and system knowledge of these teams is
perceived by stakeholders impacted by efficiency improvement-related
change is a determinant of the degree to which improvement initiatives
are adopted across public health systems(4). This
suggests that appointing team members recognized for their experience,
credibility and familiarity with the public health system involved will
facilitate the team’s ability to deliver efficiency improvement support.
Establishing and managing realistic expectations as to the service
offerings of such teams across their stakeholders has also been
associated with the effectiveness of efficiency improvement
support(59).
Concurrently managing efficiency, service delivery and service
quality outcomes
An emerging focus on concurrently improving both quality and efficiency
is replacing the previous focus on purely financial efficiency, with
evidence suggesting that focusing solely on financial efficiency does
not result in health service efficiency
improvements(3). At a system level the factors
contributing to efficiency improvement include focusing on efficiency at
all facilities and organizational levels, addressing unwarranted
variation, considered use of funding levers, and monitoring appropriate
performance indicators(16). Public health systems have
a role in shaping policy to encourage services which promote both
efficiency and better stakeholder outcomes(60).
Underpinning any efficiency improvement initiative are concurrent
requirements to improve patient satisfaction, service quality and staff
engagement in addition to managing cost(60).
Gerald(61) suggests that this can be successfully
approached through setting policy levers which prioritize affordability,
access to care and innovation rather than targeting price or
utilization-based metrics as priority outcomes.
Efficiency improvement can be addressed in alignment with patient
outcomes and service quality, although inefficiency cannot be rectified
simply through additional resourcing(5). Efficiency
gains can be realized in combination between quality and patient
outcomes, with quality, cost and productivity regarded as interlinked
rather than isolated(39,62). Addressing health
services overuse and low-value activities is also linked to both
effectiveness and efficiency(63). While technological
solutions can potentially enhance efficiency across a broad range of
areas their potential is frequently overrated, with developing and
implementing such solutions being a driver of
cost(64,65). Importantly, health services cannot be
expected to operate at near-maximum efficiency levels as consideration
to reduced efficiency is a trade-off for workforce training capacity,
research and innovation(66). This calls for the
setting of realistic and balanced efficiency improvement targets and
timeframes. It has also been suggested that effective training in the
actions required to deliver efficiency improvement, consistent
leadership and continued post-implementation monitoring are required in
order for improvements in efficiency to be
maintained(4).
Stakeholder engagement
Underpinning any efficiency improvement initiative are concurrent
requirements to improve patient satisfaction, service quality and staff
engagement in addition to managing cost(60). Despite
the clear need to enhance efficiency, overcoming the challenges of staff
resistance and staff expectations can prove difficult. Common
misconceptions amongst staff and patients that ”more is better” and
”newer is better” are a significant barrier(63). There
is a risk for resource investment to be considered a waste if no value
is added to patient outcomes(46). To mitigate this
risk, the involvement of stakeholders in target-setting has been
associated with improved acceptance and compliance towards established
targets(67). Clear target definition and stakeholder
collaboration during improvement initiative development are factors for
improvement initiative success(68,69). Collaboration,
knowledge sharing, performance monitoring and continuous training in
performance improvement are associated with project sustainability and
impact(4). It was clear throughout the studies
reviewed that effective, ongoing consultation and collaboration is a
core element in efficiency improvement.
To counter stakeholder engagement challenges, public health systems can
focus on enhancing collaboration and engagement to promote efficiency
improvement(46). Stakeholders are unlikely to be
motivated to engage in efficiency improvement solely because of
cost-effectiveness(70). Local management priorities
can be aligned across the system by linking unit manager goals, measures
and incentives to those of the Organization, thereby promoting
efficiencies at a system level and moving away from isolated pockets of
improvement(71). Central bodies can sponsor
collaborative networks to share successful practice and performance
information, with links to improved patient outcomes and costs while
also linking researchers with implementers and
beneficiaries(72). Consideration towards the issues of
data security and systems interoperability is required when planning
technological solutions to support collaboration, information sharing
and performance management(73). Although change
management approaches were not the focus of this review, the evidence
identified in this study consistently indicated that effective change
management is required in any efficiency improvement initiative.