7/10/2010 - Secretary-General, Angel Gurría, outlines the key issues discussed by Health
 ministers and 
officials from some 35 countries who met at the OECD this week.

"With austerity the order of the day in most OECD countries, the public is understandably 
anxious that budget  cuts do as little harm as possible to the services they depend on. 
Few sectors capture  the dilemmas this poses for policymakers quite like healthcare.

Progress in healthcare by OECD countries over the past 50 years has been nothing 
short of remarkable. Life expectancy, for example, has increased by 10 years since 
1960. People born today can expect to march on with vigour to their 80th year.
 But living longer comes at a price. There has already been considerable 
debate about how to fund future pensions; the questions healthcare raises must
 be given similar attention.

Although this crisis should not be allowed to erode our hard-won achievements, 
nor diminish people’s attachment to the availability of good healthcare,
 it does provide us with an opportunity to take a good hard look at what changes
 are required in order to get the best value for the resources we spend on healthcare.

Before the crisis, health spending on a per capita basis was rising some two to
 three times faster than the rest of the economy. In the past 10 years, health 
expenditures in the OECD have increased by 50% in real terms. In seven OECD
 countries they account for more than 10% of the economy.

Health systems, from running hospitals to paying for treatments, make up 
a significant proportion of public budgets, and they will inevitably take a greater 
share of public–and household–budgets in the future, as 
people will understandably demand more and better care, not less.

What areas of action should policymakers focus on to make health more 
affordable and effective in addressing present and future challenges?

The clear lesson emerging from our work at the OECD is that value for money
 in healthcare can be improved, though a key challenge is to marshal the 
pressures that drive costs today. These include ageing-related demands and
 treatments, and costly technology in areas such as pharmaceutics (chart 4) and
diagnostics.

There are modern conditions, too, which are pushing up healthcare costs, 
such as those caused by obesity. And there are the structure and organisation
 of the health systems themselves, which may require timely reforms.

Some policy remedies to tackle costs, such as encouraging wider use of
generic drugs instead of more expensive branded ones, or improving access 
to basic care and outpatient services to reduce pressure on hospitals, 
may be relatively straightforward to enact.

Other measures, from reforming cost structures and reorganising management,
to equipping and better applying information technology, may be more complex. 
Strategies may be needed to build better coherence and knowledge-sharing 
across often-fragmented health departments, in order to reduce delays, avoid 
duplication and reduce risks to patients.

But two fronts stand out which, if tackled, would bear near-certain fruit. 
First, quality could be improved: evidence shows that better services lead to 
shorter treatments and healthier outcomes. Policy should shift the emphasis from 
volume to quality, by realigning pay incentives for hospitals, doctors and nurses, 
for instance. Better quality can also save money by avoiding unnecessary 
procedures, not to mention some costly mistakes (chart 1). The Institute of Medicine
 in the US once estimated that medical error kills more people than traffic accidents.*

Secondly, greater emphasis must be placed on prevention. Obesity provides a 
good example. In 1980, one  person in ten was obese across the OECD. 
Today, in half of the OECD countries, every second person is obese or overweight.
Some developing countries also have to grapple with this challenge, adding to their 
already considerable health woes. The result has been a sharp rise in chronic 
conditions that are costly to treat, from cardiac disease and stroke to diabetes 
and some cancers. In fact, obesity reduces life expectancy  as much as smoking does.

New technologies and drugs can help, but these cost money without properly
tackling the root of the problem. Only prevention can effectively treat some of the 
causes, such as poor diet and inadequate exercise. Urgent action is needed. 
Parallels can be drawn with the economic crisis, which we continue to pay for dearly 
because of our collective failure to identify and deal with the causes. Obesity is a 
warning sign, and we cannot claim ignorance.

Last but not least, policymakers should resist cutting spending on prevention. 
It may take years for prevention programmes to show results, but as with 
anti-smoking campaigns, they are cost-effective and produce results thanks to 
healthier lifestyles.

Although the economic crisis puts policymakers under great pressure, 
safeguarding and improving healthcare is vital for long-term growth. 
With the right approaches, we can produce improvements and 
savings as well. The public, as well as Hippocrates, would approve."

*Kohn, L. and M. Donaldson (2000), To Err is Human: Building a 
Safer Health System, Institute of Medicine.

© OECD Observer No 281 October 2010


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