Health care waste

In August 2010  Auditor General Sheila Fraser told the Canadian Medical Association, Canadians have no way of judging whether the health-care system is providing good value for their tax dollars because of a lack of solid information to assess its performance. Our family’s experience hasn’t been impressive. Patients have suffered needlessly and the system has run up massive bills because of misguided parsimony. Things that may look good on flow charts don’t work in the real world when living, breathing people are involved, yet the administrators cling to their comfortable kingdoms.

In October, 2010, Ontario’s Auditor General pointed to how comfortable those kingdoms are. He said many of that province’s hospitals abused the use of consultants and expense accounts, and issued sole-source contracts without considering lower bids. He cited a hospital consultant earning $275,000 a year whose expenses included a $7,000 Christmas lunch, foreign exchange fees, a “salary bonus”, a $500 telephone call and $3,500 for a hotel stay in Singapore.

To further illustrate how health care executives take care of their own, the Auditor General pointed to a person hired as a $240,000-a-year consultant by the very hospital that person retired from one month before. This was a $100,000 raise over this individual’s previous salary.

Lest you think these are one-offs, Ontario’s Health Care industry in two years spent $223.7 million dollars on consultants!

Given the poor ratings of health care administrators by think tanks, business magazines and others in know, Canadians should think twice about opening their wallets any wider until health care organizations have cleaned up their act.

In November 2010 in Nova Scotia a debate began over health care foundations having access to patient addresses for the purposes of fundraising. The government said no (they have privacy concerns). I think hospitals and the health care authorities which oversee them have to go back and tighten up their operations before they ask the public for any more money. If we simply continue in the habit of giving more money to these people then there is no impetus for change. Our largesse merely encourages imprudent behaviour.

As I mentioned on the front page of this site, our family spent nine months in our local hospital. I used to be a newspaper general manager, managing editor and publisher, I’ve also written two business books and contributed articles to several business magazines. So I understand management theory and the practical challenges of operating a business on a day-to-day basis. I am not suggesting that hospitals become a business, and I think it’s silly to expect government to act like a business. They’re not businesses. But that doesn’t mean they can’t adopt some basic business practices to cut their overheads and be more fiscally prudent.

* The biggest waste I see in my local authority is the duplication. The administration, which is dripping in vice presidents, has corporate offices in a bunker-like building in the town industrial park. Most, if not all, of the administrators also have offices in the hospital, five kilometers away. Why? And since they are responsible for other facilities, do they have more offices in those?

The corporate bunker has vast unused spaces. Why pay for the lease on a second set of offices when you claim to need money for other things? And does the public purse pay travel or provide a car allowance so these people can travel between their offices in the same town?

In addition to having secondary offices in the actual hospital, they have two classrooms and a private dining room, so if they needed meeting space it’s there. Yet my niece and I had a meeting with two hospital staff in a closet! Hospital support staff tell me at least five doctors have duplicate offices in this same hospital. I golf. I’m not a long hitter, but our hospital building is about the length of my drive, so it’s not big enough to justify all this duplication.

* Speaking of duplication, I recently paid for an ambulance. It was a same-day return trip of about four kilometers each way. There was no emergency that required an ambulance with two paramedics, but it was convenient. Our community is fortunate to have a ParaTransit service. The ambulance round-trip cost $268. ParaTransit charges $13 for the same trip. We are wasting resources by using ambulances as a glorified taxi service.

* The ambulance service’s weakness is in their business practices. For this same day, round trip service, I received two invoices. One for each way. Each invoice was separate from the other, sent in a separate envelope. So that’s two accounting entries, two invoice forms, two envelopes, and twice the postage. And when I paid the invoices I got two receipts sent in two envelopes. How many times a day are ambulances used in Nova Scotia? How many invoices does the system send out? How much duplication are we paying for? This is a fast, simple cut to administrative overhead that wouldn’t cause pain to anyone. Where is the common sense? I bet health care executives are scoffing at this penny pinching, but as any business person knows, the small stuff adds up.

* Then there’s the false economy. Anyone in business knows that the cheapest price isn’t necessarily the best buy. At our hospital, I commented to a nurse that I’d like to have the concession to supply rubber gloves, given how many they go through in a day. The RN replied, “No you wouldn’t. We’re constantly changing suppliers. As soon as the price goes up a penny, they switch to a new company.”

The problem with the cheaper price is the cheaper quality glove. Nurses complain they have to take a handful of gloves each time they reach for them because these gloves rip so easily. It was nothing to see a nurse go through three-, four- or five gloves before finding one her fingers didn’t pierce. Cheaper doesn’t guarantee a bargain.

For nine months this was the view our family member enjoyed from her hospital bed. The window is in the MRI department - eight times we were denied an MRI.

* In Nova Scotia, we use MRIs 15 percent below the national average. I wonder if this is another example of false economy? We had asked for an MRI within the first month of our family member’s hospitalization and told it wouldn’t show what was wrong. That seemed a rigid position since the doctors were guessing at the problem. After six-and-a-half months of hospitalization, when the doctors finally did an investigation and found the problem it turned out to be something an MRI would have shown. The patient could have been treated and out of hospital in two months instead of the nine we were there. In addition to the impact on our family, this refusal cost the system tens, if not hundreds, of thousands of dollars.

* One day the ceiling in the patient’s room was covered in dust that had come through the ventilation system. Cleaners and nurses

The mystery material - mold perhaps? - which suddenly appeared on a patient's hospital room ceiling. Staff were told not to guess at what it might be.

thought it might be mold, but were told not to say that since the hospital didn’t have the money to treat mold. Nice. So what’s the long term cost of that?

  • Another area of waste are the perfectly good prescription medications we so freely throw away. Some people have suggested handing left over prescriptions to those who are on the same drugs. I’m not talking about that. I’m talking about prescriptions specifically written for the patient. The prescription is filled by the hospital pharmacy. When that patient moves from a hospital to nursing home, the hospital either throws the drugs away or gives them to the patient. However, at the nursing home those drugs are disposed of because regulations or rules prevent them from using prescriptions not filled by their pharmacist. Given how many elderly citizens move from a hospital to a nursing home, this seems a stunning waste of prescriptions and money – usually tax payer money. I don’t know if the same regime holds for when a patient is transferred between hospitals. It seems an idiotic practice.
  • An additional area for cost cutting is the elimination of double dipping. Salaried people do what’s expected or asked of them by their employer. Salaried people don’t get extra pay for covering for a co-worker who may be away or ill, or staying late in the office or taking work home or for traveling for work. However, in our health care system, some salaried people are able to earn extra pay for covering for colleagues. I’m thinking of the medical administrator who puts in an occasional weekend as the duty doctor for the facility he/she oversees then bills the health care system for seeing those hospital patients. Is this fair to a system under economic stress? Shouldn’t the board hiring a person for such a position lay out terms that exclude this? And if they don’t, shouldn’t the Minister of Health see that this loophole is closed?
  • One patient's drugs to be thrown out because they can't go from a hospital to nursing home ten minute's away.

These are just my observations into some of the operations which don’t make fiscal sense. What other ways could we cut administrative costs? I bet those working in the system have lots of insights into that. Send them along.

5 Responses to Health care waste

  1. holly on pei says:

    very enlightening and very scary.I will be following this one Allan

  2. Peter Ryan, Halifax says:

    I would like to see a comprehensive investigative reporting job of the management of our healthcare system conducted by the Chronicle Herald. Ideally this would be covered on the front pages of several issues over a period of time. The waste in our healthcare system is a disgrace. I know of some of this waste first hand and am sure it is only the tip of the iceberg. Our healthcare system is not underfunded; it is “overspent”. The management of the system is not accountable and public scrutiny is practically non-existant. If the Government does not do something about how our system is managed, we will surely end up going “American”, and that would be a travesty.

  3. Edd Twohig says:

    I was interested while waiting in the hospital to see 3 wheelchairs being used to transport patients within the hospital. These chairs were top quality self-operated chairs, that I would estimate cost $1,800.00, being used where transportation chairs costing $300.00 would be more satisfactory for that use.

    Who is at fault for this waste of money? A wasteful purchasing agent, a department head specifying the item instead of the need, or more management that does not manage their employees?

    I had just done research of wheelchairs to select a transportation chair for a friend, and wondered how the presumed professionals could have ordered the wrong kind. It was like buying a 5 ton truck when a pickup would do.

  4. Pingback: How did we get into this mess? | helphealthcare

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