• Brendan Shaw

When resilience trumps efficiency in healthcare

“Global capitalism will have to be re-balanced. The pre-COVID balance between efficiency and resilience will have to tilt on the side of resilience.”

- Pascal Lamy, former Director General of the World Trade Organization, 2020

“… the notions of viability and resilience … are in conflict with short-term profitability and apparent efficiency.”

- Hynes et al., 2020, A Systemic Approach to Dealing with COVID-19 and Future Shocks, OECD.

“We should have learned the lesson of resilience from the 2008 financial crisis. We had created an interconnected financial system that seemed efficient and was perhaps good at absorbing small shocks, but it was systemically fragile. … The economic system we construct after this pandemic will have to be less short sighted, more resilient, and more sensitive to the fact that economic globalisation has far outpaced political globalisation.”

- Joseph E. Stiglitz, Nobel Prize-winning economist, 2020

In the aftermath of COVID-19, the international policy community is starting to debate society’s over-emphasis on efficiency at the expense of resilience.

Whether it is looking at supply chain integrity, the stability of our transport links or the fragility of our financial systems, economists are debating whether we have got the balance right.

Theories of complex systems and how they react to extreme events or shocks has been evolving for some time in various disciplines as diverse as management, economics, politics, climate science, psychology and history.

The current discussions are occurring in the context of the emerging debate about whether our economic systems have sufficient structural integrity, strength, and resilience to cope with sudden substantial shocks in the aftermath of the COVID-19 outbreak.

The same discussion needs to happen in healthcare. Urgently.

Re-balancing towards resilience in health systems

For decades, an overwhelming focus in healthcare and health policy has been on efficiency, running health systems close to the margin with little built-in excess capacity or redundancy to cope with major health shocks.

Whether it is hospitals in Japan turning away COVID-19 patients, the UK’s National Health Service effectively running out of personal protective equipment for frontline health workers, or hospitals across the US ‘running on fumes’ due to lack of money, health systems around the world have shown that they are quite fragile and prone to failure when shocks like COVID-19 happen.

And while this phenomenon might seem relatively new to high-income countries, for low-income countries with limited resources for healthcare the situation of a sudden shock or crisis triggering a collapse in the health system, be it war or famine or a major disease outbreak, is all too common.

One of the major reasons governments around the world have sought to ‘flatten the curve’ of COVID-19 cases is to take pressure off their health systems.

ICU wards in China, Italy, Spain, the UK, and the US have been overwhelmed. A sure sign that health systems around the world have not been able to cope.

And there are increasing concerns in various countries about the impact of COVID-19 on fragile health systems having to delay or put off delivering the normal health services for all the other of society’s day-to-day health needs like vaccination, cancer treatment, and emergency medical care.

The OECD has said that there are three ways countries can improve health system resources: raise more money for health, improve the efficiency of spending, or reassess the boundaries between public and private spending.

But, a bit like we did with our economic and financial systems, the COVID-19 outbreak has dramatically demonstrated that we need to look at the strength and resilience of our health systems and their ability to deal with shocks.

There needs to be a re-balancing of our health systems away from efficiency and towards resilience.

Different experiences

Different countries have had different experiences during the COVID-19 outbreak.

In Europe, the UK, Italy, France, and Spain have struggled to cope. We have seen horribly large numbers of deaths, pictures of tragic scenes in hospitals and each country vying for the dubious distinction of having the highest death toll.

Meanwhile, other European countries just next door like Germany have had a much lower death rate and seemed to have coped much better.

This could be due to a range of factors including readiness to adopt new technology, a rapid adoption of testing and tracking practices with COVID-19 cases, high investment levels and decentralised yet coordinated health systems.

The confounding experience of the United States with its own decentralised yet uncoordinated systems presents a contrasting story, and suggests that a lack of coordination, preparation and resilience in health systems is the explanation.

Once the dust settles on the COVID-19 outbreak, it will be important to look closer at the reasons why different countries – some of them neighbouring each other – went through quite different experiences.

Source: Global Change Data Lab, Our World in Data, "Coronavirus Pandemic COVID-19", Oxford Martin School, University of Oxford,, accessed 11/5/2020.

A focus on efficiency over resilience in health care

Over the last few decades, the global health sector has focussed on squeezing out every last bit of efficiency from health systems.

A whole industry of health technology assessment has emerged, predicated on the need to determine the most efficient use of limited health resources and strive for efficiency in healthcare at all costs.

Health bureaucrats, academics and payers have embraced it as a discipline, a way of life almost, looking at every new health technology or process at the margin to push out the efficiency frontier even further.

We have had league tables developed to show what health interventions, technologies and processes produce the most efficient way to increase quality adjusted life years (QALYs) for a given budget level.

In many countries this has led to fragile health systems that are run just on the edge of oblivion, teetering on the edge of the efficiency frontier due to an excessive focus on cost-containment with little room to cope when a sudden shock hits the health system.

Make no mistake, efficiency in healthcare is important and should be pursued. It is a key ingredient to running a good health system. There are various examples worldwide of health systems which could do with a good dose of efficiency.

But efficiency is but one ingredient to creating a successful health system and it is not an end in itself. It is a means to an end, not an end in itself.

Like in the now emerging debates about our economic systems, in healthcare we should realise that we have focussed too much on efficiency and not enough on strength and resilience.

We should start asking questions like:

  • What does ‘fragility’ and ‘resilience’ in a health system look like?

  • Does the collapse in health systems we have just witnessed in various countries during the COVID-19 outbreak look like resilience?

  • What excess capacity do our health systems have to cope with shocks?

  • Is our level of investment in healthcare sufficient for the 21st century?

  • Should we build in such excess capacity in our health systems in the same way our defence systems have built in redundancy and excess capacity?

Just by way of example, the world has been spending more than US$1.5 trillion on the F35 Joint Strike Fighter since the beginning of this century to build a major new weapon of war that, if we do things right, we will never have to use.

We hope that attack fighter bombers like the F35 will never actually be used.

But that does not stop us investing in the technology, systems, production capacity, maintenance services and training the pilots and technicians to develop these planes and keep them flying.

Perhaps we should adopt similar thinking in the context of our health systems. COVID-19 has shown that we clearly have not been to date.

Going forward

Like the debate now occurring about our economic, financial and supply chain systems, we need to have a debate about the strength and resilience of our health systems.

We need to re-balance our health systems away from efficiency and towards resilience.

And we need to pivot the debate away from cost-containment and putting our health systems in a fragile state in the race for efficiency and, instead, focus a lot more on building the strength, depth and capacity of our health systems to deal with shocks.

We owe it to future generations.

#health #SDGs #resilience #finance #economics #politics #COVID-19

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