kinds of face-to-face encounters are required for patients to receive the help or interaction they require. Health systems must develop multiple ways of responding to patients’ needs beyond patient visits, including the use of the Internet. Reducing waiting time does not have to increase expense. Experience has shown repeatedly that in many areas, improving access reduces costs in health care (Barry-Walker, 2000; Cohn et al., 1997; Fuss et al., 1998; Stewart et al., 1997; Tidikis and Strasen, 1994; Tunick et al., 1997) and in other industries (Heskett et al., 1997). Promising work in health care has begun to result in reduced delays by decreasing cycle time and by applying lessons from other industries on continuous rather than batch production (Nolan et al., 1996). These approaches are described further in Chapter 7.


In an efficient health care system, resources are used to get the best value for the money spent (Palmer and Torgerson, 1999). The opposite of efficiency is waste, the use of resources without benefit to the patients a system is intended to help. There are at least two ways to improve efficiency: (1) reduce quality waste, and (2) reduce administrative or production costs.

Not all but many types of quality improvements result in lower resource use. This is true for improvements in effectiveness that result from reductions in overuse. It is also true for most improvements in safety, which result in fewer injuries. Quality waste from both overuse (see Appendix A) and errors (Institute of Medicine, 2000b) is abundant in health care and contributes to excess costs.

Some researchers have attempted to quantify administrative costs that constitute waste (Woolhandler and Himmelstein, 1997; Woolhandler et al., 1993). Others have identified waste in the work of smaller health care units and sought systematically to reduce such waste through a variety of strategies, including eliminating processes that are not useful (such as tests), multiple entries (such as clerical reentry of physicians’ prescriptions and laboratory orders), classifications that add complexity without adding value (such as types of appointments and job classifications), and layers of control (such as approvals and sign-offs). Waste can also be reduced by recycling and appropriate reuse of resources (such as data and water) and by wise substitutions (Kain et al., 1999; Klein et al., 2000; Langley et al., 1996; Luck and Peabody, 2000; Poplin, 2000; Skillman et al., 2000; Walczak, 2000; Zairi et al., 1999). Other approaches rely on matching supply to demand and using sampling for measurement instead of measuring 100 percent of events. Several of these approaches are described in greater detail in Chapter 7.

Because of the high levels of waste in the current system, the committee sees no immediate conflict in the simultaneous pursuit of lower costs through efficiency and better patient experiences through safety, effectiveness, patient-

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