ABSTRACT
The health sector accounts for a significant portion of gross domestic product (GDP) around the globe, particularly in developed countries. According to the Organization for Economic Cooperation and Development (OECD)’s Health Statistics (2015), the U.S. spent 16.4% of its GDP in 2013 (excluding capital expenditure) in the healthcare sector, while the spending average of the thirty-four OECD countries in the same sector was 8.9%. This has remained unchanged since 2009 as health-spending growth matched economic growth. OECD estimates the per capita health spending in the U.S. was $8,713 in 2013. In Canada, where the per capita health spending is about half of that of the United States’, hospitals account for 30% of the overall costs. Hospitals are then followed by drugs and physicians, each with about a 15% share (Canadian Institute for Health Information (CIHI 2015). As a result of hospital consolidation and bed closures as well as sustained transition from inpatient to outpatient care, there has been a significant reduction in hospital spending since the ’90s—now stabilized at its current level. This suggests that there may not be any more “low-hanging fruit” for further cutting hospital costs via macro-level policies. Although continued efforts at the governmental level for improving the health sector are still necessary, they are not sufficient for achieving tangible success on the ground. To increase the efficiency of care delivery processes and the quality of care, healthcare providers and decision makers must implement health policies through concerted and sustained efforts at the operational level. Healthcare processes are dynamic and complex systems. Their design and improvement often involve pushing the frontiers of research in engineering and management.
