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overspending. The second type includes services that are very cost effective for some patients but not for others. Many diagnostic services and some treatments would fall in this group. The third category includes high-cost services whose clinical effectiveness is unknown. This last group calls for careful design of benefit packages and potentially the establishment of institutions to undertake comparative effectiveness research (of which a particularly well-known example is the United Kingdom’s National Institute for Health and Clinical Excellence). The second category—those with heterogeneous benefits—poses a particularly challenging case for improving efficiency. Take the example of stents, or small mesh tubes that help treat coronary artery blockages in those with heart disease. Some patients benefit enormously from this technology, and indeed stents are credited with making an important contribution to the decline of cardiovascular disease mortality in recent years. But many people with heart problems do not need stents—either because their condition is not serious enough or because it is too advanced and thus more aggressive procedures are required. To add another layer of complexity, stents may or may not be drug eluting, which are helpful in some but not all cases and are certainly more expensive. Improving efficiency requires a systemwide mechanism to help figure out who will benefit from stents and who will not. There is an important role for strengthening information flows and analytical capacity to address this dimension of the efficiency agenda. Monitoring the volume of services and outcomes at the provider level can shed light on which corners of the health system are generating the most waste. For example, figure 5.5 shows the regional variation in hospitalizations for pneumonia in Bulgaria. This is a condition that should generally be handled either at primary care or on an ambulatory basis at hospital. Most regions are well above the OECD average, indicating a nationwide problem, but significant gains could be made just by targeting the worst offenders (where discharges are nearly 10 times the OECD rate). In many cases, unnecessary care may not reflect deliberate rent seeking by providers but instead arises because in the absence of clear evidence—there is a substantial “gray area” in the practice of medicine—clinical decision making may be driven by individual or community behavioral norms (“that’s how it’s always done”). Information feedback can help change this reality. This issue is discussed further in chapter 6.
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