Waste in Healthcare: The Silent Cost Affecting Health Systems

2026

Waste in Healthcare: The Silent Cost Affecting Health Systems

Waste in healthcare is one of the sector’s biggest financial problems and, according to the OECD, can represent between 10% and 34% of total expenditure. Unlike clinical errors or overcrowded emergency rooms, this waste is silent, invisible, and deeply structural.

In previous articles (Operations Management in Healthcare, Time Management in Healthcare) we discussed how operations management has become a forgotten aspect of the healthcare sector. In this article, I intend to provide numbers to support this reflection. Because when waste has no name or value, it’s easy to ignore it.

There is a form of  waste in healthcare  that doesn’t stand out. It doesn’t have the drama of a medical error or the visibility of a collapsing emergency room. It’s a silent waste, linked to inefficient processes and operational management failures in healthcare, that happens daily within every healthcare organization, costs millions to healthcare systems, and is not a problem unique to Portugal!

The OECD published a report with a self-explanatory title: Tackling Wasteful Spending on Health .

The conclusion is unsettling: waste in healthcare can represent between 10% and 34% of all expenditure in member countries. We are not talking about fraud or obvious mismanagement. We are talking about processes that don’t work, resources that are misallocated, care provided in the wrong place, in the wrong way, to the wrong person.

OECD countries spend an average of 9% of their GDP on healthcare, with governments covering three-quarters of that amount. A significant portion of this money is not generating value. And unlike other sectors, this type of waste is rarely measured. I leave the question to the reader of this article… What is the level of waste and  organizational inefficiency  in your organization or service?

Waste in the Operating Room: Data and Real Impact

The operating room is one of the most expensive resources and simultaneously one of the biggest sources of  waste in healthcare . High-precision equipment, specialized teams, and complex infrastructure make any inefficiency especially costly.

And how is it managed?

The operating room, being one of the most expensive resources in any hospital, is also one of the most poorly managed. According to a review published in the Journal of Orthopedic Experience & Innovation (Cholewa et al., 2024) , the cancellation rate for elective surgeries ranges from 10% to 40% depending on the size and type of hospital, with between 20% and 78% of these cancellations originating directly from poor organization of surgical schedules and not from clinical causes. Scheduling errors, lack of coordination between services, and late or incomplete information are all contributing factors. The same study indicates that up to a third of operating room hours may be underutilized, resulting in a systematic waste of a high-cost resource.

This underutilization reveals a classic problem of  hospital inefficiency  and operational waste — exactly the type of flaw that methodologies like  Lean Healthcare  seek to eliminate.

An idle operating room isn’t just a postponed surgery. It’s specialized personnel on standby, depreciated equipment not being used, and a patient on a waiting list who could have been operated on. The true cost rarely appears in a report. It’s spread throughout the system and becomes invisible.

Wasted Time by Healthcare Professionals: The Invisible Problem

There is another critical form of waste in healthcare: the time healthcare professionals spend on administrative tasks that do not generate value. This inefficiency reduces hospital productivity, increases costs, and compromises access to care.

Bureaucracy, redundant documentation, systems that don’t communicate with each other: all signs of inefficient clinical processes and failures in hospital management.

In the US, this problem is quantified: each doctor spends the equivalent of $68,000 a year just dealing with administrative processes. In Europe, including Portugal, the phenomenon is no different in nature, only less measured, which makes it even more difficult to combat.

In Portugal, the National Health Service (SNS) faces similar pressures. The group of criteria with the worst performance in Portuguese public hospitals is precisely that of efficiency and productivity, suggesting a waste of resources. It’s not a lack of clinical competence. It’s a lack of attention to the processes that support that competence.

Could this be one of the reasons why investment in healthcare and technology continues to increase, while performance does not improve in proportion to this growth?

Because Waste in Healthcare is Hard to See and Hard to Solve

Financial waste  in healthcare  is difficult to combat precisely because it is invisible and rarely measured. Without hospital productivity metrics and without systematic process evaluation, inefficiency perpetuates itself.

In a factory, a stopped production line is immediately visible. The cost is measurable per minute. In healthcare, the same phenomenon occurs: an underutilized critical resource, a poorly designed process, a task performed twice, all become diluted across departments, shifts, and cost centers. No one is held responsible. And therefore, no one solves it.

Countries could spend significantly less on healthcare without any impact on system performance or health outcomes. This is not an opinion, but the conclusion of an OECD systematic review. The money is there. The problem lies in how it is used.

Waste that goes unmeasured, whether it’s clinical waste, financial waste, or  inefficiency in healthcare processes , cannot be eliminated. And what isn’t measured cannot be improved!

The first step is to accept that a large part of the financial problem in healthcare is not in the prices of medicines, nor in the aging population. A large part of the financial problem in healthcare results from how resources are used. Improving the  management of healthcare operations is essential to reducing waste and increasing value for the patient.

If you want to know how to measure waste in your organization and start the Lean transformation, subscribe to our newsletter or contact us at lean@leahealth.education

In the next article: why buying technology without changing processes not only doesn’t solve the problem, but often makes it worse.