A spate of papers has been released in recent months issuing dire predictions for Canada’s healthcare system.
As a percentage of GDP, our system is already one of the costliest systems in the world and, according the C.D.Howe, the cost will climb much higher in the next 20 years. And I have no reason to doubt it. Part of the reason is an ever-greater level of costly interventions and the other is an aging population. We can’t do much about aging but we can do something about interventions.
The proposed solutions I tend to hear concerning our healthcare troubles seem to fall into two camps. The first is that good healthcare is costly so we need to be prepared to spend more in the future for quality care. The other is that the reason the cost is so high is that consumers are not price sensitive, so we need to put the breaks on demand by imposing user fees of some sort.
Both of these outcomes sound right but the true story is more complex than that. A careful review of the Organisation for Economic Co-operation and Development (OECD) health statistics coupled with a heavy dose of research papers from various countries point to other problems with Canada’s healthcare system, problems we tend not to talk about much.
What’s our ROI?
First and foremost, given our sizeable expenditure on health, why don’t we have more to show for it? After adjusting for differences in demographics, the U.S. is the only country in the world paying more for healthcare than us. Yet, we have fewer doctors and nurses per 1,000 of population than most other developed countries, rank third quartile in the number of acute care hospital beds per 1,000 of population (behind Greece, Slovenia and Portugal among others), rank 17th out of 26 OECD countries in the number of CT scanners per million and have fewer MRI machines per million than most OECD countries—including even Turkey.
That goes a long way to explain why the length of time from a referral by a family physician to final specialist treatment has nearly doubled since 1993. What it doesn’t do is explain where the money is being spent if not on doctors or equipment! Taxpayers should expect a better accounting of their healthcare dollars.
Part of the problem is that a national healthcare system is more of a religion than it is a business. This has been said to be true of National Health Services in the U.K. and is certainly true in the U.S. and Canada. As with any religion, one doesn’t always scrutinize its basic tenets too closely or rely solely on rational judgment. If we can’t articulate the purpose of our healthcare system, how can we expect to measure its performance? Is the ultimate purpose of healthcare to make sick people well, which implies a focus on acute care, or to maximize the number of people who are well, which implies more emphasis on prevention? Is it to strive for longer healthy life spans or to prolong any life at any cost?
I suggest we take our cue from the World Health Organization and define a healthcare system as something that has a primary purpose to promote, restore or maintain health. If we agree on that, the first observation is that our own system dwells too much on restoring health and too little on promoting and maintaining it in the first place.
The OECD statistics show very little correlation between how much a country spends on healthcare and on the overall health of its citizens. On the other hand, there is very high correlation between obesity and life expectancy; the higher the rate of obesity in a developed nation the lower the life expectancy of its people. This one factor alone explains why the Japanese can expect to live until past 82 while the Americans live only until 78, even though the U.S. spends nearly twice as much per capita on healthcare.
An estimate from the National Health System in the U.K. is that as many as 70% of hospital stays in that region stem from problems linked to lifestyle. In other words, they didn’t have to happen in the first place. Doesn’t that suggest we should spend more on preventative measures and less on further bolstering our acute care facilities?
The bottom line is that we don’t need to increase real spending on healthcare; we need to spend our money more wisely where it can have the greatest effect.
Peter Gorham:
“as many as 70% of hospital stays in that region stem from problems linked to lifestyle.”
So one part of the solution is obvious. User fees that increase in line with a person’s weight.
Thursday, May 05 at 2:23 pm |
Jeremy Perry:
Rather than user fees in line with a persons weight (which seems to be a bit too discriminatory), I see a better solution being an increase in taxation that correlate with expected health outcomes, such as we currently have on tobacco. I picture it as something along the lines of a junk food tax. This will provide monetary incentives for healthier lifestyle decisions while providing a revenue stream to cover the increasing cost of health care.
Thursday, May 05 at 3:12 pm |
Scott Warner:
Actually the bottom line is – our universal public system will only survive if we introduce a private system too. Until we do everything is just fidgeting at the edges. As for user fees based on weight? … sure and while we are at it let’s base taxes on IQ…
Thursday, May 05 at 2:58 pm |
Chris Adams:
Your analysis is succinctly put Fred and has been voiced before by others, however I believe the real question is “Why are we spending most of our dollars on treatment instead of prevention?” Could it be that the powers that control the spending of our tax dollars on health care are influenced more by the strong drug companies, hospitals and treatment manufactures rather than those involved in the prevention industry?
Will we ever reach the stage where our Federal or Provincial governments financially encourage the general public to take care of themselves by living a healthy life style? Can we ever anticipate tax credits for gym memberships, sports equipment, approved healthy food purchases, etc. rather than prescription receipts?
Thursday, May 05 at 5:15 pm |
Patrick Hardie:
I’m not sure what the right answer is. I find it interesting that the author brings up life expectancy and rates of obesity. Speaking bluntly, once a person passes away, they are no longer a burden on the health care system. I wouldn’t think life expectancy a good metric to use in measuring health care costs. Again bluntly, from a strictly health care cost containment perspective, the lower life expectency, the better. (I obviously don’t advocate this point of view.)
Cancer incidence, diabetes, rates of different heart disease could be better metrics that do have a far more measurable burden on healthcare.
Speaking to the author’s first point about Canada’s health care costs being the one of the highest as a percentage of GDP cannot be solved by privatization. GDP measures all products produced in an economy, both public and private. If the American experience is any indication, privatizing health care will drive costs up in terms of as a percentage of GDP and ultimately the final consumer. There are negative externalities associated with privatizing healthcare that drive costs up expressed in terms as a percentage of total GDP. (I should mention that I’m not for or against privatizing health care.)
The problem is one of efficiency when viewing the total economy. What level of health care do we want, and what other goods or services in the economy do we want to forgo in order to produce that level of health care?
This is why the healthcare problem is so puzzling and outcomes that intuitively make sense in reality do not work.
Thursday, May 05 at 5:22 pm |
Delma Williamson:
User fees based on weight? Well I do understand the thought behind that, however, it could be seen as discriminatory and who would set the standard. Different nationalities tend to mean different weights. IF we are going to start talking about user fees associated with personal health choices, probably the first one would be smoker vs non smoker I would think.
Friday, May 06 at 3:28 pm |