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A version of this commentary appeared in the Hill Times, Calgary Herald and the Halifax Chronicle Herald

There have been a number of Canadian reports recently which paint a gloomy picture of the future sustainability of the Canadian health care system. The reports all go something like this: health costs are inexorably rising and caring for a growing elderly population may eventually bankrupt our health care system.

We clearly have choices to make.  Past choices got us into our current predicament. But better choices, more sophisticated analyses, and political will, can also get us out of it.

In order to progress, we need to revisit and challenge strongly held but erroneous assumptions about the Canadian health system. Contrary to current beliefs, the growing percentage of provincial budgets consumed by health care is not a reflection of a national health care crisis.

You may be surprised to learn that there have only been modest increases in the percentage of GDP consumed by health care in Canada (a move from 10.0% in 1992 to 10.5% in 2007, before the 2008 financial crisis which negatively affected GDP growth). No crisis is reflected in the national numbers.

One can think of health care as a percentage of GDP in two ways. The first is as a cost problem in regard to health care. The second is as a challenge to government and the private sector to increase the rate of GDP growth through a growing economy.

A second erroneous assumption is that a growing seniors population will bankrupt the health care system. This argument has now been widely debunked by the Canadian Health Services Research Foundation (CHSRF) and the Health Council of Canada, among others, who all emphasize that the aging population will add less than one percent per year to health care costs — a manageable increase.

So what’s actually causing the increases in our health spending? Evidence shows that the cost drivers are high technology, increased service utilization across all ages, and wage increases.

Given political will, these factors are all amenable to policy and administrative interventions. They are not driven by uncontrollable external factors such as population growth. The challenge we face now is one of good policy and management going forward, rather than one of uncontrollable cost increases due to demographics.

Integrated systems of care save money and deliver better care

With good policy it is possible to both provide better care, and reduce costs. This can be done, for example, by developing better, integrated systems of care delivery for older adults and people with disabilities.

There is now ample evidence to indicate that, for people with similar care needs, homecare costs less than residential care, and is often more appropriate to the needs of the patient. However, actual cost savings can only be obtained in integrated systems of care which enable trade-offs between lower cost homecare services and more costly long-term care facilities.  We currently have strong, made in Canada, integrated models which could be adopted widely.

Over a 10 year period from the mid-1980s to the mid 1990s, British Columbia had an integrated system which allowed it to restrain the growth of long-term care beds and invest new money into homecare resulting, after 10 years, in estimated annual cost avoidance of some $150 million. Recent academic papers, the CHSRF and the Special Senate Committee on Aging have all called for the adoption of integrated systems of care delivery for older adults.

Most of our current policies put a primary focus on short-term, hospital replacement homecare, when, in large part, it is often non-professional supportive care which allows people to continue to function independently.

While short-term homecare gets people out of the hospital front door more quickly, the back door remains wide open. Some community living seniors end up back at the hospital because they can no longer cope after their home support services have been cut. This can increase overall costs.

This is not a theoretical point. A British Columbia study found that people who had been evaluated by nurse assessors as needing homemaking services due to their frailty, and whose homecare was discontinued, cost the system considerably more, three years later, than people in similar communities with similar conditions who had been able to maintain a modest level of home support services over the same period of time.

Integrated care models can save money and provide better, and more appropriate, care.

While there are clear cost pressures on our health system, the current gloom about its demise and lack of sustainability is premature.  There is clear evidence of the potential for cost-effective alternative approaches which allow for significantly enhanced value for money in our health care system.

Let us at least try to get it right and then see if the dire predictions of the end of Medicare are still appropriate. We need to move from a discourse where we always ask for more money for health care to one about how we can improve the value of what we get for the money we already spend.

Neena Chappell is a Professor in the Centre on Aging and the Department of Sociology at the University of Victoria. She holds a Canada Research Chair in Social Gerontology, is the President of the Canadian Association of Gerontology and is the president-elect of Academy II (social sciences) of the Royal Society of Canada.

Marcus J. Hollander is a national health services and policy researcher.  Both Neena and Marcus are expert advisors for EvidenceNetwork.ca

November 2011

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