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Myths and demystification Canadian health care spending is out of controlCanadian health care spending is out of control –universal health care is unsustainable.

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Presentation on theme: "Myths and demystification Canadian health care spending is out of controlCanadian health care spending is out of control –universal health care is unsustainable."— Presentation transcript:

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2 Myths and demystification Canadian health care spending is out of controlCanadian health care spending is out of control –universal health care is unsustainable –health care crowding out other public spending parallel privately funded care can shorten waiting listsparallel privately funded care can shorten waiting lists the private sector always does it betterthe private sector always does it better –efficiency gains with private funding, for- profit delivery

3 Health care system FundingDelivery PrivatePublicPrivatePublic For-profitNot-for-profitFor-profitNot-for-profit

4 Myths and demystification Canadian health care spending is out of controlCanadian health care spending is out of control –universal health care is unsustainable –health care is crowding out other public spending parallel privately funded care can shorten waiting listsparallel privately funded care can shorten waiting lists the private sector always does it betterthe private sector always does it better –efficiency gains with private funding, for-profit delivery

5 Plan for talk can Canada afford high quality health care for all of us?can Canada afford high quality health care for all of us? privatizationprivatization –what does it really mean? –what does the evidence tell us?

6 Plan for talk Canada and the worldCanada and the world –the challenge of health care spending –private and public expenditures choiceschoices –public versus private financing –profit versus not-for-profit delivery

7 Health Care only a Small Part of Health

8 Economic growth health spending threatens economyhealth spending threatens economy –or does it? Canada produces and consumes 10,000 more SUVs next yearCanada produces and consumes 10,000 more SUVs next year –up sides and down sides, economic growth? Canada produces and consumes 10,000 more television sets in the next yearCanada produces and consumes 10,000 more television sets in the next year –up sides and down sides, economic growth? Canada produces and consumes 10,000 more hip replacements in the next yearCanada produces and consumes 10,000 more hip replacements in the next year –up sides and down side. economic growth?

9 Canada can easily afford universal public health care?Canada can easily afford universal public health care? –for sure –probably –probably not –for sure not –no idea do you have a car?do you have a car? –what kind? –new or used when you bought it? can you afford your car?can you afford your car?

10 Can Canada afford/sustain universal public health care? current system sustainable?current system sustainable? –for sure yes –likely –unlikely –for sure no how can we establish affordability/sustainability (or lack)?how can we establish affordability/sustainability (or lack)?

11 Demand is Rising Faster than Demography Ministry of Health Hospital Data (DAD), preliminary 2004/05 Knee Replacements Performed and vs , by age group

12 Driver: Costs of Pharmaceuticals

13 According to OECD Source: OECD Health data, Organization for Economic Co-operation and Development (OECD) 2008

14 Source: National Health Expenditure Database, Canadian Institute for Health Information (CIHI) 2008 OECD Health data, Organization for Economic Co-operation and Development (OECD) 2008 According to CIHI

15 Total Ontario Health Expenditures as a Percentage of G.D.P., to – Current Dollars

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17 Total Expenditure on Health (% GDP) in 1992 Source: OECD 2004

18 Total Expenditure on Health (% GDP) in 2005 Source: OECD 2008

19 Health spending $000 per person, 2000 Source: OECD

20 Public Expenditure on Health (% Total Expenditure on Health) in 2005 Source: OECD 2008

21 Isnt health care eating up provincial budgets? –health care 30% of Ontario budget –health care 45% of Ontario budget but public health care expenditure as % of GDP down, not up?but public health care expenditure as % of GDP down, not up?

22 According to OECD Source: OECD Health data, Organization for Economic Co-operation and Development (OECD) 2008

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25 Health care crowding out other programs?

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27 What are we spending less on? educationeducation –universities from 0.5% GDP to < 0.18% employment insuranceemployment insurance –80% eligible to 40% in Ontario social supportsocial support urban infrastructureurban infrastructure subsidized housingsubsidized housing

28 what is not sustainable is private funding

29 Is Private Funding Sustainable? Total expenditure on health as a % of GDP OECD Health Data (2007) what is not sustainable is private funding

30 Ensuring sustainability wait time initiativeswait time initiatives centralization of listscentralization of lists integration of care – specialized surgical facilitiesintegration of care – specialized surgical facilities interprofessional Careinterprofessional Care right provider, right place, right timeright provider, right place, right time chronic disease managementchronic disease management self-care pathwaysself-care pathways home care and community-based carehome care and community-based care electronic Health Recordelectronic Health Record duplication minimizationduplication minimization safety and qualitysafety and quality

31 Examples of Success Hamilton –70% decrease in referrals to psychiatrists Alberta reduced wait times for hip and knee replacements from 19 months to 11 weeks Sault Ste. Marie –50% reduction in readmissions of heart failure patients Nova Scotia South Shore no ventilator associated pneumonias in 14 months

32 Implications of not sustainable we cant afford high quality care for those who cant pay extrawe cant afford high quality care for those who cant pay extra –longer wait times? –poorer quality care? we are ready to spend scarce resources on improving care for those who can pay, but not spend those same resources on improving care for those who cannot we are ready to spend scarce resources on improving care for those who can pay, but not spend those same resources on improving care for those who cannot

33 Share of Spending that is Public, by Sector CanadaGermanyFrance Total expenditure on health 70% 70%78% 76% 76% Physician services 98%85% 74% 74% Curative and rehabilitative inpatient care 93%84% 92% 92% Pharmaceuticals and other medical non-durable goods 38%75% 67% 67% Long-term nursing care 78%75%100% Dental services 5% 5%68% 36% 36% Source: Canadian Institute for Health Information (2005a)

34 Canadian governments fiscal outlook tax cutstax cuts –provinces $30 billion per year foregone income –federal government $40 billion per year over $60 billion in federal surpluses used in last 10 years used to pay down debtover $60 billion in federal surpluses used in last 10 years used to pay down debt –longest string of surpluses in Canadian history –2007 surplus 9.6 billion –unique among G8 countries

35 Sustainable with growing economywith growing economy –more for other needs/desires despite health care increase as % of GDP health care 10% of economy $100health care 10% of economy $100 –$90 for everything else over 20 years healthcare to 15%, economy 2Xover 20 years healthcare to 15%, economy 2X –$30 for health care –$170 for everything else

36 Is high quality universal health care for all sustainable? health care as % of GDPhealth care as % of GDP –total stable over last 15 years -public even less -Canada 2 nd 15 years ago, now middle of pack -tax cuts, not health spending, has compromised other social spending -innovation can further increase efficiency -Romanow: Health care as sustainable as we choose it to be

37 does Canada have a one tier or two (or more) tier health care system?does Canada have a one tier or two (or more) tier health care system? –one tier –two tier

38 Health care system FundingDelivery PrivatePublicPrivatePublic For-profitNot-for-profitFor-profitNot-for-profit

39 What is public and what is private? physician and hospital servicesphysician and hospital services –almost totally public mixmix –home care –chiropractic, physiotherapy –drugs –dental care –eye care

40 Share of Spending that is Public, by Sector CanadaGermanyFrance Total expenditure on health 70% 70%78% 76% 76% Physician services 98%85% 74% 74% Curative and rehabilitative inpatient care 93%84% 92% 92% Pharmaceuticals and other medical non-durable goods 38%75% 67% 67% Dental services 5% 5%68% 36% 36% Source: Canadian Institute for Health Information (2005a)

41 Public or Private Pay? Canada right with physician and hospital, Europe with others?Canada right with physician and hospital, Europe with others? Canada right with drug, Europe with physicians and hospital?Canada right with drug, Europe with physicians and hospital? equityequity efficiencyefficiency cost controlcost control industrial impactindustrial impact effectivenesseffectiveness

42 Public or Private Pay? equityequity autonomyautonomy efficiencyefficiency cost controlcost control industrial impactindustrial impact effectivenesseffectiveness

43 Autonomy often presented as choiceoften presented as choice virtually all other sectors, can pay for bettervirtually all other sectors, can pay for better private funding ensures autonomyprivate funding ensures autonomy –public funding, if universal, compromises

44 Equity 2001 national representative survey2001 national representative survey –1400 Canadians Did not fill Rx because of cost Needed dental care but did not go because of cost Had a medical problem but did not go to doctor because of cost Below average income 22%42%9% Above average income 7%15%3% Health Affairs 2002; 21:

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46 How can we tell which is more efficient, effective? ideal: randomized trialideal: randomized trial fall backfall back –cross-national comparisons –intra-national physician and hospital versus drugsphysician and hospital versus drugs –before-after comparisons

47 Myths and demystification Canadian health care spending is out of controlCanadian health care spending is out of control –universal health care is unsustainable –health care is crowding out other public spending parallel privately funded care can shorten waiting listsparallel privately funded care can shorten waiting lists the private sector always does it betterthe private sector always does it better –efficiency gains with private funding, for-profit delivery

48 Logic and logical problems more money from private fundingmore money from private funding –more resources, wait times shorter physician and nursing shortagephysician and nursing shortage –private funding wont train more –publicly funded facilities lose best trained privately funded care can only exist if waiting lists for publicly funded careprivately funded care can only exist if waiting lists for publicly funded care affluent support for publicly funded care dependent on participationaffluent support for publicly funded care dependent on participation

49 Australia over last decade big move to two tierover last decade big move to two tier government subsidies to buy private insurancegovernment subsidies to buy private insurance government penalties to wealthy who dont buy private insurancegovernment penalties to wealthy who dont buy private insurance

50 Australia Allows a regulated, parallel system of private finance for inpatient hospital careAllows a regulated, parallel system of private finance for inpatient hospital care Since mid-1990s the private insurance sector struggled and has been subsidized by governmentSince mid-1990s the private insurance sector struggled and has been subsidized by government Public waiting lists remain long and equity problems have developedPublic waiting lists remain long and equity problems have developed Hurley, J. et al. (2002). Parallel Private Health Insurance in Australia: A Cautionary Tale and Lessons for Canada.

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53 Access Duckett. (2005). Australian Health Review More private care More public care

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56 Hurley et. al

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59 Peter MacTaggart, urologist, Brisbane, Australia It has long been the case here, that for "routine" surgery, waiting times are shorter for individuals who are able to access private care. Sadly, there are instances where acute or emergent care is delayed at public hospitals. Most practitioners find this intolerable, but there is little to be done with the prevailing paradigm, except work harder with less resources!!

60 Myths and demystification Canadian health care spending is out of controlCanadian health care spending is out of control –universal health care is unsustainable –health care is crowding out other public spending parallel privately funded care can shorten waiting listsparallel privately funded care can shorten waiting lists the private sector always does it betterthe private sector always does it better –efficiency gains with private funding, for-profit delivery

61 Private Funding is Inefficient Total expenditure on health as a % of GDP OECD Health Data (2007)

62 S Woolhandler Int J H Serv 2004;34: Administration as % of Total HC Exp 0% 5% 10% 15% 20% 25% 30% 35% USCAN

63 Administrative cost difference developing insurance packagesdeveloping insurance packages selling insuranceselling insurance evaluating applicationsevaluating applications documenting use of servicesdocumenting use of services –hospital and physician offices assessing claimsassessing claims executive salariesexecutive salaries profitsprofits

64 Controlling Pharma Costs Freeze drug costs for one yearFreeze drug costs for one year –Save enough money for 10,000 family docs, or more than 100,000 knee replacements Morgan, Straight, 2007 How? –New Zealand Prescription meds are coveredPrescription meds are covered Requires tenders from drug companiesRequires tenders from drug companies Applies reference-based pricingApplies reference-based pricing Negotiates new coverage and older drug costsNegotiates new coverage and older drug costs Drugs cost are on pace with GDP growth Drugs cost are on pace with GDP growth

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66 Public Expenditure on Health (% Total Expenditure on Health) in 2005 Source: OECD 2008

67 Share of Spending that is Public, by Sector CanadaGermanyFrance Total expenditure on health 70% 70%78% 76% 76% Physician services 98%85% 74% 74% Curative and rehabilitative inpatient care 93%84% 92% 92% Pharmaceuticals and other medical non-durable goods 38%75% 67% 67% Dental services 5% 5%68% 36% 36% Source: Canadian Institute for Health Information (2005a)

68 Cost Control public paypublic pay –physician services slight decrease 15.4% 1991 to 13.4%15.4% 1991 to 13.4% –hospital marked decrease 45% (1976) to 28%45% (1976) to 28% pharmaceutical increasepharmaceutical increase –9% (1984) to 17.4%

69 Driver: Costs of Pharmaceuticals

70 Analysis of deaths considered amenable to health care in those under 75 years of age in 19 industrialized countries

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72 Systematic review health outcomes in Canada and US, 2007, Open Medicine. 17 leading US/Canadian researchers17 leading US/Canadian researchers comprehensive search yielded 38 studiescomprehensive search yielded 38 studies compared outcomes of conditions with identical diagnosiscompared outcomes of conditions with identical diagnosis cancer, cardiovascular disease, renal dialysis, cataracts...cancer, cardiovascular disease, renal dialysis, cataracts studies showed better outcomes in Canada14 studies showed better outcomes in Canada 5/10 with broad populations, statistical adjustment5/10 with broad populations, statistical adjustment 5 studies favoured the U.S. 5 studies favoured the U.S. 2/10 high quality2/10 high quality 19 studies had equivalent or mixed results19 studies had equivalent or mixed results 3/10 high quality3/10 high quality

73 (All data 2006 est. from CIA World Fact Book) CanadaUSA Infantmortality 4.69 per per 1000 LifeExpectancy F M F M Effectiveness

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75 Summary single public pay more efficientsingle public pay more efficient –administrative efficiencies –effective cost control single public payer cost-efficientsingle public payer cost-efficient –equal or better outcomes than much more efficient U.S. system

76 Private Spending Growing Faster than Public Spending

77 Other international comparisons European systems do better European systems do better more private pay for hospitals/doctors more private pay for hospitals/doctors better health outcomes

78 Success of European systems more public paymentmore public payment –drugs, dental services much higher level of social securitymuch higher level of social security –employment insurance –welfare –public housing –maternity/paternity benefits –child care lower gradient in wealthlower gradient in wealth

79 Industrial competitive advantage U.S. has big problem with industrial burden of health care expendituresU.S. has big problem with industrial burden of health care expenditures –big auto makers spend more per car on health care than steel –Starbucks spend more on health care than on coffee beans puts Canada at major industrial advantageputs Canada at major industrial advantage –auto industry major beneficiary

80 Quality care: WHO 2000 ranking Canada 30 thCanada 30 th –US 37 th severely criticizedseverely criticized –never repeated

81 Autonomy often presented as choiceoften presented as choice virtually all other sectors, can pay for bettervirtually all other sectors, can pay for better private funding ensures autonomyprivate funding ensures autonomy –public funding, if universal, compromises

82 Life expectancy at age 25, U.S.

83 Age-standardized hospitalization rates per 100,000, Canada

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85 SES and health Canada baby born in poor neighbourhood Ontario city 2X likelihood dying in infancy as wealthy.baby born in poor neighbourhood Ontario city 2X likelihood dying in infancy as wealthy. At birth, boys of families with highest income level live 5.6 years longer, and girls 1.8 years longer, lowest income.At birth, boys of families with highest income level live 5.6 years longer, and girls 1.8 years longer, lowest income. eliminating difference same impact on Canadians life expectancy as eliminating all deaths from heart disease.eliminating difference same impact on Canadians life expectancy as eliminating all deaths from heart disease.

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89 Equity 2001 national representative survey2001 national representative survey –1400 Canadians Did not fill Rx because of cost Needed dental care but did not go because of cost Had a medical problem but did not go to doctor because of cost Below average income 22%42%9% Above average income 7%15%3% Health Affairs 2002; 21:

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91 Gradient in cancer deaths three studies – –Canadian and American cancer registries classified high, moderate, low income according to census tract – –all no difference in higher and middle income between Canada and U.S. Toronto vs Detroit, Am J Public Health 1997 – –initiated 1984 to 1986, 5 yr follow-up – –significant survival advantage for Canada in 13 of 15 for low income Toronto vs Seattle, San Fran, Hartford, JPHM 2000 – –low income survival rate ratio favored Canada 1.35 (95% CI 1.30 to 1.40) under 65: 1.46 (95% CI ) Ontario vs California, Annals Epid 2000, breast ca focus – –node positive SRR 1.22 ( ) – –under (95% CI 1.10 – 1.71)

92 J public health med 2000 Canadian and American cancer registries Toronto vs Seattle, San Fran, Hartford – –3.5 vs 4.8 million; > 50,000 pts with cancer – –most advantaged U.S. cities poor defined on basis of residency – –lowest tertile of income – –followed for 5 to 7 years no difference in mortality rates in middle and high income low income survival rate ratio 1.35 (95% CI 1.30 to 1.40) – –survival in younger 1.46 (95% CI )

93 Annals Epidemiology 2009 analysis restricted to breast cancer – –stage specific – – large city, small, rural – –California versus Ontario no difference in mid and high income low income node positive SRR 1.22 ( ) – –under (95% CI 1.10 – 1.71)

94 Physician to Population Ratios Measure of physician human resourcesMeasure of physician human resources Canada 2.2/1000Canada 2.2/1000 OECD average 3.0/1000OECD average 3.0/1000 France 3.4/1000France 3.4/1000

95 Private Financing Although private health insurance can provide greater choice and access to services for those who can afford it, it has not been found to improve access to publicly insured services, lower costs or improve quality. Although private health insurance can provide greater choice and access to services for those who can afford it, it has not been found to improve access to publicly insured services, lower costs or improve quality. - Its About Access! Canadian Medical Association, Its About Access! Canadian Medical Association, 2006

96 Health care system FundingDelivery PrivatePublicPrivatePublic For-profitNot-for-profitFor-profitNot-for-profit

97 Debate advocates of investor owned private for-profit health care delivery argueadvocates of investor owned private for-profit health care delivery argue –for-profit providers deliver care more efficiently advocates of not-for-profit health care delivery fearadvocates of not-for-profit health care delivery fear –for-profit facilities compromise care to maintain investors returns

98 For-profit or not-for-profit? for-profit initiativesfor-profit initiatives –Ontario: home care, MRI/CT, P3 hospitals –other provinces, surgical clinics systematic reviewssystematic reviews –investor-owned for-profit vs nfp hospital death rateshospital death rates dialysis death ratesdialysis death rates hospital charges to payershospital charges to payers

99 Systematic review and meta-analysis systematic reviewsystematic review –focused question –explicit eligibility criteria –comprehensive search –assessment of validity of primary studies –eligibility and quality assessments are reproducible meta-analysis combines the results of several studiesmeta-analysis combines the results of several studies

100 Screening process 8665 unique citations8665 unique citations teams of 2 individualsteams of 2 individuals –independently screened the titles and abstracts 805 full text publications805 full text publications –identified for full review

101 Eligibility criteria and study identification we includedwe included –observational studies comparing patient death rates in investor owned private for-profit and private not-for-profit hospitals extensive searchextensive search –11 bibliographical databases

102 Assessment of study eligibility masked results (i.e. blacked them out)masked results (i.e. blacked them out) teams of two individualsteams of two individuals –independently evaluated each masked article to determine eligibility disagreements resolved by consensusdisagreements resolved by consensus agreement was excellent (Kappa 0.83)agreement was excellent (Kappa 0.83)

103 Results all studies all studies –comprehensive search, top quality studies –published in top peer-reviewjournals hospital mortalityhospital mortality –38 million patients between –2% more deaths in for-profit –2,000 deaths in Canada (MVA, cancer, suicide) dialysis mortalitydialysis mortality –500,000 patient years 1973 to 1997 –8% more deaths in for-profit charges 19 greater in for-profitcharges 19 greater in for-profit

104 Relative Risk of Hospital Mortality: Adult Patients ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Shortell , Keeler 220 4, Hartz 2,368 3,107, Manheim MH 1,252 1,537, Manheim FS 1,617 2,228, Kuhn 2,580 3,353, Pitterle 3,482 4,529, Mukamel 1,653 5,298, Bond 3,224 4,210, Yuan Medical 3,316 7,386, Yuan Surgical -- 4,396, Lanska , McClellan 2, , Sloan 2,360 7, Totals 26,399 36,402, Relative Risk and 95% CI Favours Private Not-For-Profit Favours Private For-Profit Figure 3 Study Number of Hospitals Number of Patients % Weight Random Effects Pooled Estimate

105 Relative Risk of Mortality in Hemodialysis Patients All Studies Included in the Systematic Review ! ! ! ! ! ! ! ! ! ! Relative Risk and 95% CI Favours Private Not-For-Profit Favours Private For-Profit Oldest Data Newest Data AuthorRR95% CI Plough Farley Garg Irvin(1) Irvin(2) McClellan Port Irvin(3) Random Effects Pooled Estimate for All 8 Studies RR = 1.09 (95% CI, ) Random Effects Pooled Estimate for 4 Selected Studies RR = 1.08 (95% CI, )

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107 Why for-profit a bad deal 15% has to go to profit15% has to go to profit higher administrative costshigher administrative costs higher CEO salarieshigher CEO salaries pay taxespay taxes less for patient careless for patient care

108 Fraud US $50 to $100 billion (5 to 10%) lost yearly in fraudUS $50 to $100 billion (5 to 10%) lost yearly in fraud for-profit hospital settlementsfor-profit hospital settlements –Columbia/HCA 1.7 billion in 2000 –National Med Enterprise 379 million to to 2000 –112 to 500 agents –600 to 3,000 cases

109 Conclusions all health systems face cost pressuresall health systems face cost pressures –Canada has done well in constraining costs public versus private paymentpublic versus private payment –better in equity, efficiency, industrial advantage, cost control –worse in autonomy not-for-profit deliverynot-for-profit delivery –advantages in effectiveness, cost, avoiding fraud

110 Conclusions no health care cost crisisno health care cost crisis private finance wont cut wait listsprivate finance wont cut wait lists public funding more efficientpublic funding more efficient not-for-profit delivery more efficientnot-for-profit delivery more efficient

111 Conclusion no health care cost crisisno health care cost crisis public paypublic pay –more equitable –more efficient –industrial advantage investor-owned for-profit vs nfpinvestor-owned for-profit vs nfp –outcomes worse –costs more directly, and fraud

112 Courage my Friends, Tis Not Too Late to Make a Better World! Tommy Douglas

113 Summary: overall pressures on health spending but: – –Canada better than most other countries – –problem is tax cuts, not health spending private pay wont shorten waiting lists – –will just make ability to pay, rather than need, the criterion to get to the front single payer maximizes efficiency – –not-for-profit more efficent than for- profit


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