Healthcare: Technology is a bigger cost driver than demography

An aging population—or “gray tsunami”—is the shadow lurking in the background of health care, poised to drive up health-care spending and wipe out the system as we know it. Technology, on the other hand, is a means to improving efficiency in the system and reducing costs. Consider the early, sparkling promises of Obamacare south of the border or electronic health records in Canada. Policymakers trumpet this conventional wisdom—but it isn’t quite right.

As a recent report by the credit rating agency Standard & Poor’s argues, your grandmother’s visits to the doctor aren’t the key driver of health costs. Health technology, however—encompassing anything from drugs to diagnostic imaging—is becoming the great burden on the health systems of G20 countries.

Unlike the graying of the workforce, “These non-demographic factors carry lower long-term visibility on budgetary challenges for policymakers,” S&P notes, warning that if governments of developed economies don’t shift their focus from pension reform to figuring out how to constrain other causes of rising health-care costs, they’ll face “ballooning” debt levels and possible downgrades of their creditworthiness.

As novel and counter-intuitive as it may sound, S&P’s warning isn’t anything new, actually. Despite the popular rhetoric about the “gray tsunami” continually bandied about by politicians, there are some three decades of research showing that aging alone is a marginal and predictable driver of health-care cost increases, in the order of about 0.5 to one per cent per year. Most recently, a report by Canadian Institute for Health Information noted that population aging contributed an annual average growth of only 0.8 per cent.

Politicians, on the other hand, too often neglect to address the drain on public coffers from technology-related costs. According to the CIHI report, spending on prescription drugs grew at an annual average rate of 10.1 per cent between 1998 to 2007—a rise that was caused by both increased utilization and a change in the mix of drug types. Increasing diagnostic testing (lab and imaging) was another big driver. Plus, we’re all using the system more—not just older folks, noted Kimberlyn McGrail, assistant professor at the University of British Columbia. She has studied health care spending and found that “what is driving increasing health-care costs is greater intensity of service use. People of all ages are receiving more and sometimes more expensive services than used to be the case.”

So, we are gobbling up health care, and average health-care costs per head are going up, largely because of the way we use technology, noted McGrail. “There are new drugs and new conditions that they treat, there are new tests that can be done, and new recommendations for who should receive those tests and how often they should be getting them. There are new surgical procedures and better ways of doing older procedures that make surgery better and safer, but also means that a larger pool of people are considered ‘eligible’ to receive those interventions.”

This doesn’t have to be the case, though. Technology can and does save money in health care—when it’s used prudently. As UBC professor and veteran health researcher Morris Barer puts it, “technology in and of itself” is not the problem. “It’s that the uncritical application and use of new and more expensive technology—including drugs—can be a cost driver.”

Now, the big question we need to answer is how much of this increasing use of health care is actually improving our health and quality of life. For example, another area of swelling costs over the years has been physician services. Consider this report out of the Institute for Clinical Evaluative Sciences this week: Payment to Ontario physicians shot up to $8 billion in 2010, more than twice the $3.7 billion it stood at in 1997. (Doctor compensation now accounts for 20 per cent of total health care costs in the province, and Ontario is not alone; according to the CIHI report, physician spending across Canada was among the fastest-growing health categories in recent years, increasing at 6.8 per cent per year between 1998 to 2008.) But, ICES concludes, though we’ve continued to increase doctor pay, we haven’t determined whether this has led to improved patient outcomes or a better health system overall.

This all suggests we can take comfort in the fact that it’s not an unstoppable tsunami that’ll wipe us out. The problems we’re facing are amenable to sound policy responses. Instead of demographic determinism, “The real cost drivers are increased utilization, across all age groups, technology, and labour costs,” explains Canadian health-policy analyst, Marcus Hollander. “We have a policy and management challenge.”

That’s a nice thought, if only it were that simple. Politicking often gets in the way of lucid policy. A recent example was the Ontario Health Minister distancing herself from the suggestion that the province would no longer pay for elective cesarean sections—a reasonable move—after a public uproar. As André Picard, the Globe and Mail‘s health policy columnist, observed, “There was an outcry and the minister quickly backed down. So the province limits itself to delisting trivial things like vitamin D tests.” (All this unfolded on the eve of a report by economist Don Drummond, to be released next week, about how to eliminate the province’s public deficit. The “austerity czar” is expected to recommend drawing down C-sections as a cost-saving measure.)

So, for now, while policymakers promise “evidence-based decisions” to cut spending, they seem to be actually targeting only certain drivers of cost, possibly the ones they think voters will intuitively understand–like the aging population. “The gray tsunami is used as a distraction,” notes Barer, “and an excuse not to focus on the real sources of cost pressure.” Maybe the possibility of future credit downgrades and European-style austerity, as S&P foreshadows, will push Canadian policymakers in a truly evidence-based direction—and away from the tidal wave of easy rhetoric.

By Julia Belluz
Macleans.ca
Friday, February 10, 2012
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Lengthy waiting times cost B.C. health agencies $7 million

Province withheld funding because surgery targets were not met

Three of B.C.’s health authorities had $7 million in funding withheld by the provincial government as a penalty for not meeting waiting-time targets for certain surgeries last year, government figures show.

The Interior Health Authority took the heaviest penalty, at $3.4 million, followed by Fraser Health at $2.8 million and Northern Health at $790,000. The Vancouver Coastal and Vancouver Island health authorities met their targets and had no funding withheld by B.C.’s health ministry.

The province withholds 10 per cent of the health authorities’ budget for hip-replacement, knee-replacement and cataract surgeries at the beginning of the fiscal year and pays it out at the end of the year provided they have met the wait-times target for those surgeries, said health ministry spokesman Ryan Jabs.

The target is that no more than 10 per cent of clients wait longer than 26 weeks for hip- or knee-replacement surgery. For cataract surgery, the target is no more than 10 per cent waiting longer than 16 weeks and no cases waiting longer than a year.

Jabs said the strategy, now in its third year, provides a carrot-type incentive to hospitals and health authorities to keep their surgical waiting times down.

“It’s a move away from doing the same old thing and working towards more accountability.”

Jason Sutherland, an assistant professor at the University of B.C.’s school of population and public health, is conducting a study on the effectiveness of such activity-based funding and said the B.C. government’s incentive strategy appears to be doing what it was designed to do. “If they are able to and are willing to offer these incentives over the long term, hospitals will start to respond differently, to become more efficient or change their mix of skills or staff to be able to do more to try and get this incremental funding that they’re not getting right now,” he said, adding that he is not aware of any other provinces pursuing a similar strategy.

However, he cautioned that the incentive program carries the risk of hospitals substituting other surgeries for the ones that will bring in cash.

“The hospitals ... and the health authorities are obligated to promise to the ministry that they don’t substitute, but there’s no formal mechanism to evaluate whether or not that happens, so this is something that I think they need to be on guard about.”

Urgent surgeries may have been one thing that contributed to Interior Health not meeting its wait-time targets in the other categories, said chief financial officer Donna Lommer, but the main factor was a general increase in demand.

“We’ve got an aging population and lots of demands on service. Surgery is based on urgency, so the most urgent gets in,” she said. “As the pressure builds, some of the other more urgent cases might actually choke out some of the time that is slated for hips and knees and cataracts.”

Interior Health realized in September that it would not meet its waiting-time targets and planned for the $3.4-million shortfall so it could absorb the effect, Lommer said.

The province paid the health authorities $12.2 million of the $19.2 million initially set aside. The remaining $7 million went into the province’s general revenue and was put toward the deficit, Jabs said.

By Tara Carman, Vancouver Sun February 7, 2012
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Toward More Efficient Care

Why we never seem to have enough hospital beds, and how that can change.

Canada spends more than $47 billion a year on hospital care, and has over 70,000 hospital beds. Yet accessing these beds when they’re needed most remains an important public health concern. Patients regularly experience long emergency-room waits and cancelled surgeries as a result of the health system’s inability to make hospital beds readily available. Understandably, frustrations run high.

Changing the way health care is funded can be an important solution to this problem.

Many hospital beds are being used by patients who no longer require the specialized equipment or nursing care provided by a hospital, but, despite having been approved for discharge by their doctor, are awaiting placement in a continuing-care facility – either hospital-based rehabilitation, residential, or home care. They remain hospitalized because there are no appropriate continuing-care settings that can accommodate their medical and social needs. Such patients use 14 per cent (or 9,800) of the hospital beds in Canada each day – a stunningly inefficient use of hospital services that is unparalleled in other developed countries.

In a recent report, the Canadian Health Services Research Foundation targets the complex underlying factors that have made effective solutions to Canada’s “hospital-bed problem” difficult to implement.

First, there is a disparate mix of stakeholders with different objectives, including publicly funded physicians and hospitals, and a mix of publicly and privately funded continuing-care providers. They all need to work together to empty the beds currently occupied by patients who no longer need to be in hospital, and to divert future unnecessary hospital-based care. This is a tall order when financial incentives are not aligned among providers to achieve these fundamental goals.

Second, health-care providers are funded in “silos”: one silo funds hospitals, one funds doctors, and still others fund rehabilitative, residential, and home care. These silos can create perverse financial incentives that don’t optimize scarce health-care dollars. For example, hospitals are paid one lump sum to cover the care of all their patients, giving them little incentive to discharge a less expensive patient and, in return, admit a new, expensive patient without any change in revenue.

Similarly, with the exception of recent, and tentative, steps in Alberta and Ontario, continuing-care providers are not remunerated based on the complexity of patients, which makes it challenging for these providers to look beyond the additional costs of providing care to complex patients stuck in hospital beds.

So what options do we have?

Expanding acute hospital capacity is unappealing for multiple reasons. While it might resolve the problem temporarily, it fails to address the underlying issue of transitioning patients to continuing care. Even if the hospital space were available, few patients would want to live in a hospital setting. This is also the most expensive option, and has already been tried with no success.

Another option is to expand continuing-care capacity. However, the care and social needs of waiting patients are so varied that it would be difficult to manage the expansion in a way that effectively provided the right kind of care at the right time, in the right geographic area.

So what’s the solution?

Research has shown that financial incentives have been effective at motivating changes in the behaviour of health-care providers. To date, the use of financial incentives has not been pursued in Canada – in part because of its association with privatized health care. But cost-effective methods that free hospital capacity and don’t undermine Canada’s public health system should be seen as a step forward.

One potential solution is to change the way continuing-care providers are funded and align their financial incentives with those of hospitals. We should give continuing-care providers the financial tools to strengthen care co-ordination with hospitals, and ensure they are fairly reimbursed for accepting the most complex patients. A potential arrangement might take the form of a one-time, per-patient payment to continuing-care providers that accept patients who would otherwise remain waiting in hospitals.

Creating this incentive would accomplish two things: It would reward continuing-care providers for “pulling” patients to appropriate lower intensities of care, and it would free up the current stock of hospital beds.

Clearly, our current system undermines the provision of effective and safe care when Canadians need it most. Creating necessary financial incentives and investing in home-based care may be just what we need to improve hospital efficiency, free up hospital beds, reduce waitlists, and improve patients’ experiences with the health-care system.

The Mark
by Jason Sutherland and Trafford Crump
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The case for a pan-Canadian health workforce observatory: moving from crisis management to future planning, now

We would have ready access to the best evidence to support health workforce innovations and to support those who must make the hard decisions about health workforce issues. An observatory would help to shift us away from crisis management towards an approach that is future-oriented. By IVY LYNN BOURGEAULT, MORRIS L. BARER

Following the mid-January meeting of the premiers regarding the future of Canadian health care, a communiqué was issued announcing the creation of a working group on health-care innovation to examine three critical issues related to the health workforce. These issues include examining the scopes of practice of health-care providers to better meet patient needs, better coordinate management of health human resources and accelerate the adoption of clinical practice guidelines (CPGs).

It is refreshing to see attention paid at this level to broader health workforce issues regarding what health care providers actually do. Typically, the public dialogue around the health workforce is narrowly focused on addressing alleged shortages and other supply related crises, real or imagined.

We are all familiar with the now common political promise of more doctors and more nurses. And at least in the case of the former, we are well along the road to fulfilling that promise, in spades—first year enrolment in Canadian medical schools is now 80 per cent higher than a decade ago.

Indeed, policy-makers are running the risk of over-reaction. Many commentators on the state of health care in Canada have noted that we are not so much suffering from a lack of health-care professionals as from their inappropriate deployment. In other words, we could be doing more, and better, with existing resources. Indeed, times of constraint can be a stimulus to needed change, whereas times of excess can be an impediment to appropriate efficiency improvements.

But before we get too excited about this latest political announcement, a bit of historical context is important. Scopes of practice, coordinated management and CPGs have all come under a variety of committee, task force, working group and royal commission lenses over the past two decades. As important as that work has been, the intermittent nature of these endeavours has resulted in a frustrating lack of follow through or haphazard implementation of a series of well-crafted, often evidence-based recommendations.

Health workforce issues are health care policy’s great soap opera.

Skip a decade and then pick up the thread, and you’ll feel right at home in the midst of the same recurring issues. Indeed, we have known from research now almost 40 years old, and based in Canada, about the huge potential for nurse practitioners in primary care. Yet implementation of this single scope-of-practice-related finding continues to be hamstrung by a maddening mix of professional resistance and lack of political will.

Instead, we train ever more physicians.

This history of failed implementation of thoughtful recommendations is readily apparent to the various health workforce stakeholders who have been around for any length of time.

There is now a chorus of voices in this community highlighting the need for better health workforce policy and planning. This rose to a crescendo in the call to a recent all-party House Standing Committee on Health for the establishment of a pan-Canadian health workforce observatory. The idea of an organization that assembles health workforce data, information and expertise to inform more rational approaches to policy development has taken hold internationally. But would it alone make a difference here?

Canada would not be a leader in establishing such an observatory. Several other developed and developing countries have created organizations to compile, synthesize and translate the best evidence for health workforce decision-making. A similar federated system, Australia, for example, recently established Health Workforce Australia as a partnership of the Council of Australian Governments (similar to our federal-provincial-territorial organizations).

Developing nations, which face even more critical health workforce needs, have found such an organized approach critical to strengthening their health systems. Canada, which used to be recognized on the international stage as a leader in health workforce innovations, now looks to be a laggard. To its credit, the standing committee supported the call for an observatory in its recommendations but, sadly, the Government of Canada response did not even acknowledge the recommendation being made.

What might an observatory offer Canadians? A concentrated, coordinated and sustained effort to integrate health workforce planning, policy and reform in conjunction with complementary reforms to education and training.

We would have ready access to the best evidence to support health workforce innovations and to support those who must make the hard decisions about health workforce issues. An observatory would help to shift us away from crisis management towards an approach that is future-oriented.

But we will need more than an observatory if we are to avoid repeating past mistakes.

If a lack of evidence has not been the impediment to change to this point, then it will take more than an observatory to kick start real progress in the three areas identified by the Premiers last week. It will also take more than a pronouncement from the Premiers to force the cancellation of this soap opera.

There are no quick fixes when it comes to the health workforce, true. But if our leadership is committed to using the information that would be generated through an observatory, then it would be an important investment worth making.

Ivy Lynn Bourgeault holds the CIHR/Health Canada Research Chair in Health Human Resource Policy at the University of Ottawa. Morris Barer is the director of the Centre for Health Services and Policy Research, and a professor in the School of Population and Public Health, at UBC. Bourgeault and Barer are two of the three co-leads of the recently established pan-Canadian Health Human Resources Network.

The Hill Times
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Congratulations to our CHSPR Faculty Research Award winners

Congratulations to the 2011 recipients of UBC’s Faculty Research Awards. These awards recognize talented researchers on campus, and recognition at the university level can also lead to similar honours at the national and international level.

This year, two members of the CHSPR Faculty won awards:

UBC KILLAM FACULTY RESEARCH FELLOWSHIPS

Junior Category:
Steve Morgan, Centre for Health Services and Policy Research
Sabrina Wong, Nursing, School of Population and Public Health

These winners, and the winners in all categories, will be honoured during this year’s Celebrate Research Week Awards Reception to be held on March 8, 2012 at the Museum of Anthropology.
celebrateresearch.ubc.ca/2011/01/28/2011-faculty-research-awards/

Drug Compliance Undermined By Affordability, Canada

For individuals on lower incomes, those without medication insurance, or people with poorer health cost-related non-adherence rates were higher. Dr. Michael Law, Center for Health Services and Policy Research.

According to an investigation by researchers from the University of British Columbia, University of Toronto and the Institute for Clinical Evaluative Sciences published in CMAJ (Canadian Medical Association Journal), the cost of prescription medication affects 1 in 10 Canadians, and 1 in 4 individuals without medication insurance cannot afford to have their prescriptions filled.

The researchers examined data from 5,732 individuals who took part in the Canada Community Health Survey in 2007. The team asked those who received a prescription whether they had difficulties filling a prescription, tried to make the prescription last longer due to the cost, or avoided refilling a prescription. A yes to any of these questions was considered to be cost-related non-adherence to prescription drugs.

Several individuals in Canada do not have insurance for prescription medications and must pay themselves. Despite the country's publicly funded health care for hospital and physician services, universal drug coverage is insufficient. In 2010, individuals in Canada paid a total of $4.6 billion for these expenses, or approximately 17.5% of total spending, on prescription medications.

Results from the investigation reveal that approximately 10% of individuals in Canada who received one or more prescriptions had difficulties filling a prescription due to the cost. British Columbia had the highest rates of cost-related non-adherence at 17%. For individuals on lower incomes, those without medication insurance, or people with poorer health cost-related non-adherence rates were higher.

Dr. Michael Law, Center for Health Services and Policy Research, University of British Columbia, said:

"We found cost-related non-adherence was most commonly reported by individuals who were poor, who reported worse health status, and who had multiple chronic conditions. Among those without drug insurance, cost-related non-adherence was reported by 26.5% compared with only 6.8% among those who reported having drug insurance."

According to statistical projections, cost-related non-adherence is 35.6% more likely for low-income individuals without medication insurance, compared with 3.6% for individuals with insurance on higher incomes.

The researchers conclude: "Reducing cost-related non-adherence would likely improve health and reduce spending in other areas, such as administration to hospital for acute care. Of all the factors we found to be associated with cost-related non-adherence, insurance coverage is the most amenable to being addressed through changes in public policy."

Dr. Law continues:

"We think these findings are timely, with the premiers' Council of the Federation meeting January 16-17, 2012 in Victoria, BC. The country's 13 provincial and territorial premiers should focus on how to address this disparity to improve access to prescription drugs for all Canadians."

By Grace Rattue
Medical News Today
20 Jan 2012 - 10:00 PST
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A call for a universal drug plan for Canada

It's been 70 years since a report called for medicine to be covered by national health insurance. After many campaign promises, why doesn't Canada have universal pharmacare?

This year marks 70 years since a federal commission called for drugs to be included in national health insurance. But after numerous election campaign promises – and many people not covered by private plans such as Blue Cross – why doesn't Canada have pharmacare?

Increasing prices and cost of living have pushed drug prices out of many Canadians' reach, according to a study released this week – particularly in B.C. where one in six residents cannot afford to fill their prescriptions. In the wake of this week's premiers' health care conference, the Vancouver Observer investigated drug costs.

“We hoped to highlight just how many Canadians are having trouble affording the costs of their medicines,” said Dr. Michael Law, author of a report published this week in the Canadian Medical Association Journal. “(Pharmacare) would help us with affordability problems, and it would almost certainly save us money.

“A universal drug plan could do both – it could reduce the cost people pay at the pharmacy, as well as the cost (to the system) overall, if it were designed to do both of those things.”

Medicare without pharmacare

Law – an assistant professor at the University of British Columbia (UBC) and on faculty with UBC's Centre for Health Services and Policy Research – said the pharmacare debate has, in fact, been simmering for 70 years. But despite decades of election promises from nearly every political party, little progress have been made because of systemic “inertia.”

The year 1942 was a critical year in Canada's medicare system: The federal government signed the Atlantic Charter on New Year's Day – envisioning a post-war world free of disease, hunger and war. Tommy Douglas became head of Saskatchewan's Co-operative Commonwealth Federation (CCF) – the predecessor to today's New Democratic Party – leading the party to victory within two years, and creating the country's first public health care system.

But 1942 also saw the first in a long line of health commissions – all of which would call for a universal drug insurance to offer affordable medicines to Canadians, as part of a public health system.

Dubbed the 'Heagerty Commission' after its chair, the Advisory Committee on Health Insurance's findings were never heeded – the beginning of a chain of inquiries and commissions which recommended pharmacare but were ignored.

Price of drugs double that of the U.S.

“Today, we have patchwork of coverage,” Law said. “In B.C., technically no one is uninsured – but Fair PharmaCare only covers you if you spend a certain percentage of your income on drugs.

In fact, although brand name drugs tend to be slightly cheaper in Canada than the U.S. – and the government regulates prices based on international averages, Law explained – generic medicines are substantially more expensive than the U.S., and among the highest in the industrialized world.

One comprehensive study of drug prices (PDF) found that generic medication costs more than twice as much in Canada as the U.S. Examining the 27 most popular drugs, the 2002 Palmer D'Angelo Consulting Inc. study found that some generics cost up to a staggering six times more here.

That study argued the costs were driven by a lack of competition amongst pharmaceutical companies in Canada – the entire market being dominated by two giant corporations, Apotex and Novopharm (now Teva) – as well as federal and provincial over-regulation.

But critics argue that the pharmaceutical industry is able to charge exorbitant rates because they have too much influence on government.

“We have some of the highest drug prices in the world – and we have the lowest public funding for prescription medicines within the (Organization for Economic and Co-operation and Development, OECD),” said Colleen Fuller, co-founder of PharmaWatch, an national advocacy group on medicines. “We have the highest generic drug prices, the second-highest brand name prices, and one of the lowest levels of public funding.

“These are huge problems,” she added. “The lack of public involvement both in funding and monitoring drugs means that, not only are people exposed to a much higher risk when they use prescription medicines, but they're paying a much higher price than they should be paying.

“The industry has huge tentacles in government both nationally and provincial... What they want is more drugs on the market, they want them approved quickly, they want to be able to charge the highest price that they possibly can, and the government should just butt out. All they care about is money, and that is the bottom line.”

What Fuller and some other activists would like to see is not simply a universal pharmacare plan – but for Canada to get back into the business of researching and manufacturing cheaper medications.

She cites the example of the publicly-owned Connaught Laboratories, which was created at the University of Toronto in 1914 to fight an outbreak of diptheria – a disease known as “the strangler” and the leading cause of death among children. The labs went on to become the world's first insulin producer, but in 1984, Brian Mulroney's Conservative government privatized Connaught and today they have been merged into the pharmaceutical giant Sanofi-Aventis.

“Now, we don't make a drop of insulin in Canada, even though it was discovered here,” Fuller said. “All of the insulin in Canada is provided by foreign corporations – our own legacy being totally betrayed by the federal government.

“We have to put that to the Conservatives, because they're the ones who caused that to happen. It's a disaster – we're paying some of the highest prices for these kinds of vaccines, as a consequence of these public policies. We need a public manufacturer in Canada that's accountable, that works in the public interest, and is not charging an arm and a leg for medicines that we need.”

Fuller worries that Canada's ongoing negotiations for a free trade agreement with Europe – the Comprehensive Economic and Trade Agreement (CETA) – will fuel a race to the bottom for drug standards and prices, already underway through Conservatives' attempts to reform Canadian drug regulations. She said that pharmaceutical companies have gained a seat at the government table – while citizens advocacy groups are sidelined.

“It's all being done behind closed doors, and industry is actually sitting down with them to figure out how to change the regulations,” she said. “Who's sitting with Canada at the table? It's the drug industry, the asbestos industry – there are no citizens at the table at all, in discussions.

“So they have a huge influence over the decisions being made at the trade table, as well as at the domestic policy table.”

Maude Barlow, national chairperson of the Council of Canadians, told the Vancouver Observer that CETA poses a major threat to Canada's already weak drug price regulations – allowing companies to extend their patents for years longer, and thereby delay the creation of cheaper generic versions.

“The immediate issue around CETA is we have to agree to align our pharmaceutical patents to the European ones – which are much more in favour of the transnational drug companies – and their patent regime,” Barlow said. “That would increase our drug prices by about $3 billion a year.

“CETA applies to not just the federal government but provincial and municipal governments. That immediately offsets any kind of cost-cutting you might want to do for health care.”

Dr. Law agreed that pharmaceutical companies exert a major influence on drug prices and government regulations – but believes that Canada does, in fact, play an important role in regulating prices.

“There's a lot of inertia when you have a system involving $30 billion, and involving a lot of companies and manufacturers that make a lot of money,” he said. “The people who can't afford their medication, unfortunately, don't have a vocal lobby group.

“There's people not taking their drugs for a whole range of cost reasons. They tend to be the poor, the sick and the uninsured. They're not a powerful political lobby group.”

Currently, Law said, one of the governments' main strategies for lowering prices includes negotiating with manufacturers to cut their rates – in exchange for adding their drugs to lists of insurable medications.

Law made a distinction, however, between costs to the medical system and governments, and how much consumers actually pay for drugs over-the-counter. The latter costs are driven up by wildly varying pharmacy dispensing fees – which range from $4 to $14, he said – and differences in people's health insurance coverage.

David P. Ball
Vancouver Observer
Posted: Jan 20th, 2012
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Sorry for your loss - here's your bill

In the US health system, "nobody pays the sticker price, except for those who are squeezed, which is normally the uninsured," says Steve Morgan, a health policy analyst with the University of British Columbia's Centre for Health Services and Policy Research.

With the family of deceased Canadian skier Sarah Burke facing a U.S. medical bill topping the value of an average Calgary home, I was reminded Friday of a quote by the late Justice Emmett Hall, a crusader for Canada's public health-care system.

"We as a society are aware that the trauma of illness, the pain of surgery, the slow decline to death are burdens enough for the human being to bear without the added burden of medical or hospital bills penalizing the patient at the moment of vulnerability," Hall wrote in a 1979 review of publicly funded health insurance.

To help Burke's husband Rory Bushfield pay an expected $550,000 medical bill for nine days of intensive care in Utah, a website was set up by Burke's agent asking for donations. The site had reached nearly $200,000 as of this writing Friday afternoon, prompting the Canadian Freestyle Ski Association to announce that the amount was enough that her family "will not have any financial burden related to her care."

The association's statement seemed odd, considering that the website was $350,000 short of its intended goal, but not if you understand the vagaries of a private health system dominated by big private insurers.

In the U.S. health system, "nobody pays the sticker price, except for those who are squeezed, which is normally the uninsured," says Steve Morgan, a health policy analyst with the Uni-versity of British Columbia's Centre for Health Services and Policy Research.

"Big insurance doesn't pay retail," Morgan says of the U.S. health system. Typically, he says a hospital will present a bill big enough to choke a horse and the insurance company will negotiate it down. Individuals without insurance, or those who are under-insured, have little or no negotiating power and often end up paying bills that are financially devastating, Morgan said.

Burke was apparently not adequately insured in the U.S. Her ski association only covers sanctioned events. Because the event at which she was injured and subsequently died was an unsanctioned competition put on by her sponsor, Monster Energy Company, the ski association's insurance did not cover her.

It was not clear if Burke's family thought she was ad-equately covered, or if Monster had insurance for her. The company did not say if it would help cover her medical bills, which Morgan says is not surprising.

Monster, he said, could have negotiated behind the scenes to get the price down. The Canadian Freestyle Ski Association said the family had not yet received a final bill for her hospitalization, but that it is expected to be approximately $200,000, roughly the amount that had already been collected.

Morgan says Burke's case should be a sobering reminder to Canadians of what could happen in a privately-insured market, rather than a public system where everyone is insured against a catastrophic event.

In 2000, the U.S. health policy journal Health Affairs wrote about the issue under the heading "Gouging the Medically Uninsured: A Tale of Two Bills."

"Overcharging the uninsured is one of the many unintended and largely overlooked results of our decade-long obsession with curbing health-care costs," it said. "Powerful interest groups - government, employers, insurers, hospitals, medical equipment vendors, and health care professionals - have fought vigorously to protect their interests. The uninsured, with no organized voice, emerge as losers."

Since 2001, family health insurance premiums in the U.S. have increased 113 per cent, according to the Kaiser Family Foundation, with annual premiums for employer-sponsored family health coverage growing to $15,073 in 2011. Due to the economic downturn, the number of Americans going without insurance has grown by one million to 49.9 million people.

We complain of health-care costs and outcomes in Canada, but the U.S. ranks behind Australia, Canada, Germany, the Netherlands, New Zealand and the U.K. in five areas of health system performance: quality, efficiency, access to care, equity and mortality, according to a report by the Commonwealth Fund.

"Our failure as a country to ensure basic health care for all of its citizens is in part to blame," Glenn D. Braunstein, chairman of the Department of Medicine at Cedars-Sinai Medical Center in Los Angeles, wrote Friday in the Huffington Post.

It is, indeed, a sobering reminder to Canadians how lucky we are. As one commentator wrote of the Burke family's experience with the U.S. system: "We are sorry for your loss. Here's your bill."

By Robert Remington
Calgary Herald
January 21, 2012
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Rising salaries story the stuff of nightmares for health ministers

As the reality of the new Canada Health Transfer sinks in – a redistribution announced by Ottawa last month that cuts the rate of growth over the coming decade – the provinces are suddenly keen to craft a strategy to curb the interprovincial competition for health-care workers, a competition driven by the salaries of health-care workers.

Labour costs are the single biggest factor in health-care budgets. In B.C. they make up 62 per cent of the $12.6-billion annual budget. The trick will be persuading wealthier provinces, like B.C., to abandon the practice of buying their way out of labour shortages.

Robert Evans, an economics professor at UBC’s Centre for Health Services and Policy Research, is skeptical about the ability of the provinces to tackle the problem so long as the Harper government refuses to get involved. “What you need to do is develop interprovincial agreements about how much you are going to pay – it has to be binding, with financial teeth.”

Globe and Mail
Fri Jan 20 2012
Page: S3
By: Justine Hunter
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Opinion: An argument for more health care funding that’s getting old

B.C. will have far more seniors by 2036, and so will the other provinces

Here’s a few notions British Columbians like to believe about the elderly and health care here:

• More than any other province, B.C. is top-heavy with the elderly.

• B.C. attracts a huge number of retirees from other provinces and overseas.

• Those out-of-province retirees are a massive burden on B.C.’s health care budget.

• Seniors constitute the greatest burden to the health care budget, and represent the greatest threat to its financial solvency.

As I wrote, these are popular notions.

And none of them are true.

But they do form the basis of the provincial government’s argument against the federal government’s new per capita funding formula for health care.

The province argued this week that the new formula should allow for certain demographic imbalances. In B.C.’s case, the province argued, it meant taking into account our growing number of seniors — a number, it maintains, that is problematic because of seniors coming here to retire.

“It means that provinces with more seniors, provinces where people come to retire like B.C.,” Premier Christy Clark said, “are going to be really struggling, while provinces full of young people, where people use health care a lot less, are going to have an abundance of money.”

B.C. does have a high percentage of seniors, and that percentage is growing. But that percentage is nothing out of the ordinary. In terms of an aging population, B.C. is right in the middle of the pack.

In descending order, Saskatchewan, Nova Scotia, Prince Edward Island and New Brunswick all have a greater percentage of seniors, while Quebec’s and Manitoba’s percentages are virtually identical to B.C.’s.

Nor will B.C.’s ranking change much.

According to figures supplied by BC Stats, projections for the percentage of people over 65 in 2036 show, again in descending order, Newfoundland, New Brunswick, Nova Scotia, Prince Edward Island, Quebec and Saskatchewan all having a greater percentage of seniors than B.C. In that year, according to the projections, 23.7 per cent of our population will be 65-plus. It is, at present, 14 per cent. From now to 2036 that is significant demographic growth but, again, it is nothing out of the ordinary in comparison to the rest of the country.

But what about that flood of inter-provincial migrants retiring in B.C. for our balmy weather?

It’s no flood. From 2000 to 2010, 37,000 inter-provincial migrants over the age of 65 moved to B.C.

But during that same decade, 28,500 of us over the age of 65 moved out of B.C. to other provinces.

That leaves B.C., for the last decade, with a net total of 8,500 inter-provincial migrants over the age of 65. In a population of 4.5 million, that figure is demographically negligible. To quote a 2008 BC Stats paper looking at inter-provincial migration:

“It does not appear inter-provincial migration is a significant factor in increasing the age of B.C.’s population.”

As for international immigrants aged 65 and over coming to B.C., the numbers are “tiny,” said BC Stats executive director Angelo Coco.

So, given these facts, where does that leave B.C. when it comes to the new per capita health care funding imposed on it by the federal government?

It leaves it in the same predicament as most other provinces — struggling to control costs. And while the half-dozen health care academics and policy analysts interviewed for this column all agreed that health care for seniors was, per capita, a greater burden for health systems, and that some demographic weighting of the funding formula might ease that burden, they also suggested that care of the elderly was not the greatest reason behind rising costs in the health care system.

They cited the public’s higher expectations, the discovery of new treatments, a proclivity for more tests and scans, high pharmaceutical costs, rising salaries — and backdropping them all, the lack of political will among provincial governments to put on the brakes.

“[The] wealth of the province or nation” wrote Craig Mitton, associate professor at the University of B.C.’s School of Population and Public Health, “is the main driver of expenditure.

“Putting on the political brakes, so to speak, with the federal announcement in December is in my view very positive because it forces the flattening of the cost curve, which, left to their own devices, the provinces have struggled to do. The point here is that it is not aging or technology but political will that controls the rate of growth of expenditure.”

Mitton’s colleague, associate professor Kim McGrail, a health economist with UBC’s Centre for Health Services and Policy Research, released a 2011 study that found the expectation of a “grey tsunami” overwhelming the health system in B.C. was overblown. Rising costs weren’t driven by the numbers of seniors so much as by the kind of health care they had come to expect.

“The real increases,” McGrail said, “are driven by a more intensive health care, one where seniors are more quick to get tests and imaging done and where they see more specialists.”

Nor are seniors the only demographic that deserve special consideration. Prof. John O’Neil, dean of Simon Fraser University’s Faculty of Health Sciences, argues that the funding formula could be amended to funnel more money to disadvantaged aboriginal populations, or the working poor, or to provinces where population levels are so low they might find it hard to maintain the level of services the richer, more populous provinces can supply.

“I think flattening the payments may bring changes to provincial budgets, but it may also bring changes in those provinces that are struggling to fund the way health care is delivered — resulting in privatization, maybe, or a two-tiered health system.”

That, O’Neil said, was the real concern, where the delivery of health care fractures not along young and old, but by have and have-not.

By Pete McMartin
Vancouver Sun columnist
January 18, 2012
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Mutual enemy unites provinces

Focusing on a common enemy is an effective unifying ingredient, whether it bands together members of a sports team or supporters of a revolution.

Presently, it has unified Canada's provinces in their displeasure over what they view as federal Finance Minister Jim Flaherty take-it-or-leave-it offer regarding health transfer payments.

According to The Canadian Press, premiers attending meetings Monday and today in Victoria were unanimous in their calls for Ottawa to change its proposed per-capita health funding formula. The provinces say it doesn't take into account the growing number of seniors, whose health-care costs increase as they age.

"Equal funding is not necessarily equitable funding," Nova Scotia Premier Darrell Dexter said in a Canadian Press story Monday. "This is the problem. We have 16 per cent of our population currently over the age of 65 in our province. We're going to move from 16 per cent over the age of 65 to almost 30 per cent over the next 20 years."

B.C. Premier Christy Clark echoed that view, noting that without changes, "Otherwise what we will see is a system where we're not able to support seniors care across the country."

The issue of the growing seniors population is, of course, an important part of any discussion about the future of Canada's health care. The provinces have reason to be concerned since they're the ones who must provide the front-line care that seniors require. If the federal government skimps on holding up its end of the health-care load, it means a greater burden falling onto the shoulders of the provinces, and not all provinces have the economic muscle to bear a heavier load. Even the "have" provinces are facing an increasing challenge with respect to health care.

Flaherty's health transfer plans are to continue increasing the payments at six per cent annually until 2017, after which they will be tied to the rate of economic growth and inflation, though Ottawa promises not to let the payment increases drop below three per cent. But more than the plan itself, the provinces took exception to what they viewed as Ottawa's unilateral approach. As Quebec Premier Jean Charest suggested, in a federal system of government, there should be a dialogue on such matters.

He's right, of course. If the goal is to improve Canada's health-care system, it will require discussions by all the major partners in that system - namely, the provinces and territories. The discussions should include all aspects of health care, including the drug system, which appears to lack affordability for some members of society, according to a new report in the Canadian Medical Association Journal.

The report, based on findings from the 2007 Canada Community Health Survey, indicates that almost one in 10 Canadians don't always fill a prescription because of the cost. That "saving" actually produces other health-care costs farther down the road such as the need for acute care.

The study noted that about two-thirds of Canadian households incur out-of-pocket expenses for prescription drugs each year because they don't have a private or public insurance drug plan.

One of the researchers, Dr. Michael Law of the Centre for Health Services and Policy Research at UBC, said the findings are timely in view of the premiers' meeting this week in Victoria. "The country's 13 provincial and territorial premiers should focus on how to address this disparity to improve access to prescription drugs for all Canadians," he said in a news release.

This is just one of the health-care issues that must be addressed. The provinces appear unified in their desire to push Ottawa to help craft a better health-care system. A unified approach is what it will take.

Tuesday, 17 January 2012
Lethbridge Herald Opinon
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Roundtable on health care in Victoria

So here we are in sunny and snowy (which is rare, I'm told) Victoria, B.C. for the Council of the Federation meeting. The first ministers from across Canada are arriving in Victoria tonight and tomorrow morning to discuss the 2014 health-care accord and likely decide what their response is going to be to a federal government who is calling for accountability in health care from the provinces but walking away from their own responsibilities.

This morning Maude, Ava (B.C. Regional Office) and I joined with pro-medicare allies and Health Care Critic Libby Davies at a roundtable conference on health care.

The roundtable included presentations by Dr. Kim McGrail (University of British Columbia) and Marcy Cohen (CCPA) on the myths of health care in Canada. Kim looked at the financing versus delivery side of health care and using data from CIHI and Statistics Canada, she countered several myths:

1. Myth: Canada is spending too much money on health care.

Fact: Canada is a relatively low funder of health care when shown with comparator OECD countries. Canada needs to restructure the delivery of health care -- by moving to community clinics, team-based practices, setting up a national pharmacare program, etc. -- so that we make the most of the money we put into health care.

2. Myth: The aging population is consuming all of the health-care resources.

Fact: The aging population contributes to a 0.8 per cent increase in funding expenditure. The real growth in health-care spending comes from an increase in the use of health care overall, especially in expensive areas such as pharmaceutical drugs, new technologies and keeping people in hospitals beds instead of providing them with more appropriate continuing-care options.

3. Myth: Everyone in Canada pays the same amount for health care.

Fact: Those who are sick and in poverty pay more because of services not covered by medicare (i.e., prescription drugs, home care) than those who are healthy. Because of the social determinants of health, it is more likely for people living in poverty to fall ill and therefore they are often paying more for non-medically necessary services because they use them more often.

Mary Cohen gave a background on the 2004 health accord and highlighted several shortcomings which include:

1. The funding for target areas such as continuing care and primary care was never tracked and therefore it's unclear where the money was spent.

2. The plan for a national drug strategy fell in 2006 (the same year the Harper government came to power).

The area that was met was the reduction of wait times and this is likely because of the federal push to reduce wait times and track spending. When the federal government pushed the provinces and allocated appropriate funding, wait times were reduced.

Cohen suggested that we need more accountability across services. All health-care professionals should feel engaged in their workplace and accountable for their decision-making (including prescribing practices, etc.). This has been shown to happen in community clinics where health professionals are engaged in decision-making more broadly.

Additionally, Cohen argues that we need integrated and shared budgets across services so that funding follows the patient throughout their health-care experience.

What I have really taken away from the meeting today was just how in agreement the pro-medicare community is with one another. People in the room talked about the need for community care centres, pharmacare, continuing care, prevention and wellness programs. We agree on where the problems and challenges lie and that the private for-profit sector is driving our health-care costs and therefore we need to invest in public health care where costs have remained stable for over three decades! And finally, we agreed on the need for federal leadership for the next health-care accord. The federal government is responsible enforcing the principles of the Canada Health Act, which ensure accessibility, portability, comprehensiveness, public administration, and universality of the medicare system. And we agree that medicare needs to be protected, strengthened and extended.

The NDP promised to campaign more strongly on medicare and the 2014 accord. I hope it's a promise they'll keep; we need and invite all voices to stand up to Harper and demand federal accountability in health care now and for the next accord.

By Adrienne Silnicki
January 16, 2012
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