Value for Money in Health

The Conference Board is having a Summit on Sustainable Health and Health Care October 30^th and 31^st in Toronto featuring a plethora of media, industry, health service and academic experts who will focus on the need to refocus the health system “from treating acute illness to preventing and managing chronic disease so governments, healthcare leaders and businesses need to combine forces to help all Canadians lead healthier lives.”  They will discuss the transformation of health care, inequalities in health care, workplace wellness initiatives, health management, intelligent funding, end of life decisions and health and the social media revolution.  It all sounds like a really swell time.  There will probably even be a couple of nice meals and lots of social networking. Here what they should also be discussing – where is the value for money in Canada’s health care system? 

As I have outlined over my last two OECD health data spending posts, Canada is one of the world’s biggest per capita spenders when it comes to total health spending – the sum of both public and private.   Indeed, both public and private health spending have grown in tandem over the last few decades. In US PPP$ in 2010 for the 34 OECD countries, Canada ranks seventh in terms of total health spending per person.  Yet, it comes to physicians per capita, it ranks 26^th.  We rank 25^th in the number of total hospital beds per capita, 25^th in the number of nurses per capita, 21^st for CT scanners and 20^th for MRI units.  While we are in the top ten per capita spenders, we are never in the top ten for any of these five health care resource indicators.

Are we at least in the forefront when it comes to health outcomes?  When it comes to life expectancy at birth, we rank 13^th at 80.8 years.   Japan, which ranks 19^th in per capita total health spending, is first in highest life expectancy at birth at 83.0 years. As for infant mortality, Canada’s is in 27^th place at 5.1 deaths per 1,000 live births.  Meanwhile, Iceland is in first place at only 2.2 deaths per 1,000 live births – but ranks 16^th in the amount of per capita total health spending.  In terms of obesity, we are also a world leader with one of the largest percentages of total adult population with a BMI greater than 30.  The least obese OECD country is Korea which also ranks 27^th in terms of the amount of total health spending per capita.  When it comes to suicides per 100,000 population, we rank 13^th at 11.1 per 100,000 population.  The lowest numbers of suicides per 100,000 of population is Greece but ranking 22^nd in terms of health spending.  When it comes to overall cancer mortality rates, the OECD data shows the lowest rates are in Mexico, Sweden and Israel but Canada ranks in about the middle.

I suppose you could make the case that these comparisons use very aggregated data and that given the social, cultural and economic differences even amongst the developed OECD countries, we are comparing apples with oranges. Moreover, Canadians are very satisfied with their health care system.  Indeed, the OECD numbers also show that when it comes to self-reported health status, Canada ranks very highly in terms of the proportion of population aged 15 and over reporting that they are in good health (3^rd highest in fact).  If we feel so good about our health status, how can one argue that we are not getting value for money in our health care system?

Yet, I am still perturbed by the results of these comparisons. Borrowing a line from the Globe and Mail, it is indeed our time to lead when it comes to health care but we seem to be leading in the wrong way.  We spend a lot, buy relatively less in the way of health system resource inputs and do not get as much in terms of health outcomes.  Where is our value for money?  Granted, when it comes to life expectancy we are doing well – we get 80.8 years.  But why does Japan get an extra 2.2 years (2.7 percent more years) while spending $1,410 per person (32 percent) less?  As for infant mortality, we are really not that much higher than most countries and we are certainly not Mexico or Turkey.  On the other hand, Iceland had an infant mortality rate that is 57 percent lower while spending 26 percent less per capita on total health spending.  It is not that we have a poor health care system.  Our outcomes are good on a world scale but relative to the OECD as a comparison group we could do better.  How do we do that while also spending less?

Comments

[Ryan]

It is worth noting also that Canadians consistently self-report dissatisfaction with their healthcare system.

[Patrick]

Ryan: Really? Source please. Two seconds with google suggests this is not the case: http://www4.hrsdc.gc.ca/[email protected]?iid=7

[Ryan]

Really Patrick? I don't think there's any point to playing "duelling Googles" here, but here's a link to a search string for "canadians dissatisfied with health care," and I will note that while not every link supports my remark, sufficiently many links do to justify my having said it:
https://www.google.com/search?q=canadians+dissatisfied+with+health+care&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-GB:official&client=firefox-a

This Paul Krugman hilarity is famous: http://www.youtube.com/watch?v=3EPd2i4Jshs

But, like I say, why sit around comparing Google results? Kind of silly/childish.

[Joseph]

I wonder about a few things. These are ideal speculations, and so maybe more informed readers can rebut them.

1) Our medical professionals seem to be paid more than GDP alone would predict (http://economix.blogs.nytimes.com/2009/07/15/how-much-do-doctors-in-other-countries-make/). Maybe this could be a line of attack?

2) I wonder about shifting patients from high cost emergency rooms to 24 hour urgent care clinics as a model. MD offices are often open 9 to 5 (Monday to Friday) which is often completely sub-optimal for when I actually might need to see a doctor. Or, even better, a much lower wage nurse could deal with a lot of concerns. Ironically, my experience with walk in clinics was worse in the United States than Canada (where it became a mess to decide if your insurance would work at any specific clinic).

3) What about public health? If obesity is an issue, perhaps the solution is to look for ways to improve public health and thus prevent diseases. While all public health measures involve regulation and loss of freedom, it's probably a good thing we are no longer free to dump chamber pots on the street. :-) Is there room to improve here?

Not sure, but these are the ideas that come to mind.

[Bob Smith]

The cross-national comparisons of spending or outcomes are always a bit tricky, at least as a method of assessing the efficiency of health care spending because it's almost impossible to tease out the extent to which health care spending differs as a result of country specific factors. No doubt, for example, the average life expectancies of Americans and Canadians are driving down by the tendency of Americans to resolve disputes with small caliber weapons and the existence in Canada of a large underclass of Aboriginal Canadians living in poverty. But that tells us little about the efficacy of their health care systems (frankly, the US health care system is probably the best in the world at patching up gunshot victims, if only because of the practice). Once you sort out all the social, cultural, dietary (surely the fact that the iconic American food is coke and the iconic Japanese food is sushi goes some way to explaining differing life expectancies), it's hard to get anything useful out of the international comparisons.

That isn't to say we can't achieve the same results for less (or better results at the same price), but I think you have to do that analysis at the micro level. What are the best practices internationally, and how can we experiment with them in Canada to find out what might work best for us? What we really need is more policy flexibility and experimentation in Canada, which requires (a) political courage and (b) possibly a liberal interpretation (if not repeal) of the Canada Health Act (although not neccesarily, the Canada Health Act is pretty gutless and probably doesn't provincial governments as much as people think it does).

Patrick, Ryan,

I wouldn't give any weight to any of those surveys. If the only health system you've been exposed to is the Canadian one, what does it possibly mean if you say that you're satisfied/unsatisfied with it? You've got nothing to compare it to. It's like being asked if you're satisfied living on planet Earth.

[Determinant]

Joseph has excellent ideas. Doctors IME don't like to have their pay and professional aura attacked. But with little competition, the only things restraining their pay are provincial public servants, the policies they implement and pay deals for doctors they negotiate.

[Shangwen]

Joseph, those are all good comments. You're in the US I think--those things have been tried with mixed results.

1) MD pay: every year congress goes through the "doc fix" kabuki theatre, where they promise to slash med remuneration in line with the excess spending in Medicare. Every year it gets waived (info here).

2) The financial impact of ER overuse has been shown to be minimal; standard triage processes minimize the cost of relatively trivial complaints in the ER. Urgent Care clinics are now widespread but I'm not aware of evidence that they reduce costs or improve efficiencies.

3) Public health/epidemiology: this is an interesting one. As a cost-driver cluster, epidemiologic shifts are a mix: yes some illnesses increase, but others decrease or are mitigated. Obesity and diabetes are the biggest ones, but their actual impact on health costs appears to be minimal (excluding larger social costs of productivity, etc.). Moreover, the only demographic factor that really seems to be a health-costs driver is ageing, and even that only in a very limited sense with regards to long-term care and a few other things. As a demographic group, the elderly as a whole are way outranked as health care consumers by pregnant women and the dying.

The agenda for this conference actually looks pretty good (mind you, the $1700 admission did not, though I considered it). I would have expected a lot of elite bourgeois skirt-clutching about fat kids, the "tsunami of chronic illness", and the "stigma of mental illness", but there are only a couple of epi issues discussed, and the rest is real policy stuff. The biggest impact on sustainability is not candy bars or old people, it is taking a tougher stand on things like health care wages, technology costs, and eliminating ineffective programs (which do exist).

[Livio Di Matteo]

"elite bourgeois skirt-clutching about fat kids"

Well, that definitely makes the grade as my phrase of the week. Thanks Shangwen.

[Determinant]

Speaking of value for money, as an NDP member I believe the last expansion of public spending needs to be pharmacare.

I repeat as a Type I diabetic insulin matters more to me than a doctor's advice, but a doctor's advice is paid for through OHIP and insulin is not. This is wrong.

[Patrick]

Ryan, why the attitude? I was making a sincere point. And the study I pointed to is a serious study, not a youtube video and some flip remarks. Can you point to a serious study that supports your claim? This is a perfectly reasonable request, given your original claim.

[Patrick]

Bob: fair point.

[Shangwen]

@Bob: generally correct, the cross-national info is not useful for drawing hard conclusions. But there are obvious discontinuities when the US and Canada have very different spending levels but similar population-level health. Now, before I light the incense and prostrate myself before my relic of Tommy Douglas' hair clippings, I will note that, if you factor out small and abnormally rich countries (Norway, Luxembourg), Canada is 2nd in the OECD in terms of per-cap spending, yet compared to Japan and France we suck. Same discontinuity. The France-Canada difference could, I think, be explained largely by differences in wages and payment systems. The Canada-US difference is a combination of wages, overhead, and overall per-cap consumption.

@Livio: you're welcome!

[Robillard]

I'm not sure about Korea, but based upon conversations I had with a former expatriate, it's my understanding that in Japan, if you are overweight, you are required to get help to get your weight down. Employers keep records of their employees' physical traits, i.e. weight. Your employer could possily face fines if you don't comply, and your co-workers might apply unpleasant social pressure until you "get your rear in gear".

I'm not sure Canadians are ready for the sorts of invasions of privacy that might be needed to add a few more years of life expectancy to their lives.

[Shangwen]

@Robillard: I was a little incredulous, but here is one article that seems to support what you heard. I wonder if the term self-employed will become a pejorative euphemism in Japan for being fat (as in, "Make way for the self-employed guy" in the Tokyo subway rush).

@Determinant: the problems with the pharmacare debate (and here I assume you mean national pharmacare) is that (1) it generates surprisingly little interest among the public (you only hear it mentioned as a base-pleaser for the left, not as an effort to win swing voters), and (2) it's national rather than provincial. There are no real national health programs. One then has to wonder why the provinces aren't gunning for it. Could Quebec's beloved welfare scheme for some of its most cherished corporate citizens play a role? (And behold! I quoted a left-wing source!)

[Bob Smith]

Shangwen: "I will note that, if you factor out small and abnormally rich countries (Norway, Luxembourg), Canada is 2nd in the OECD in terms of per-cap spending, yet compared to Japan and France we suck. Same discontinuity. The France-Canada difference could, I think, be explained largely by differences in wages and payment systems. "

I wouldn't disagree that other countries have better systems than we do, or at least elements that are better than ours all I'd say is you have to look at the systems, not the outcomes. Certainly I think we could stand to learn a lot from countries like France or Sweden (who aren't bound by the doctrines of Saint Tommy) on how to run health care systems. The sad thing is that, in many respects, the health care systems of both Canada and the United States are outliers among developed countries, but for too many Canadians any reform is an attempt to impose "US-style" (I hate that expression) health care. Until our policy discussions start looking beyond North America

[Jacques René Giguère]

@Shangwen: do provinces think as far as "pharma are in QC, so let's not have pharmacare!" I strongly doubt so. And I have no sympathy for the abominable subsidies they enjoy ( and they close their labs anyway...)

@Bob Smith: but we know that most changes would be on the american model. The corporate interests that promote it through their paid media are clear on that.

[Determinant]

@Determinant: the problems with the pharmacare debate (and here I assume you mean national pharmacare) is that (1) it generates surprisingly little interest among the public (you only hear it mentioned as a base-pleaser for the left, not as an effort to win swing voters), and (2) it's national rather than provincial. There are no real national health programs. One then has to wonder why the provinces aren't gunning for it. Could Quebec's beloved welfare scheme for some of its most cherished corporate citizens play a role? (And behold! I quoted a left-wing source!)

Part of the Health Transfer from Ottawa is specifically for "Catastrophic Drug Coverage", for which there is zero enforcement, achingly bureaucratic applications at the provincial level and in Ontario a provincial program that can't even decide when it will start to cover things for not if you have employment-based coverage.

In short, it is a nonsense program with zero results, spotty coverage and unclear objectives.

I want Quebec's program to go national, or ten provincial programs with federal funding. No need to beat up on Quebec or any other province. Remember, imitation is the sincerest form of flattery, Jacques.

Quebec's simultaneous priorities for local manufacturing protection are a local Quebec issue and beside the point, for me.

[Shangwen]

@ Bob/Jacques/Determinant: I'm not beating up on Quebec, nor asserting a firm (conspiratorial or public-choice-ish, take your pick) theory for the politics of pharmacare. What is more intriguing to me is that, despite the left-wing or nationalist convention that Canadians have some deep-seated love for health care (please!) and tie their national character to it, the lack of full public insurance for medication and dentistry does not seem to be a big political issue. If you believe the narrative, there should be huge, compelling demand offering all politicians a great opportunity. Yet that is not the case. Why?

@Bob: to be in America's backyard is a great blessing, despite what Saint Tommy might have said. Yet it's also true that, for healthcare and other fields, we're also an hour away from the premium job market. Some of the best policy help we can hope for is assertive action in the US to bring down labor costs, which are steeply higher than the Canadian equivalents. If that happens, it will help us either by reducing the greener-pastures arguments, or more likely by setting a very different tone about spending priorities.

@Livio: the Globe is a yawner. Their "time to lead" pieces should be called "time to rehash" or "time to praise median platitudes". Even if we factor in the very tenuous link between health care and health (most assertively optimistic estimate: 50%, and he's on the defensive), other countries (Germany, Korea, Finland) clearly have better outcomes and spend less money. Not only that, they have a very different mix of market and government options for consumers. If more people (including journos) knew just how much health care in Canada was actually "private", they might be a little less terrified of a better policy mix.

[Determinant]

Shangwen:

My comments on Quebec were more directed at Jacques, not you.

Tommy Douglas had a great idea, but his implementation was lousy. The NHS in the UK, his inspiration, covered drugs and dentistry at its implementation in 1948. It still covers drugs but its dental coverage is spotty.

I am tempted to think that Canadians a generation ago were disposed to think Health Care = Doctor/Hospital. They loved to be "doctored". It is a hard thing indeed to rid them of that image. My grandmother is a prime example of this.

I have been in the system long enough with Diabetes to know that doctors are not all they are cracked up to be. With the Internet today, we have much more information that is easily accessible to patients so that they can be more informed if they do visit the doctor, and have a good idea about the limitations of what the doctor can do for their problem.

It boggles my mind about the huge disconnect Canadians have over drugs and dentistry, but I can't explain it. We don't take a holistic view of health. Long-Term Care is another issue, but there is a free lunch there in the form of LTC riders on workplace disability insurance policies. More LTC insurance riders means less people who have to be taken care of out of public funds.

[Jacques René GIguère]

@Determinant: yep, we don't take a hlistic view. As my college union representative on insurance, it boggles me that the insurance wion't pat for a trhree-month cleaning fot periodontic patients yet pay for dental durgery every two years.

@Bob Smith: that industrial policy is bad gor QC, CN and my members. As for the G&M, their ecological role is to provide employment to 10th rate thinkers who write pretenfd humor pieces mistakenly published. Sorry that deputy ministers read them.

[Determinant]

I read La Presse online daily to practice my budding French skills. They have had their share of ridiculous excuses for articles and editorials.

There is a spy scandal in Halifax and the accused just plead guilty. I looked forward to reading it in French on La Presse after reading about it in English on the Globe & Mail. Alas, no such luck. I can't understand it either, La Presse usually loves a good chance to rake muck. It's got everything that presses reader's buttons: Spies, Russians, the Navy, a traitor getting his just desserts, etc.

[Determinant]

@Determinant: yep, we don't take a hlistic view. As my college union representative on insurance, it boggles me that the insurance wion't pat for a trhree-month cleaning fot periodontic patients yet pay for dental durgery every two years.

As a person who used to sell insurance, the answer is that high-frequency, low claim amount that everyone uses offers little in the way of risk and therefore little chance of profit for an insurer. The premium usually winds up being very near the cost of paying for it individually so employers don't go for it.

Quebec doesn't give a tax concession to group insurance plans anymore in its provincial system, AIUI, though the Feds do. Group drug and dental coverage is a tax strategy as much as it is insurance, as the premiums are deductible and the benefits tax-free to employees. Without this treatment group drug coverage would be on life support in the private sector.

I used to sell group benefits plans, believe me the tax considerations are front and centre.

Disability insurance, OTOH, receives no favourable tax treatment whatsoever and the policies contain a good deal of insurance, that is premium discount from stated benefits. More risk, more reward.

[Shangwen]

@Jacques Rene/Determinant: "holistic view"

What is that? I hear this all the time in criticisms of health care. I understand that systems can provide one thing and not do a great job at certain kinds of follow-up, like remove a tumor and radiate the tissue, but not provide support and rehab, but that kind of thing is more medical error than systemic failure. Not everyone wants the whole suite. I've been involved in plenty of program reviews where there were arguments about providing "comprehensive" or "integrated" care. Yet the majority of people just seem to want their surgery, prescription, rehab sessions, etc. and will say no to all the follow-up available. There's a lot of wraparound care available that people decline. Is this a failed system or do we romanticize the power of health care to fix things? I agree with good policy and system design, but disagree with spending money on low-return extra services. Primary care is not babysitting.

[Determinant]

Paying for an endocrinologist on the public tab while not picking up the insulin is insane. The paying for the insulin but not the doctor is actually more defensible, probably cheaper and would save more lives.

Picking the lowest-cost, most effective solution, whether it be a doctor, nurse, or just regular pharmaceutical intervention, is what I mean by holistic. Treating doctors one way and drugs another just because they are doctors and drugs is silly.

I'm actually advocating for the cheapest off-the-shelf strategy, by itself, regardless of whether it is a doctor or a drug. But we treat doctors with great care and drugs indifferently.

Diabetes benefits very strongly from an integrated care model because each change affects diet, lifestyle and insulin regime but that is a diabetic peculiarity.

[Bob Smith]

JRG"@Bob Smith: but we know that most changes would be on the american model. The corporate interests that promote it through their paid media are clear on that."

I don't think that's accurate. In my pre-law days I did a lot of health policy work with the market-oriented advocates (people you would no doubt characterize as proponents of "corproate interests) for health reform in Canada and invariably they looked to Australia, Sweden, the UK, France, etc. for inspiration (that countries like the UK, whose systems inspired the Canadian health care system, have started to reform how they deliver it surely should be a sign that we should too). Neither Canada nor the US are models of particularly well designed health care systems. We have to get past the notion that the US is the only (or even a) model for Canada.

On your later post, I think you meant to respond to Shangwen.

[Bob Smith]

"@Bob: to be in America's backyard is a great blessing, despite what Saint Tommy might have said."
Don't get me wrong, I generally believe that, but the disadvantage in the health policy arena is that its health care system (or lack thereof) is the one that dominates are field of vision. So when people speak of an alternative to medicare, they think of the caricature of the US system, instead of thinking about what, say, France does, or the UK, or Sweden. As with many Canadian policy discussions, there's a tendency to define ourself in opposition to the US, rather than taking a more global view.

[Jacques René Giguère]

Bob: a lot of of people talk about Sweden or France and rightly so. I hope we could go that way. Most of the populace is not convinced that's the way we would go. That's a good part of the problem. The people who would make the decision aren't trusted...

Determinant: If I were to speak of La Presse, Krugman's principle ("sometimes you can't be both honest and polite") would kick in and Nick and Stephen would throw me out of the blog...

[Determinant]

Works for me, Jacques. Still, I do something to practice my French with. I use La Presse for reading, Et Dieu Crea... Laflaque for speaking. Please bear in mind that I live in a Really English party of Ontario.

[Bob Smith]

"Most of the populace is not convinced that's the way we would go. That's a good part of the problem. The people who would make the decision aren't trusted..."

Could that be because people with vested interests in our current system are keen on painting any alternative to the status quo as "American-style" health care? Just saying...

[Shangwen]

@Bob/Determinant: Regarding France and Sweden--What does most of the populace even know? If you ask a lot of Canadians, they will tell you the government provides free universal health care, and they will say that within minutes of handing over the Visa for a root canal or antibiotics. That is quite a brick wall.

We are now at about 11% of GDP for health care. The US is over 16% (which we mock, but we mocked them when they were at 12% and we were at 8%; it's the direction that counts). The big issue is what kinds of policies can be sold that can't also be gamed so as to make things worse. Suppose you heed the typical call for "privatization". Most of those of are not demands for market forces, but for private payment of highly regulated and artificially scarce goods. So you have to pay $3000 for an operation out of your pocket rather than through your taxes. Fine. But how is that any better? The more widespread such scenarios become, the more widespread is dissatisfaction with the high cost. And the response to the high cost will not be that it is unreasonably high due to inefficient regimes, but that there should be subsidy either of the service or for the private insurance used to obtain it. That is a bad road to go down. That in part is what "US-style health care" is--an unsolvable tangle of rent-seeking, subsidies, taxes, and unrestrained demand. (Recall this discussion.)

I suppose the only benefit of such a development is entirely wonkish, see-I-was-right one, namely that the dollar gradient (relationship of income to HC consumption) is actually steeper in Canada than it is in the US. In other words, it would show us that policy intentions that are "obvious" the lay people rarely lead to the expected results.

[Determinant]

Wow, I completely agree with that, Shangwen. I freely admit I think too much. Thinking too much is bad, it makes you ask questions without easy answers.

[Shangwen]

I guess I should have directed my reply to JRG...comment dyslexia.

Determinant, this is what is so precarious about any kind of policy change on HC. We can all fantasize about a system where much more is publicly financed, or about a system that is radically liberalized (as I do, pointlessly I admit). But there are some important facts: occupational licensing, political meddling, and the fear of death are not going away. This means the optimum (efficient) policy space is very, very small. We are not inside that space, and I do not see many major proposals that move us towards it.

[girişimcilik kursları]

Wow, I completely accept that, Shangwen. I freely admit I believe an excessive amount of. Thinking an excessive amount of isn't good, it can make you request questions without easy solutions.