What’s Really Happening With Health Care Spending?
Health care costs are now the number one expense for most advanced economies. The current 21st century health care system enables longer, healthier lives; however, it is very expensive and requires a highly productive economic system for it to flourish. The commentators on the issue of spending are often full of advice and frequently seem to imply that a single solution will resolve the cost problem. As we look to the future, reducing pay, opening/closing beds, restructuring, private insurance, or user pay systems are not long term solutions.
WHAT ARE THE REAL COST DRIVERS?
An aging population and chronic disease
In 2005 about 13% of Canadians were seniors, however, in this same year an estimated 44% of healthcare spending was directed to Canadians in this group. In the next 25 years, those over 65 will make up almost 25% of Canada’s population and traditionally this generational group uses more health care dollars. Chronic diseases like heart disease and diabetes are drivers of cost and incidents of chronic disease are on the rise in Canada. There is some debate as to the degree that baby boomers and chronic disease will drive increases in health care spending, but most commentators on health care agree that changes to the health care system and the way Canadians use the system are necessary.
The development of new ways to diagnose and treat illness
The average Canadian receives more than one and a half times the health care services as his or her equivalent three decades ago. Each year we find new and better ways to treat disease and injuries and the tendency is for these improvements to become incremental costs to the system. Medical advances are creating a huge dilemma. If there are ways to improve the quality of life for our citizens, or extend life, should we always embrace them?
A lack of clear accountability for managing the cost of health care
In Canada’s health care system, the people who do the funding and budgeting don’t do the spending. The majority of spending decisions about health care are made by doctors and their patients. These decisions are largely outside the direct control of the governments who fund the system and the administrators who try and manage it. There is a significant disconnect between how we try to manage spending and where spending actually occurs.
The costs incurred in the last months of life
In the last months of our life, we incur about 50 % of all of the health care dollars spent during our entire life time. During the last year of life, intensive use of the acute care system is an established trend. Canadians spend a significant portion of their last year of life in hospital, and the majority dies there. We will need to find new ways of supporting larger numbers of patients through end of life care. Methods that will provide an appropriate environment and level of support will likely look very different than an acute care setting and respect how each individual chooses to die.
Change will be driven by knowledge, action, and a recognition that we are going to have to think differently about how our health care system will meet our needs in the future. Change will stall if too much time is spent figuring out who and what to believe and trying to affix blame. In our experience working within the health care system, the real cost drivers substantive are complex, interconnected issues that need to be dealt with now.Download
White Paper Two - What’s Really Happening With Health Care Spending