One of the frequently-raised buzzwords in discussions of the Canadian health care system is the idea of ‘sustainability’. It is a bogeyman argument that crops up every now and then, particularly as a way of softening the rhetorical ground for increased private-sector involvement in health care. The argument often invokes the spectre of a meme called the ‘Grey Tsunami’. The argument goes something like this:
- Canada’s population is aging
- Health care costs are increasing faster than GDP
- Older people use more health care resources than younger peopleTherefore, there is a rapidly approaching point when the expansion of health care costs, due to increased usage by older people, will become too large to sustain and will collapse the health case system.
The implication is usually that the only way to control health care costs is to increase privatization (which doesn’t work) or to introduce a parallel public option (which also doesn’t work). Since the premises are all true, people nod sagely and cluck their tongues and say ‘what a shame’, as though the conclusion followed logically. It’s entirely possible that the conclusion might follow logically from those premises, but it’s not necessarily the case. What would strengthen the argument is some actual evidence.
Luckily, such evidence is recently forthcoming:
To shed new empirical light on this old debate, we used population-based administrative data to quantify recent trends and determinants of expenditure on hospital, medical and pharmaceutical care in British Columbia. We modelled changes in inflation-adjusted expenditure per capita between 1996 and 2006 as a function of two demographic factors (population aging and changes in age-specific mortality rates) and three non-demographic factors (age-specific rates of use of care, quantities of care per user and inflation-adjusted costs per unit of care).
We therefore conclude that population aging has exerted, and will continue to exert, only modest pressures on medical, hospital and pharmaceutical costs in Canada. As indicated by the specific non-demographic cost drivers computed in our study, the critical determinants of expenditure on healthcare stem from non-demographic factors over which practitioners, policy makers and patients have discretion.
This is a particularly cleverly-designed study done by some colleagues of mine at the University of British Columbia. They used a statistical procedure to model the relative contributions of population age, age-specific mortality, cost of dying, and cost of surviving (within a given age range). Their analysis also included variables to account for resource utilization and cost that are separate from age. British Columbia keeps excellent electronic records for all provincial residents, meaning that they were able to apply this model to a cohort of over 3 million people, using actual real-world expenditure rather than relying on evidence from clinical trials.
Their analysis found that aging has contributed only minimally (1%) to total medical expenditures between 1996 and 2006. Using forecasts from the provincial ministry of health, they estimate that these expenditures will return to current levels beyond 2026. The major factors for health care system expenditure increase had more to do with policy decisions and the purchase cost of equipment, drugs and other technology than it did with a ‘grey tsunami’.
Another article in the same issue says the same thing, albeit a bit differently:
Conventional wisdom holds that Canada suffers from a physician shortage, yet expenditures for physicians’ services continue to increase rapidly. We address this apparent paradox, analyzing fee-for-service payments to physicians in British Columbia in 1996/97 and 2005/06. Age-specific per capita expenditures (adjusted for fee changes) rose 1% per year over this period, adding $174 million to 2005/06 expenditures. We partition these increases into changes in the proportion of the population seeing a physician; the number of unique physicians seen; the number of visits per physician; and the average expenditure per visit. Expenditures on laboratory and imaging services, particularly for the elderly and very elderly, have increased dramatically. By contrast, primary care services for the non-elderly appear to have declined. The causes and health consequences of these large changes deserve serious attention.
Using a similar data set and a different method of analysis, McGrail and colleagues found that, like overall spending, physician-specific spending was increasing. However, there has not been a corresponding increase in those users of the health care system who are not older adults. Even given this increase, the percentage of health care expenditure that is attributable to aging is small.
Given what we know about health care costs – namely, that the increase in price is due largely to the cost of innovation, we have powerful policy levers we can use to make appropriate changes that will preserve the ‘sustainability’ of the system for years to come. Our growing paranoia about the effect of the aging population does not seem to be supported by evidence from actual increases in health care expenditure. While we will undoubtedly have to change the way we think about and practice health care in light of an aging population, it does not follow that we will have to necessarily abandon the way the system is currently structured.
Above and beyond this direct message, I want to take the time to point out that health services and policy research is an important avenue of inquiry. We should make our policy decisions – health or otherwise – based on what is evident, not what is obvious. Whatever our endeavour, we should be constantly asking ourselves questions and measuring our level of success or failure honestly. The authors of this paper, rather than accepting what has been more or less ‘orthodoxy’ when it comes to the health care system, have found ways of directly testing the ‘grey tsunami’ hypothesis. This is a good thing – we should always be challenging our entrenched ideas. Failing to do so will result in us tilting at imaginary windmills, chasing ghosts and false ideas to the point where our efforts are legitimately unsustainable.
Like this article? Follow me on Twitter!