presentation - health (slides)

8/14/2019 Presentation - Health (slides)

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Health Care Nadeem Esmail

- Senior Fellow

Conference on AlbertasFuture

Saturday, February 6, 2010

Copyright The FraserInstitute, 2010


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The Highest Quality and MostCost-Effective Health Care?


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Health Expenditures


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Age- and Sex-adjusted ProvincialHealth Expenditures, 2007

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000

$3,200

$3,400

$3,600

$3,800

$4,000

DollarsperCapita

Source: CIHI (2009)


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Age-adjusted Health Spending inthe OECD 2005

4

6

8

10

12

PercentofGD

P

celandan

adaerlandFr

anceealand

reland

straliaus

triaelgium

rlandsnm

arkrtu

galorwayrm

anyD

Avg.

Koreapublicwe

denungarybo

urginland

reecengdomSpainItalyep

ubliJSource: OECD (2008)

Calculations by Authors


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Health Results:Access


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Waiting For Care in 2009

17.0

19.6

25.2

14.3

12.5

16.6

25.8

23.1

26.7 27.3

0 .0

5 .0

10.0

15.0

20.0

25.0

30.0

W

eeks

W aiting T im e Betw een Referra l by G P an d T re

Pro vince, 2009


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Canadians Wait Longer ThanOthers

55%

39%

72%73%

61%

50%52%

34%

46%

20%

30%

40%

50%

60%

70%

80%

PercentofRe

spondent

AustraliaCanadaGermanyNetherlandsNew Zealand

United KingdomUnited States

Source: Schoen et al. (2007)


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51%

37%

60%59%

84%

74%

62%

43%

18%

34%

18%

26%

3%

8%

14

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Perce

ntofRespondent

AustraliaCanadaFranceGermanyNetherlanNew ZealUnited KiUnited St



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45%40%

55%

68% 69%

45%42%

74%

53%

58%

43%

32%31%

52%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Perce

ntofRespondent

AustraliaCanadaFranceGermanyNetherlaNew ZealUnited KiUnited St



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59%

32%

72%

47%55%

40%

62%

14%20%

30%

40%

50%

60%

70%

80%

PercentofRe

spondent

AustraliaCanadaGermanyNetherlandsNew Zealand

United KingdomUnited States



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Comparisons of Age-AdjustedAccess

23rd of 28 countries for access to physicians

14th

of 25 countries for access to MRI machines

19th of 26 countries for access to CT scanners

8th of 21 countries for access to Mammographs

19th of 21 countries for access to Lithotriptors


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High cost system

Worsening waiting times

Poor performance on waiting timesfor elective medical care

Poor results on access to doctorsand technology

Satisfactory performance on health

outcomes

Health Results Canada:Getting What We Pay For?


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Albertas Final Grade

F


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10

15

20

25

30

35

TotalWaitingT

ime(Weeks)

Spending & Waiting, 1993-2009


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A Look at the Most SuccessfulUniversal Health Insurance Programs


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Understanding Australia, Japan,Sweden, Switzerland, and France

Lower/similar healthcare costs

Better healthcare outcomes

User fees or co-payments

Parallel private medical treatment

Private hospitals competing to

supply publicly funded care


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Understanding Austria, Belgium, France,Germany, Japan, Luxembourg, and

Switzerland Lower/similar healthcare costs

No waiting lists

User fees or co-payments

Parallel private medical treatment

Social insurance financing

Private hospitals competing tosupply publicly funded care


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Switzerland

Competing insurance funds decentralized, self-administered, not-for-profit. (Risk redistribution)

Various deductible arrangements(varies between insurance policies)and 10% coinsurance rate

Direct patient payments accounted for

28% of total expenditure (both co-payments and private out of pocketpayments)

Competitive private delivery of care


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Japan

Cost sharing accounted for 11.7 percentof total health expenditures in 2001

User fees of between 25 and 30 percent

for physician services and hospital care,varying rates for drugs

Almost total freedom to choose and useprivate and public health care services

without a referral system

Competitive private delivery of care (79.9percent of hospitals and 93.8 percent ofclinics privately owned)


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The Policies Behind TheseSuperior Performances


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Cost Sharing


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Money Saved

Study of a 25% co-insurance payment inAlberta with reasonable annual limits forpatients, old-age and low-income exemptions,and exemptions for hospital care for childrenand the elderly. (Ramsay and Esmail, 2004)

12% reduction in spending overall; 20% for theprovincial budget.

Would reduce health spending in Alberta in2009/10 from the planned $12.571 billion by$2.5 billion.


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Cost Sharing vs. CanadaHealth Act

A cost sharing program like the one described abovewould violate sections 18 through 21 of the CHA (not theprinciples), giving the federal government 3 options:

1. Recognize that the problems with health care resultfrom the design of the system itself and do nothing.

2. Strictly abide by section 20 of the act and withhold

transfers equal to the dollar amount charged topatients in a fiscal year.

3. Claim that the program violates the principle ofAccessibility and withhold all transfers for health and

social services.


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Budgetary Allocation/Lack ofPrivate Competition

Incentives to provide a higher or superiorquality of care to patients are virtually absent

Activity-based funding with private competitorsis a markedly superior policy choice and would

provide better value for money, higher qualityservices for patients, and reduced waitingtimes for care


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Activity-Based Funding

Italian system was able to care for twice as manypatients in 1998 as in 1994 despite fewer beds(Aparo et al., 1999)

Italy: (Aparo et al., 1999) 32% reduction in cost per discharge

62% increase in inputs per day

13% increase in activity and 17% decrease in waittimes in Denmark (Clemmesen and Hansen, 2003)


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Activity-Based Funding

Increases in the quantity of services combinedwith decreases in the size of hospital budgets inAustralia (Hilless and Healy, 2001)

Improvement in output per unit of inputs inNorway (Bjrn et al., 2003; Bibbee and Padrini, 2006)

Waiting Lists are less likely to be a problem in thepresence of activity-based funding (Siciliani and Hurst,2003)


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Activity-Based Funding& Private Competition

Competition among hospitals will lead to more efficientdelivery of services either through lower costs or higherquality or both (OECD-DFEACC, 2006)

Presence of for-profit hospitals can be associated with2.4% lower hospital payments (OECD-DFEACC, 2006)

Price competition between selectively contractedhospitals can lead to price reductions of 7% or more(OECD-DFEACC, 2006)


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Benefits of Competitive ParallelCare and Insurance

Allows individuals to employ their resources in a

manner that benefits them most

Allows for special and tailored services

Safety valve for publicly funded program

Trickle down effect of newer technologies/less

invasive treatments


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Benefits of Competitive ParallelCare and Insurance

Creates effective choice thus encouraging

responsiveness, efficiency, and innovation

Barometer of quality and availability of publicly

funded services

Insurance allows access to private care for

middle and lower-middle income individuals


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Parallel Care and Insurance

Better access to care

No negative impact on current Medicare program will likely see a positive impact

Preliminary evidence suggests that an increase in

private health insurance coverage may reduce waitingtimes. (Siciliani and Hurst, 2005)


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More information atwww.fraserinstitute.org


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Appendix I Labour Costs

BC H it l P T M h f


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BC Hospitals Pay Too Much forTheir Labour

10

12

14

16

18

20

22

24

Cleaner

HousekeepingA

PayrollCler

Storekeepe

FoodServiceWor

Dishwashe

Cashier

CookI

Cook(Bake

MaintenanceWor

Painter

SwitchboardOpera

BookingCle

Hospital Wage

Hotel Wage

BC H it l P T M h f


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0%

5%

10%

15%

20%

25%

30%

35%

40%

%D

ifferen

Cleaner

HousekeepingAide

PayrollClerk

Storekeeper

FoodServiceWorker

Dishwasher

Cashier

CookI

Cook(Baker)

MaintenanceWorker

Painter

SwitchboardOperato

BookingClerk

BC Hospitals Pay Too Much forTheir Labour


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ON Labour Costs

Pay premium over private sector and other provincialcomparators

Hospital payrolls used up the entire hospital funding

increase between the 1997 low and 2002

High earners tripled in number since 1996, while highearner payrolls increased more than three times as fast asprovincial hospital transfers

Physicians, certain other high-level health professionals,and mid-level admin staff have relatively low pay incomparison. Avg. income for physicians declined overthree decades (now of the peak level in 1972)


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Appendix II Population Density

P l ti D it d H lth


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5

6

7

8

9

10

11

12

0 100 200 300 400 500 600

Population Density, Inhabitants/Sq. KM, 2002

AgeAdjustedHea

lthExpenditure,

%G

DP,2001

Population Density and HealthExpenditures in the OECD

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