The Canadian Health Care System

Ben Swanson, Eric Hoyt, Scott Thompson, and Nancy Thao

Overview

Health Insurance Industry

Hospitals

Physicians

Nurses

Patients

The Health Insurance Industry in Canada

•Health insurance:-Public-Private

•How Public Insurance Functions: -Finance

-Hospitals-Employment of Providers

•Effects of Public Insurance

Public Health Insurance

Financed: 70 percent public health care Covered: standard hospital and physician medical

services Not covered: elective surgery, prescription drugs,

medical devices, dental care, eye care, homecare (Tuohy 2009)

Provinces: global budgets, fee-for-service schedules, capacity constraints (Phelps 2010)

Five conditions: public administration, comprehensiveness, universality, portability, and accessibility (Detsky 2003)

Private Health Insurance

Prohibited: private insurance for public services Covered: elective surgery, prescription drugs, medical

devices, dental care, eye care, homecare (Flood and Archibald 2001)

2/3 of Canadians carry private health insurance Financed through employers (Tuohy 2009) Private insurance + out-of-pocket expenses = 27%

health care expenditures (Marchildon, 2005) Provision of healthcare is undertaken by the private

sector

Finance of Public Health Insurance

Financed: 70% public insurance, 12% private insurance, 15% out-of-pocket, 3% other (Tuohy 2009)

Financed: (in 2004) 64% provincial government, 6.2% federal government (Zhong 2009)

Federal funding capped at 25% of provincial health expenditure (Detsky 2003)

Tax Revenue: (in 1988) 37% personal income tax, 25% commodity tax, 14% payroll tax, 9% corporate income tax, 10% property tax, and 5% estate/other tax (Vermaeten et. al. 1995)

Hospitals Approx. 900 hospitals, mostly private non-profit

organizations (Decter 1997) Public funding accounts for 91% of hospital expenditure

(Madore 2005) Public global funding = guaranteed annual reserves

regardless of patient volume (Botz 1993) Global funding channeled to Regional Health

Authorities (RHAs) (Brown et. al. 2006) Provincial RHAs decide: capital expansion, bed

allocations, introduction of technologies, hospital budgets, categories of staff to be hired (Madore 2005)

Employment of Providers 80% physicians paid by fee for service scheme (Wranik

2009) Provinces set physicians’ pay through fee schedules

negotiated with medical associations (Brown et. al. 2006)

Faculty physicians, residents, nurse practitioners, nursing assistants are paid by salary (Spitzer et. al. 1976)

62.9 % of nurses work in hospitals, 13.9% in community health, 10.6% in nursing homes, 12.5% in other places

Effects of Public Insurance in Canada

2007: Total Health Care spending was $160 billion (10.6% of GDP)

Health care expenditures increased from $600 per capita in 1960, nearly double the OECD median, to $2,250 per capita in 1998, about equal to OECD median (Iglehart 2000)

In 1961, public insurance 2% rise in employment In 1961, public insurance rise in wages of 3%-4%

(Gruber and Hanratty 1995) Eliminates adverse selection by community rating

(Feldman et. al. 1998)

Canadian HospitalsHospital ExpendituresWhere the money goesAcute-Care HospitalsCurrent issues for Hospitals

◦Infectious Diseases◦Adverse Drug Effects

Hospital ExpendituresHospitals accounted for 28% of total Health

Spending in 2005◦ Decrease from 45% in 1975◦ Hospital spending is continuously rising

◦ Is becoming a smaller proportion of total health spending

(CIHI 2008)

Where does the money go? 2006: Most of the money goes towards compensation

for staff ($21 Million)◦ 37% - Inpatient Nursing services◦ 21% - Diagnostic & therapeutic Services◦ 18% - Administrative & support services◦ 13% - ER & Ambulatory Care

(CIHI 2008)

Acute Care Hospitals2004–2005

◦ Acute Care accounted 47% of total hospital spending ($17 million)

Acute-care hospitals: those who have at least 200 beds or dedicate 50% of their total number of beds to acute care

Much of the literature correlates much of Health Care Spending to acute care

What is contributing to this cost?

(CIHI 2008)

Acute-Care Hospitals: Most expensive to least expensive inpatient Care (2004 to 2005) Circulatory diseases are the

most expensive (heart attacks, strokes)

◦ 19% of inpatient costs ($3 million)

◦ High cost per stay (average of $11,260)

◦ High volume of stays (292,562)

Injuries (falls, accidents, poisoning)

◦ 10% of total inpatient costs ($2 million)

◦ Average of $9,400 each stay

Diseases of the Respiratory System◦ 9.5% of inpatient cost ($1.6 million)

Neoplasm (Cancers)◦ 9.4% or $1.59 million

Important: Pregnancy & childbirth◦ accounted for the highest volume of

stays (314,535)

◦ only 5% of total inpatient costs

◦ Low average cost per stay ($2,000 for vaginal delivery & $4,000 for caesarean)

(CIHI 2008)

Current Issues for HospitalsInfectious DiseasesAdverse Drug Effects

Infectious Diseases

Every year, more than 250,000 Canadians are ill from preventable infections

Methicillin resistant Staph infection has increased 10-fold in less than a decade◦ Average about $14,000 (Canadian Dollars) per

patient◦ $100 million (Canadian) for the whole country

Canadian hospitals have fewer regulations for controlling infections than restaurants

Due to downsizing, they do not have the required number of staff needed to combat

infections

(Spurgeon 2005)

Adverse Drug Effects (ADE)Patients being given the wrong

drugs or the wrong dosage of drugsHalf of these cases are preventableIncrease use of Health Care

technology◦ Bar-coding for drug dispensing & administration◦ Computerized Physician Order Entry System - Physicians type

medication orders directly into a computer system◦ Clinical Decision Support System for Physicians - A rule-based,

intelligent database that checks automatically and routinely for inappropriate drug orders

(M. Saginur et al. 2008)

Physicians in Canada•Becoming a Doctor•Who are the Doctors?•Doctor Shortages

Canadian Medical School17 Medical Schools in Canada

◦132 in the United StatesMCAT is requiredBachelor’s Degree is not4-5 Year programsProvincial residency has heavy impact

on admissions2006/2007 – 6093 female applicants,

4580 male applicants◦Overall admissions rate = 25%

(AFMC 2010)

Who are Canada’s Physicians?

38.7% of all physicians are located in urban areas◦33.6% of Canada’s population lives

thereOnly 9.4% of physicians work in

rural areas◦21.1% of Canada’s population lives

there (CIHI 2005)

Where are they practicing?

Doctor ShortagesOECD Numbers

◦OECD mean = 3.1 doctors per 1000 pop.

◦Canada = 2.2 per 1000 pop. Rural areas can be much worse

Issue boils down to two major problems◦Recruitment

Finding doctors to work in rural areas

◦Retention Keeping doctors in rural areas

This wasn’t always the caseRecent literature focused on surplus

◦“This point cannot be stressed too hard: there are too many doctors.” (Roos 1976)

Barer-Stoddart Report 1991◦Called for reductions in Med School

admissions◦Policies were implemented

Physicians per 1000 pop was essentially capped

(Esmail)

The picture todayHealth Outcome

◦Higher doctor to population ratios show decreased mortality rates (Or, 2001)

◦Strains rural doctors Curran 2004

Threats to Access◦Weak MIZs average 10.4 km to a physician◦No MIZs average 33.5 km to a physician◦Canadian Average = 3.4 km to a physician◦Large Urban centers = .9 km to a physician

CIHI 2005

RecruitmentDifficult to find doctors to work in rural

areas◦Solutions?

Recruitment of foreign Doctors Around 20% are already foreign

(CIH) Can get complicated…

Fee system changes Curran

Risks to hospitals and treatment centers◦Amount of care provided, and even the

existence of facilities is threatened (Curran)

RetentionDoctors leave

the provinces they are trained in◦ For highly

populous areas, or the US (Rytek)

“The situation has never been as dire.”◦ (Shuchman)

The Nurse Industry• The different types (RN, LPN,

RPN)• Educational Requirements• Who are they? (Gender)• Employment Areas• Current Work Climate• Nurse Migration• Aging of the Nurse Population• Internationally Educated Nurse

The Different Types 76.7% - Registered Nurses (RNs) 21.8% - Licensed Practical Nurses (LPNs) 1.5% - Registered Psychiatric Nurses (RPNs)

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RN LPN RPN Total Registrations

Nurse Distribution by Province/Territory

Educational Requirements Registered Nurses (RNs)

◦ 1960s and1970s: diploma in nursing from a 2 or 3 year hospital-based program

◦ 1990s: 3 year diploma from a community college 4 year University degree (some require & others in progress)

◦ Passing the national Canadian Registered Nurses Examination (CRNE)

Licensed Practical Nurses (LPNs)◦ 1 or 2 year diploma from a community college

◦ Passing the national Canadian Practical Nurses Registration Examination (CPNRE)

(CIHI 2008)

Who are they?The Nurse Population is

predominantly female◦RNs -94% female◦LPNs - 92.8% female

Employment – RNs vs LPNs

Canada Institute for Health Information

• Provinces of Canada in 2007• Majority works in Hospitals• Consistent over last 5 years

Registered Nurses

Licensed Practical Nurses

Current Work Climate1990s – recent restructuring,

◦ increase in dissatisfaction in work environmentsUnlike the popular stereotype

◦ 80.1% - Good Nurse-Physician Relationship ◦ 78.2% - physicians provided high-quality care to patients

Dissatisfaction:◦ Hospital Management

Only 34.9% - listens & responds to concerns Only 39.7% - gives them opportunity to participate in policy decisions Only 37.0% - the contributions they make to patient care are

acknowledged

◦ Overload & Burnout 39.9% decrease in the number of nurse managers 25% decrease chief nursing officers 63.6% - experienced an increase in the number of patients assigned to

them Overall, 36% of nurses felt overworked

(Aiken 2001)

Nurse Migration1990 – 2000:

◦ 81,044 graduates from Canadian nursing schools ◦ only 64,394 (79%) registered in 2001 as working in

Canada

To the United States◦ 1993-1994:

40% of Canadian registered nurses left to U.S. Canada projects a RN shortage of 100,000

by 2016

(Bundred 2000)

Aging of the Nurse Population Many of the nurses are old and retiring

◦ 2008: 58.3% of the RN were between 40 to 60 yrs old 55.2% of the LPN were between 40 to 60 yrs old

◦ 16.6% - planning to leave present job in the next year Only10.3% consisting of those who are under 30 yrs old

◦ 29.4% - planning to leave present job in the next year

Canada Institute for Health Information

Internationally Educated NursesNumber of IEN

increasing2008:

◦ Total Nurse force: 7.2%

◦ RNs: 8.2%◦ LPNs: 2.0%

Most are from Philippines & UK

Greatest continuing increase from India

27.9%

23.3%

6.9%5.6%

4.7%

3.2%

2.2%

26.2%

IEN by Country

Phillipines

United Kingdom

United States

Hong Kong

India

Poland

Australia

Other

(Little 2007)

Patients in the Canadian Health Care System

- Incomplete Access - Inefficiently Long Wait Times - The Costs Due to Incomplete Access

- Addressing Problems With Access

- Quality of Care Received - Satisfaction of Care Provided

Issues With Access

Who is covered? Government provided health care.

◦ 70% of total health care costs.◦ Large provincial variation in coverage. (Marchildon, 2005)

Medically necessary coverage.◦ Elective surgery.◦ Medical devices.◦ Optical and Dental coverage.◦ Prescription drugs. (Demers et

al, 2008) Access to providers

◦ Primary care, 1-2 days.◦ Specialized care, 2 months – Over 1 year. (Howard et al, 2009)

Rationing through waiting lists.

Wait Times by Statistics Canada’s wait times exceed established benchmarks in every

category. (Christou et al, 2010) Cardiac surgery

◦ 3.5 months (Legare et al, 2010) Colorectal cancer.

◦ 2 months (Singh et al, 2010) Bariatric surgery.

◦ 5 years. (Christou et al, 2010) Digestive disorders

◦ 47.6% of patients waited over a month for treatment of, ◦ 23% waited over three months ◦ 12.5% waited over six months ◦ 3.5% waited over a year.

(Paterson et al, 2010)

Wait Times ContinuedBladder Cancer (Cystectomy)

◦ 50 days(Kulkarni, 09)

MRI’s◦ 16% of centers meet benchmark times

(Emery, 09)

Depression and Anxiety◦ Significant deterioration

(Janzen, 08)

Corneal Transplant◦ 30 weeks

(Rasoli et al, 09)

Costs Due to Incomplete Access

Private insurance is available.

The offering of, or purchasing of, private insurance for a health care service provided by the government plan however is illegal.

Private insurance and out of pocket expenditures are minimal in this system, making up 12% and 15% of total health care expenditures respectively.

Adverse effects of wait times.

Percent of Health Care Expenditures

PrivateOut of PocketPublicOther

(Marchildon, 2005)

Addressing Access Problems

Efforts to Improve the situation.◦ Elimination of waste and inefficiencies.◦ Prioritizing wait lines.

(Wijeysundera et al, 2010) British Columbia Cancer Agency

◦ Plan reduces wait times by 70%(Santibanez, 09)

Emergency Departments.◦ Reduced wait times from 3.6 hours in 2004,

to 2.8 hours in 2006. (Ng, et al 2010)

◦ Emergency Departments’ effect on wait times,

73 days on average as compared to 105 days. (Legare et al, 2010)

Quality of Care Received

Above OECD average◦Life expectancy◦Life expectancy at age 60◦Infant Mortality

Below OECD average◦Obesity levels◦Coronary bypass procedures◦Patients undergoing dialysis (Anderson

et al, 2001)

Satisfaction With Care Provided

A survey of 770 patients in Ontario in 2005 yielded, on average, high levels of satisfaction with primary care physicians. (Howard et al, 2009)

Conversely, patients surveyed about quality of care received in hospitals yielded primarily unsatisfactory results.

(Patterson et al, 2010) Wait times rated lowest. (Richard,

2010) Canadians enjoy the benefit of having most of

their health care costs covered by government funds, but also struggle with the realities of an imperfect system.

Summary

Health Insurance

Hospitals

Physicians

Nurses

Patients