Christie Regina QuAppelle June 2011

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Ethics, Evidence and Economics: A Dissection
of the Canadian Health Care System

Timothy Christie, BA(hons), MA, MHSc, PhD

Regional Director, Ethics Services, Horizon Health Network

Adjunct Professor, Department of Bioethics, Dalhousie
University
Contact Information

Dr. Timothy Christie
Regional Director, Ethics Services
Horizon Health Network
Saint John Regional Hospital
(506) 647-6579
Timothy.Christie@HorizonNB.ca
Full Disclosure

Conflict of Interest: No
Full Disclosure

Conflict of Interest: No

Bias: Probably
Full Disclosure

Conflict of Interest: No

Bias: Probably

“Bias has been defined as any systematic error in the design,
conduct or analysis of a study that results in a mistaken
estimate of an exposure’s effect on the risk of disease.”

Gordis, L. Epidemiology, Second Edition. W.B. Saunders
Company, 2000: p. 204.
Full Disclosure

Conflict of Interest: No

Bias: Probably

Inference: Yes

“A conclusion reached on the basis of evidence and
reasoning.” Concise Oxford English Dictionary, p. 725.
Full Disclosure

Conflict of Interest: No

Bias: Probably

Inference: Yes

Disclaimer: All of the material in this presentation , and the
opinions expressed here in, are mine (T. Christie) and they do not
represent the views of Horizon Health Network, any of the
Universities with which I am affiliated, or any other institution. And
that‘s a damn shame.
Outline

1. History of Health Care Funding and Counter Productive
Government Responses
2. Supply and Demand Framework for Analyzing
Healthcare Spending
3. Conclusion
Take Home Message

• Perverted means to ―distort or corrupt the original
course, meaning, or state of (something)…‖ (OED, on-
line)

• Any system, no matter how good it is, can be perverted.

• Although very well intentioned many aspects of the
Canadian healthcare system have been perverted.

• Therefore, my intention is to highlight these
unintentional, but very real, outcomes.
1-History of Health Care Funding
Facts
Facts
Health care expenditure (percentage of total expenditure)
50.00%
Hospitals
45.00%
Physicians
40.00% Drugs

35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%
1975 1980 1985 1990 1995 2000 2005 2010
Canadian Institute for Health Information, National Health Expenditure Trends, 1975 to 2008. November 13, 2008
What is $191 Billion?

Day $523,287,671
Hour $21,803,652
Minute $363,394
Second $6,056
What is $191 Billion?

• 1 Billion seconds equals 31.7 years.

• 1 Billion seconds ago the year was 1979

• 191 Billion seconds equals 6055 years = 4044 (BC)
Health Care Funding in Canada

• 1997 - $79 Billion
• 2007 - $160 Billion
• 2009 - $171.9 Billion
• 2010 - $191 Billion

• This is a 2.4 fold increase in health care spending in 13
years.
13% Aging
13% Population Growth
26% Inflation
48% Increased use of Services
Health Outcomes
Outcome 1998 2007 Absolute Percentage
Change Change

Life Expectancy – 79 80.7 1.7 <2%
Birth
Life Expectancy - 65 83.5 84.8 1.3 <2%

Infant Deaths 5.3/1000 5.1/1000 0.2/1000 <4%

Injuries (PYLL) 6.3/1000 5.6/1000 0.7/1000 11%
(188,758) (185,714)

Suicides (PYLL) 3.9/1000 3.1/1000 0.8/1000 26%
(116,927) (102,473) (14,454)
Health Outcomes
Outcome 1998 2007 Absolute Percentage
Change Change

Ecological comparisons do not prove
causality. Therefore, we cannot <2%
Life Expectancy – 79 80.7 1.7
Birth
conclude that increases in health
Life Expectancy - 65 83.5 84.8 1.3 <2%
care spending are responsible for
these
Infant Deaths modest improvements in health
5.3/1000 5.1/1000 0.2/1000 <4%
outcomes.
Injuries (PYLL) 6.3/1000 5.6/1000 0.7/1000 11%
(188,758) (185,714)

Suicides (PYLL) 3.9/1000 3.1/1000 0.8/1000 26%
(116,927) (102,473) (14,454)
Access vs. Outcomes

• Excessive wait-times and wait-lists are consistently
identified as a major problem throughout the country.

• 15% of the population do not have a family physician.

• Canada has 190 physicians/100,000 population, which is
the lowest among G8 countries.

• Aboriginal health status is atrocious.
Summary of Facts

1. Relentless spending increases on health care, e.g., $191 Billion in 2010,
which is 2.4 fold increase in spending in 13-years.

2. Modest improvements in health outcomes, e.g., less than 2% improvement
in life expectancy at birth and 65-years.

3. 48% of the increase in spending is the result of increased utilization of
health services.

4. Endemic access problems, e.g., excessive wait-lists and wait-times.

5. A number of countries spend less on health care but achieve better
outcomes.

6. Unacceptably poor health outcomes for Aboriginal populations (First
Nations, Inuit and Métis).
Government Actions
―In Canada you may wait a very long time to
see your doctor, but once you do, three
consecutive ECHCI reports have shown that
quality of the care you receive will generally
be quite good.‖
Eisen B and Björnberg A. Euro-Canadian Health Consumer Index 2010.
FCPP Policy Series, May 2010. p.2.
Federal Initiatives

• 2004 - $41.3 billion in a 10-year plan to strengthen
health care:
– Address the shortage of health human resources
– Increase the Medical Equipment Fund
– Increase the Canada Health Transfer
– Improve Aboriginal Health
– Decrease wait times in five strategic areas: cancer,
heart, diagnostic imaging, joint replacement and sight
restoration.
Provincial Initiatives

• Crowding Out is what happens when provincial
governments reduce funding in other areas of
responsibility in order to sustain the growth in healthcare.

• New Brunswick 2011 Provincial Budget: Health received
a 3% increase in funding and all other government
departments received a 2% decrease.
Supply and Demand Framework
The Canada Health Act

1. ―…protect, promote and restore […] physical and
mental well-being…‖

2. to prohibit ―financial or other barriers‖ that limit
reasonable access to insured health services.
The Canada Health Act

• Insured Health Services

– ――insured health services‖ means hospital services,
physician services and surgical-dental services
provided to insured persons, but does not include any
health services that a person is entitled to and eligible
for under any other Act of Parliament or under any Act
of the legislature of a province that relates to workers'
or workmen‘s compensation;‖
Disorganized System

• Health care is administered according to the principle of
“responsibility for payment.”

• It is not the patient‘s responsibility to pay for insured
health services.

• This causes a ‗disequilibrium‘ between Supply &
Demand.
Disorganized System – Supply Side

Publicly Funded Privately Funded

Publicly
Administered

Privately
Administered
Disorganized System – Supply Side

Publicly Funded Privately Funded

Publicly 1. Publicly Funded
Administered &
Publicly Administered

Privately
Administered
Disorganized System – Supply Side

Publicly Funded Privately Funded

Publicly 1. Publicly Funded
Administered &
Publicly Administered

Privately 2. Publicly Funded
Administered &
Privately Administered
Disorganized System – Supply Side

Publicly Funded Privately Funded

Publicly 1. Publicly Funded 3. Privately Funded
Administered & &
Publicly Administered Publicly Administered

Privately 2. Publicly Funded
Administered &
Privately Administered
Disorganized System – Supply Side

Publicly Funded Privately Funded

Publicly 1. Publicly Funded 3. Privately Funded
Administered & &
Publicly Administered Publicly Administered

Privately 2. Publicly Funded 4. Privately Funded
Administered & &
Privately Administered Privately Administered
Disorganized System – Supply Side

1. Publicly Funded and Publicly 3. Private Payment and Public
Administered Administration
• Hospital Services • Research
• Public Health
• Extramural/Home Care
4. Private Payment and Private
Administration (30% of
2. Public Funded and Privately Government Spending on
Administered Health in Canada)
• Physician Services
• Dental Services
• Government Prescription
Drug Programs/Pharmacies • Ophthalmologic Services
• Nursing Homes • Prescription Drugs (other
• Special Care Homes than welfare and
seniors)/Pharmacies
Demand Side

5) Demand
• Physicians
• Hospitals
• Dental
• Prescription Drugs, Catastrophic drug coverage
• Housing
• Education
• Nursing Homes
• Special Care Homes
• Dental Services
• Public Health
• Ophthalmology
Classic Problem

• The Demand for healthcare services exceeds the
Supply, or our ability to meet that demand.

• Therefore, what do we normally do?
Red Herrings
• When the Demand exceeds Supply we can:

1) Increase price,
• Privatization of health care, i.e., user fees, private insurance, etc

2) Increase the supply,
• Spending more money on health care, i.e., spend more money

3) A combination of 1) and 2) or,
• The US Model
• ―In the United States, the finest medical care in the world costs twice as
much as the finest medical care in the world.‖ Uwe Reinhardt

4) Decrease demand
• One of the more promising options.
Strategies for an Organized System:
Addressing Perverted Consequences
Publicly Funded & Publicly Administered

Publicly Funded Privately Funded

Publicly 1. Publicly Funded 3. Privately Funded
Administered & &
Publicly Administered Publicly Administered

Privately 2. Publicly Funded 4. Privately Funded
Administered & &
Privately Administered Privately Administered
Strategies for an Organized System

1. Publicly Funded and Publicly Administered

• Ethical Principles: Efficiency and Effectiveness

– Practical Tools:
• Decrease cost but improve quality, i.e., Cost-
Benefit Analysis.
• Avoid the Law of Diminishing Returns
Name Population Comparison Outcome NNT
Drotrecogin alfa patients with severe sepsis Placebo NNT=16
All-cause mortality
(known or suspected infection)
(activated protein C)
plus 3 signs of systemic Cost $13,000
inflammation and sepsis-
induced dysfunction of 1 organ
or system for < 24 hours within
24 hours

1. Descriptive: To postpone one death from sepsis in the ICU, for at least 28 days without
curing the underlying condition or preventing the ultimate outcome, the cost is 16 x
$13,000 = $208,000.
2. Normative: We have to decide, i.e., do the CBA, to determine if this benefit is worth the
cost. For example, if the relevant outcome is quality and quantity of life, could we save two
lives for a longer time period with this amount of money, or could we save 10 lives, or 25?
3. Ethics: If it is possible to use these resources more efficiently, i.e., save more lives within
existing resources, on what basis could we refuse to do so? Are we Utilitarian,
Deontologists, Virtue Ethics, Egalitarians, etc?
Cost Benefit Analysis Example

• For every dollar invested in an effective tobacco cessation program
the return is $19 in costs avoided. We can make the following
observations:

– It will cost $208,000 to post-pone one death from sepsis in the
ICU using Drotocogen Alfa.

– $208,000 x $19 = $3,952,000

– Conclusion, redirecting that money could eventually avoid more
than $3.9 million in costs.

– I do not know how many lives this equals, however, I think that it
is substantially higher than 1 (measured by 28-day survival).
Law of Diminishing Returns

History •65-year-old-man •Sedentary Life Style
•Type 2 Diabetes •Does not drink or smoke (excess)
Mellitus •Nor organ complications
•Diagnosed 1-year ago •Currently not taking any
medications
Symptoms •Fatigue
•Polyuria (↑urination)
•Polydipsia (↑thirst)

Results •BMI 30.5 •LDL 7.8 mmol/l (301 mg/dL)
•BP 200/100 mm Hg •HDL 4.2 mmol/l (162 mg/dL)
•Hemoglobin A1c 10% •Total Cholesterol 14.4 mmol/l
(556 mg/dL)
Law of Diminishing Returns

• This patient has a 36% risk of Myocardial Infarction (MI),
if nothing is done.

•Lose Weight* •Lower BP to 130/80
•Reduce A1c below 7%* •Lower LDL below 5.5 (100
•Exercise Moderately mg/dL)
•Low dose aspirin •ACE inhibitor
•Β-blocker
Law of Diminishing Returns
100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Baseline Aspirin SBP Exercise β-blocker ACE LDL
inhibitor
Law of Diminishing Returns
100.00%
90.00%
80.00%
$3/day $3/day $3/day $3/day
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Baseline Aspirin SBP Exercise β-blocker ACE LDL
inhibitor
Law of Diminishing Returns
100.00%
$4380 per year/patient
90.00%
80.00%
$3/day $3/day $3/day $3/day
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Baseline Aspirin SBP Exercise β-blocker ACE LDL
inhibitor
Diabetes in Canada

• There are over 8 million people in Canada with Type 2 Diabetes
Mellitus

• Cost to treat a patient per year ranges from $1,000 - $15,000

• $8 billion - $120 billion

• Avoiding Diminishing Returns can reduce cost by 75%

• $2 billion - $30 billion
Other Examples

• We spend approximately 10% of health care budgets on
people in the last year of life without changing the
outcome. (Note: This is not a criticism of good palliative
care.)

• CPR in terminal cancer patients in ICU is >$45,000 and
will not prevent the outcome.
Summary Points #1

1. It is possible to improve the quality of health care services and reduce their
costs by insisting on efficient and effective interventions, e.g.,
– conducting rigorous Cost-Benefit-Analyses and
– by avoiding the law of diminishing returns

2. We have to accept that health care is a zero-sum-game. Therefore, if we
give resources to one person or group then they are being taken away
from another person or group, e.g., wait-lists, postponed surgeries, etc.

3. Long wait-list or extensive wait-times are not ethically justifiable if we are
not maximizing resources.

4. I am not talking about denying ―unbeneficial‖ services. I am referring to
services that will benefit a patient but the benefit does not justify the cost.
Private Administration

Publicly Funded Privately Funded

Publicly 1. Publicly Funded 3. Privately Funded
Administered & &
Publicly Administered Publicly Administered

Privately 2. Publicly Funded 4. Privately Funded
Administered & &
Privately Privately
Administered Administered
Public Private Partnerships

2. Public Payment and Private Administration
4. Private Payment and Private Administration
• Ethical Principles: Egalitarianism
• Fully understand the profit motivation.
• Determine whether the distribution or resources and benefits is
ethically justifiable (including profits).
• Prevent the downloading costs to the public sector.
• Prevent the deferring costs until the future in order to balance
budgets.
• Always remember that health care is a zero-sum-game so if we
give profits to one sector we will have to limit services provided to
another sector.
Understanding Profits
Study Results
Budget Patients
200 190
600,000 541,000 172
180
500,000 160
140
400,000
120
300,000 100
80
200,000 $164,000
60
100,000 40
20
0 0
Ridgew ood Uptow n
Ridgew ood Uptow n

Cost per Patient
$2,845
Retention
$3,000
97%
100%
$2,500
80%
$2,000
60% 49%
$1,500
$959 40%
$1,000
20%
$500
0%
$0 Ridgew ood Uptow n
Ridgew ood Uptow n
Cost per Patient

$8,000

$7,000 $131.40

$6,000
$2,845
$5,000 $131.40
$959 Methadone
$4,000 Medical
$3,000 Dispensing Fee

$2,000 $4,197 $4,197

$1,000

$0
1 2
This Money is Being Spent Regardless!

$1,600,000 $1,519,495

$1,400,000

$1,200,000
$2,224,495
$1,000,000
Total Expenditures
$800,000
$600,000 $541,000

$400,000
$164,000
$200,000

$0
Program A Program B Pharmacy Profits
Profit Motivation
• 300 waitlist x $959 = $287,700 to eliminate the waitlist.

• Dispensing fee profits are $1,519,495

• The difference is $1,231,795

• If we reduce profits by 19% we could eliminate the wait list.

• Eliminated profits = 1584 additional patients could be treated within
existing resources, i.e., treatment on demand.
Perverted Public Private Partnerships:

1. May defer costs in order to achieve
balanced budgets and profit equilibrium

2. May download costs to the public
sector.
Alternate Level of Care
Year NH NH Beds Per 1000 Waitlist ALC CostBed %>75 Not NH Population

2001 61 4,122 90 172 57 6.70% 42,731 45,800
2002 61 4,092 90 197 101 $46,084 6.60% 42,760 45,800

2003 61 4,106 90 187 74 $47,436 6.60% 42,730 45,800

2004 61 4,108 89 198 84 $48,201 6.70% 43,206 46,285

2005 61 4,108 84 135 81 $49,699 6.20% 45,868 48,800

2006 61 4,110 83 224 115 $54,832 6.30% 46,453 49,554

2007 61 4,111 82 399 147 $59,244 6.10% 47,143 50,285

2008 62 4,171 80 518 256 $62,209 6.10% 49,055 52,241

2009 62 4,171 651 314 $65,856 6.20%

2010 63 4,244 719 369 $70,039 6.40%

2011 66 4,398 79 55,584
Nursing Homes in NB by year

100

80
63 66
61 61 61 61 61 61 61 62 62
60

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Number of Nursing Home Beds in NB
Between 2001 and 2011

5,000 4,398
4,122 4,110
4,000

3,000

2,000

1,000

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
NH Beds, Admissions, and Discharges
Admissions μ = 1245 Discharges μ = 1225
5,000
4,500
4,000
3,500
3,000 NH Beds
2,500 Admissions
2,000 Discharges
1,500
1,000
500
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Population > 75-Years

100,000

18% Increase
80,000

55,584
60,000 49,554
45,800
40,000

20,000

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Beds per 1000 >75-Years 12% Decrease

100 90 90 90 89
84 83 82 80 79
75

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
120 109 107 107 106
101 103 98 103 103
96
100 90 90 90 89
84 83 82 80 79 79
80
Actual
60 Needed
Unmet Need
40
21 24
19 17 17 17 18 18
20 12

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
120 109 107 107 106
101 103 98 103 103
96
100 90 90 90 89
84 83 82 80 79 79
80
Actual
60 Needed
Average Unmet Need = 865 people per
year or 18/1000 per year Unmet Need
40
21 24
19 17 17 17 18 18
20 12

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
NH Waiting List 2001-2010

1000
900 76% Increase
800 719
700 651
600 518
500 399
400
300 197 198 224
172 187
200 135
100
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Medically Discharged Patients Waiting for a Nursing Home

500
450
400 369
85% Increase
350 314
300 256
250
200 147
150 101 115
74 84 81
100 57
50
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Medically Discharged Patients Waiting for a Nursing Home

500 The private sector, i.e., Nursing Homes,
450 has downloaded these costs to the
400 public sector. If no one else will take 369
350 care of them a hospital will. 314
300 256
250
200 147
150 101 115
74 84 81
100 57
50
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Cost per Nursing Home Bed
2002-2010
34% Increase
$100,000

$80,000 $70,039

$60,000 $54,832
$46,084
$40,000

$20,000

$0
2002 2003 2004 2005 2006 2007 2008 2009 2010
Prospective Analysis

1. 6.4% demand = 3557
2. 1192 Discharges
3. (3557-1192)+3557=5722
4. (5722/55,584)x1000=103/1000
Prospective Analysis

1. 6.4% demand = 3557
2. 1192 Discharges
3. (3557-1192)+3557=5722
4. (5722/55,584)x1000=103/1000

5. Currently 79/1000
6. Immediate need of 1334 spots at a cost of $93,433,147
7. 719 waiting list, 329 ALC = 54% of need
Alternate Level of Care

• The hospital is in overcapacity at least 7-times/week

• Nursing homes are never in over capacity.

• To absorb the ALC patients within existing resources nursing homes
would have to find 9% efficiency.

• Cost per patient would have to go from $71,798 to $65,922 (2008
funding levels).

• This is $13.50 per patient per day or $0.56 per patient per hour.
Summary Points #2

• Our current structures allow the private sector to profit while we
ration care to people via wait lists, wait times, surgery
postponements, surgery cancellations, etc.

• The money is being spent regardless, so the real question is not
whether to spend money or not but what is the most ethical
distribution of resources? Who should get what?

• The dilemma seems to be:

1) deny health care services and provide profit, or
2) reduce or eliminate profit and provide more services,
Private Funding & Public Administration

Publicly Funded Privately Funded

Publicly 1. Publicly Funded 3. Privately Funded
Administered & &
Publicly Administered Publicly Administered

Privately 2. Publicly Funded 4. Privately Funded
Administered & &
Privately Administered Privately Administered
Private Funding & Public Administration

1. Clinical Trials
2. Orphan Research vs. Lucrative Research
3. Relationships with Industry
4. Conflicts of Interests
Marcia Angell

• In 2006 marketing costs of the Pharmaceutical Industry
were $73 Billion; whereas, R&D costs were $37 Billion.

• In other words, industry spends twice as much on
marketing as it does on R&D.

• Consider:
– Patent Expiration
– Creation of new diseases, e.g., erectile dysfunction
– Me too drugs, etc.
Conflict of Interest

• CBC Tamiflu probe sparks drug policy review
Private Funding & Public Administration
• Oseltamivir Efficacy Questioned in Preventing Influenza
Complications

• December 9, 2009 — An updated Cochrane review has called into question
the efficacy of neuraminidase inhibitors, including the most commonly used
oral agent oseltamivir (Tamiflu, Roche Laboratories Inc), in preventing
influenza complications in healthy adults.

• The results of the review, published online December 8 in the British
Medical Journal, appear with other articles on oseltamivir that all come to
the same conclusion: The evidence for the drug's efficacy in reducing
complications in otherwise healthy individuals with pandemic influenza is
now uncertain.

• According to a statement by the BMJ, the results have led to a joint
investigation into oseltamivir by BMJ and Channel 4 News, based in
London, United Kingdom.
Tamiflu Example

• Roche made $3 Billion in 2009 because governments
stockpiled Tamiflu
• Canada stockpiled $180 million worth of the drug
• 40% of that supply is about to expire = $72 million
• A number of ―Scientific Advisors‖ to Health Canada
worked for Roche:
– Research funding from Roche
– Advisory Board
– Were paid for doing ―Marketing Videos‖ for Tamiflu
– etc…
Harvard Scandal

• ―There were other stories, too, like the Harvard students
who sat in class listening to a professor drone on about
the benefits of statins—only to find later that their
teacher had been paid by 10 drug companies, five of
which make the cholesterol treatments he‘d been
advocating.‖

• Harvard cozies up with Big Pharma
http://ethicalnag.org/2010/05/01/harvard-conflict-of-
interest-big-pharma/
Summary of Point #3

• We have to be careful when receiving funding from
industry.

• Relevant Ethical Principle: Virtue Ethics

• Even the most well intentioned programs can be
perverted.
Summary of Ethical Principles

Publicly Funded Privately Funded

Publicly Efficiency
Administered & Virtue Ethics
Effectiveness

Privately
Administered Egalitarianism Egalitarianism
Part 2: Decrease Demand
DECREASE DEMAND

5. Demand
– Decrease demand by investing (ENORMOUSLY) in
Social Determinants of Health
– We will have a dilemma for the next number of years because
there are a lot of sick people that require increasing resources
but we have to simultaneously invest in the Social
Determinants of Health.
– Explicit ethical reasoning will be essential. In order to do both,
treat sick people and invest in the Determinants of Health, we
have to be more rigorous in 1, 2, 3 and 4 above.
– This means we may have to deny some individuals beneficial
services because they are cost prohibitive.
Social Determinants of Health

• The social determinants of health are responsible for
75% of the health outcomes of the population.

• Health care services account for 25% of the health
outcomes of the population.
Health Services = less than 25%

1. Income and Social Status 7. Personal Health Practices and
2. Social Support Networks Coping Skills
3. Education and Literacy 8. Healthy Child Development
4. Employment and Working 9. Biology and Genetic
Conditions Endowment
5. Social Environments 10. Health Services
6. Physical Environments 11. Gender
12. Culture
Crowding Out by Health Care

1. Income and Social Status 7. Personal Health Practices and Coping Skills
2. Social Support Networks 8. Healthy Child Development
3. Education and Literacy 9. Biology and Genetic Endowment
4. Employment and Working Conditions

10.Health
5. Social Environments
6. Physical Environments

Services
11. Gender
12. Culture
Determinants of Health

• ―Education and health, for example, are strongly linked.
People with more education generally have better
health. So, if every extra dollar spent on health care
meant one less spent on educating young Canadians,
would we be making a good trade?‖

– Health Council of Canada. (2009). Value for Money: Making Canadian Health
Care Stronger. Toronto Health Council. www.healthcouncilcanada.ca
Social Determinants of Health
1. Social and economic status are the most important factors that
determine health.

2. 73% of Canadians in highest income bracket report their health as
very good or excellent compared to 47% of those in the lowest.

3. Higher Income = live longer and suffer less illness, regardless of
age, sex, race, or area of residence.

4. Better social support = lower rates of all cause mortality.

5. Education = longer life expectancy.

6. Smoking is responsible for 25% of deaths in people between the
ages of 35 and 84.
Cost Benefits of Prevention
• Childhood vaccine-preventable disease
• MMR – spend $1, save $16.34*
• DTP – spend $1, save $6.21*

• Dental caries and water fluoridation
• Spend $1, save up to $80*

• HIV/AIDS – combined counselling, testing, referral and partner notification
• Spend $1, save $20*

• Breast Cancer – mammography every 1-2 years in women aged 50-69
• Reduces breast cancer mortality by 20-30%
• Approximately $60,000 per life year saved*
Cost Benefits of Prevention

• Cost benefit of school health programs
– $1 spent on…
• preventing tobacco use can save $19…
• preventing alcohol & drug abuse can save $6…
• education to prevent early & unprotected sex can
save $5 …

…that would have been spent treating the
consequences of the behaviour.
Cost Benefits of Prevention
Preventive Investment $ Societal Benefit $

Public health expenditures on tobacco $18.3 million Societal benefit (1998) $1.182 billion
control (1996/97)

Tobacco control since 1971 $176 million Net societal benefit (1971- $8.43 billion
2010)

Public health expenditures on programs $60 million Societal benefit (1998) $934 million
to reduce risk factors for coronary heart
disease (1996/97)

Coronary heart disease prevention $810 million Net societal benefit (1971- $8.48 billion
since 1971 2010)
Previous Example

• Assume that $1 spent on preventing tobacco use can
avoid $19 in costs.

• We spent $41.3 Billion in a 10-year plan to reduce
surgery wait times, increase health human resources,
etc.

• $19 x $41.3 Billion = $784.7 Billion in costs avoided

• This is 4 years of the health budget in Canada
What‘s the Catch?
We let Health Services Crowd Out
Everything Else
1. Income and Social Status 7. Personal Health Practices and Coping Skills
2. Social Support Networks 8. Healthy Child Development
3. Education and Literacy 9. Biology and Genetic Endowment
4. Employment and Working Conditions

10.Health
5. Social Environments
6. Physical Environments

Services
11. Gender
12. Culture
Ethical Dilemma

• We know that we have to invest (enormously) in the
social determinants of health in order to reduce the
future demand on the health care system.

• However, we have a lot of sick people who have
escalating needs placing ―real time‖ demands on our
health care system.

• We don‘t have enough money to do both so we just keep
funneling resources into the acute care system and hope
that the demand will decrease on its own.
Summary

Category A: Organize the Supply of health services
1. Cost Benefit Analysis at all levels, e.g., clinical, administrative,
policy, provincial and federal.
2. Avoid the Diminishing Returns and avoid the relentless pursuit of
small benefits at high cost.
3. Reduce or eliminate profits, primarily through public-private
partnerships and identify the services that could be publicly
administered/delivered as opposed to privately delivered.
4. Get a better understanding on the influence of industry on priority
setting.

Category B: Reduce the Demand for health services
4. Make enormous investments in the Social Determinants of Health
Conclusion

1. We are spending too much money on health care = $191 Billion is
an unfathomable NUMBER (at least for me).
2. Increased spending does not necessarily result in improved health.
We have to spend the right amount, in the right way, on the right
things, at the right time, etc. (Shout Out to Aristotle)
3. Government strategies of targeted funding and crowding out are
ineffective and probably counter productive.
4. Don‘t get distracted with red hearings.
5. We have to utilize Cost-Benefit Analysis reasoning, avoid the law of
diminishing returns and eliminate or significantly reduce profits.
6. Most importantly we have to make enormous investments in the
social determinants of health if we ever hope to decrease demand.