Free Research Proposal On Sustainability Of The Canadian Health Care System

Introduction

The Canadian health care system is struggling with low capacity, rising costs and an unpredictable national/global economy, in the face of the rising demand for healthcare and increasing lifestyle diseases’ burden. The rapid cost increases are alarming, but it is just as critical to understand that this is a global trend. Across the OECD for instance, healthcare expenditure may increase from 7% of the GDP on average to up 13% by the close of 2050. As perhaps best shown by the difficult enactment and implementation of the Affordable Care Act in the United States, reforming a health care system as large and complex as Canada’s difficult, but not entirely impossible. The Canadian government’s investments in the health care system over the past decade should offer a helpful platform to provide productivity gains that may be leveraged to transform the healthcare system for the better. This paper asserts that while the current rates of public expenditure on health care are unsustainable, the Canadian health care system is sustainable, but needs drastic changes to cut costs, improve quality and efficiency.

Problem Statement

Healthcare expenditure has been rising faster than general inflation and public revenue growth, which points to the system’s long-term unsustainability. In 2011, for instance, Canada spent an estimated 11.6% of the GDP on health care, with public expenditure accounting for upwards of 70.3% of the total expenditure. This represents a part of a trend over the past 25% years, during which healthcare expenditure as a proportion of GDP rose from just 7% to 12%. It is expected that healthcare expenditure will amount to 19% of the GDP by the close of 2030, not least because of the population expansion, changing epidemic patterns and an aging population. According to Falk, Mendelsohn, & Hjartarson (2013), health care expenditure will increase by 6.5% annually between 2010 and 2013, which is at least 2.5% higher than the expected GDP growth over the same period. Effectively, if urgent measures are not taken to check the trends, the country’s health care system will have considerable adverse effects, including taxation of the elderly, higher out-of-pocket expenses, and declining quality. The mounting cost burden and possible disruptions in capacity and quality raises questions on the sustainability of not just the Canadian system, but any other publicly funded health care system (Dhalla, 2007; Falk, Mendelsohn, & Hjartarson, 2013).

Discussion & Solutions

The Canadian health care system (in part or as a whole) has been in similar positions in the past, after which it transformed itself and emerged stronger than had been thought. In the 1990s, the recession that hit the country’s economy forced massive spending cuts that slowed down health care expenditure growth to just 1% of the GDP/year. The most important reforms included detailed group purchasing and supply chain programs that included the identification of cheaper clinical supplies alternatives, shared central procurement for non-core services, and hiring and wage freezes. Others included reduced drug costs, outsourcing and the implementation of hard caps on physician salaries. Other than monetary savings, these reforms set the stage for fundamental and comprehensive transformation of healthcare delivery in the country through the 1990s, including the dramatic reduction of the inpatient acute care segment. With scientific breakthroughs also led to considerable improvements in quality and patient welfare. There is no reason why similar restructuring cannot be implemented to curb the unabated increases in costs, bolster quality and efficiency in the coming years.
The conditions facing the system and strategic context of change are less difficult than the 1990s. The 2001-2010 health care spending increases were relatively low than was the case in the previous decade. Further, Canada faces low nursing unemployment and labor conflicts, rapid efficiency enhancing technological innovations and investments and generally falling costs of government service provision across multiple non-health care spending areas. The Canadian government also has investment in quality, access to care and productivity over the past few decades, which can now help support more reforms. The newest challenges that the reform agenda must address that were not as significant in the 1990s include an aging population and the emergence of new cost drivers including big pharmaceuticals.
The sustainability of the Canadian healthcare system depends on the exact measures that must be implemented to enhance efficiency and quality. A review of 314 empirical studies carried out across the world reveals that the average hospital efficiency is 85%, with public hospitals posting relatively higher rates. Effectively, there is still up to a 15% chance of increasing efficiency and cutting costs. It is urgent to reduce systemic inefficiencies, adopt disruptive technologies, development of innovative business models (including the adoption of some aspects of the US’s Affordable care Act) and an increased focus on access and quality improvement. Of all these, perhaps the most promising two-pronged strategy remains the creation of revolutionary business models and adoption of technology. The Canadian system must reorganize the clinical business models and devolve decision-making adopt increased virtualization to create new roles for both patients and care providers, and deploy digitization. By decentralizing the culture of efficiency and high quality, coupled with the provision of the right tools to ensure change, it is possible for the Canadian health care system to create even value in the long term.

Conclusion

This paper explored the sustainability of Canada’s healthcare expenditure, and the sustainability of both the Canadian health care system and similar publicly funded systems. Clearly, increasing costs must be reined in by managing key cost drivers (e.g. pharmaceuticals), but there is little evidence that the country’s expenditure on healthcare is considerably higher than it should be. Spending statics from similarly placed countries in the OECD show that the cost and efficiency issues are neither unique to Canada nor is it unmanageable. Other than the tendency to overstate the cost difficulties, restructuring the system’s business model, devolution of decision-making and adoption of efficiency- and quality-enhancing technologies can help to ensure that the system creates more value for patients and the country into the long-term. It is evident that the Canadian health care system has been in worse conditions in the 1990s and pulled through after widespread reforms were implemented. Given the fact that the strategic challenges today are less daunting than was the case then, the prospects for success are greater.

References

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