Five per cent of Ontario residents account for majority of healthcare costs
Five per cent of Ontarians account for 65 per cent of provincial healthcare costs attributable to individual care with the top one per cent accounting for one third of these costs overall. These are among the findings of a three-year study of all healthcare use in Ontario – the largest completed to date – from the Institute of Clinical Evaluative Sciences (ICES) and the Dalla Lana School of Public Health at the University of Toronto.
Published today in the Canadian Medical Association Journal, the study reviewed anonymized patient records for nearly 15 million Ontarians over three years (2009 – 2011). The researchers examined patterns in cost and use for a wide range of provincial healthcare services, including drugs and lab tests as well as physician visits, home care visits, continuing care and all levels of hospitalization. The study is the first in Canada to evaluate an entire province's healthcare costs at the individual patient level, and the first to examine these costs while taking the ages of patients into account.
“Ontario spent more than $30-billion annually on individual healthcare costs during the study period, which represents about 80 per cent of total government healthcare spending,” says Dr. Walter Wodchis, lead author of the paper who is a senior scientist at ICES and a researcher at U of T’s Institute of Health Policy, Management and Evaluation at the Dalla Lana School of Public Health.
“We need to better understand what is driving these costs in order to find ways to lower them while improving the health of Ontario’s patients.”
Among the study’s key findings:
- One per cent of the population accounted for 33 per cent of costs attributable to individual care, with spending at $44,906 or more per person. Five per cent accounted for 65 per cent of costs with a threshold of $7,961 per person.
- Half of Ontario’s population had median annual costs at $333 or less, accounting for only 2 per cent of all allocated expenditures.
- High cost users were also sustained over time. One third of people in the top five per cent of costs continued to need these high levels of care throughout the three years studied.
- Most spending for high cost users was for institutional care, in contrast to lower cost users for whom spending was predominantly for ambulatory care services.
- Costs were far more concentrated among children than older adults: One per cent of children accounted for 38 per cent of all spending on children while the top one per cent among those aged 65 and older accounted for only 16 per cent of spending among that age group.
- The reasons for high healthcare costs also vary with age: children are more likely to require this care due to cancer, while older adults present with chronic conditions.
The study also determined that patients who recently have had high costs are more likely to require costly care in subsequent years. The researchers say this insight could be key to reducing costs while improving care. “People who have high healthcare needs over multiple years are frequently hospitalized, which is the most expensive type of care,” explains Wodchis. “We suggest that it is likely that at least some of these patients are not receiving adequate community-based care that could prevent such repeat hospitalizations. By finding ways to better support the care needs of this small but needs-intensive segment of the population in the community when appropriate, we could substantially lower costs for the healthcare system overall.”
The researchers note that this study is only one step in the ongoing journey to improve healthcare in Ontario, but an essential one. “For example, we know that integrated care programs have had success in diverting frail seniors from acute care, but opportunities for cost reductions for the high cost pediatric groups are quite different,” says Wodchis. “Additionally, young and middle-aged adult high cost users have healthcare needs that are diverse. Understanding the needs of each of these groups at a more granular level – by taking clinical conditions account while examining all types of care – will be essential in improving the quality of healthcare for Ontario’s most complex patients, while reducing costs for the system overall.”
“A 3-year study of high-cost users of healthcare” was published today in the Canadian Medical Association Journal.
Author block: Walter P Wodchis, Peter C Austin, David A Henry.
The Institute for Clinical Evaluative Sciences (ICES) is an independent, non-profit organization that uses population-based health information to produce knowledge on a broad range of healthcare issues. Our unbiased evidence provides measures of health system performance, a clearer understanding of the shifting healthcare needs of Ontarians, and a stimulus for discussion of practical solutions to optimize scarce resources. ICES knowledge is highly regarded in Canada and abroad, and is widely used by government, hospitals, planners, and practitioners to make decisions about care delivery and to develop policy. For the latest ICES news, follow us on Twitter: @ICESOntario
The Dalla Lana School of Public Health is a Faculty of the University of Toronto that originated as one of the Schools of Hygiene begun by the Rockefeller Foundation in 1927. The School went through a dramatic renaissance after the 2003 SARS crisis and it is now the largest public health school in Canada, with over 800 faculty, 850 students, and research and training partnerships with institutions throughout Toronto and the world. With $27-million in research funding per year, the School supports discovery in global health, tobacco impacts on health, occupational disease and disability, air pollution, inner city and Indigenous health, among many other areas. For more information, visit the website.
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