Cost of aging population on health care 'overblown'

This article was originally published by CBC News on October 29th, to go to the CBC News website, please click here

Fears that Canada’s aging population could lead to soaring health-care costs may be greatly exaggerated, say researchers, who suggest that the predicted “grey tsunami” may turn out to be more like a “grey glacier.”

Two studies by health economists at the University of British Columbia say other factors are driving up health-care costs — primarily the growing use of specialists, increasing diagnostic tests for the elderly and higher consumption of ever more costly drugs.

One study, by Steve Morgan, examined total health-care spending in British Columbia from 1996 to 2006, the most recent years for which complete data were available. The other study by Kimberlyn McGrail analyzed statistics on visits and fees paid to B.C. physicians during the same time period.

Both studies found that the per-capita cost of health care rose, even after adjusting for inflation and population changes. They concluded that neither the sharpest rise in cost nor the larger share of the increase was driven by the aging population, but by factors that can be controlled by health-care providers or policy-makers.

“British Columbia’s demographics are reasonably representative of the rest of Canada, so these figures show that nationwide, the health-care system is as sustainable as we want it to be,” Morgan said in a release.

Both he and McGrail, whose papers were published Monday in the journal Healthcare Policy, noted that spending and visits to general practitioners declined during that period. However, the use of specialists — including those focused on diagnostic procedures — went up.

McGrail said the increased costs may reflect an evolving health-care system, not necessarily an expanding one.

‘Such growth is well within the reach of expected economic growth and productivity.’

—Steve Morgan, researcher

“There is no single cause for this shift — it’s the result of millions of treatment and referral decisions by thousands of clinicians,” she said. “But it does reflect that patients are receiving a different style of care than they used to. They are seeing more different doctors and are having more tests done.”

For his study, Morgan looked at total spending on acute-care hospitals and physician-provided medical services, which make up the core of government-funded health care in Canada. For comparison, he analyzed prescription drug spending, which for the most part is not publicly funded.

During the 10-year period, per-capita spending on hospital care and doctor visits increased only slightly faster than the overall 17 per cent inflation rate. In contrast, per-capita spending on prescription drugs rose by 140 per cent.

Population aging caused expenditures on hospital care, medical care and prescription drugs to grow by less than one per cent a year. And despite the aging of the baby-boom generation, Morgan’s projections suggest the demographic’s impact will remain the same over the next 25 years.

“Such growth is well within the reach of expected economic growth and productivity,” he said.

Populations age more gradually

The impact of the aging population is less severe than most people assume because populations age more gradually than individuals, Morgan said. Compared to young people, the elderly are less likely to receive costly interventions for adverse health events, so the greying of the population could actually lead to reduced costs for acute care towards the end of life, he added.

McGrail’s study suggests a perceived physician shortage in the province may have resulted from a gradual increase in diagnostic procedures for elderly patients at the expense of “hands-on” care for the general population.

People under age 25 reduced their doctor visits by 6.5 per cent during the study period, while visits by those 75-plus went up by 18.2 per cent. Spending on diagnostic services went up across all age groups, but for those over 75 the spending increase was significant: up 64 per cent over the study period.

While the number of visits a typical patient made to a particular physician dropped, there was an overall increase in the number of different physicians that a patient saw per year.

“Patients are seeing more different doctors, fewer times each, but overall having more contact with physicians,” said McGrail. “We don’t know if this shift in services has actually led to better outcomes and higher quality of life, or if we are simply giving people more tests and more diagnoses.”

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