Canadian Institute for Health Information
1

2

Contents
• International comparisons
• Prices, utilization and population
• Analysis of growth in utilization per capita
• Analysis of changes to the mix of services and specialties
3

Canada Has a Relatively Low Physician per Capita Rate in Comparison With
OECD Reporting Countries
Spain
Switzerland
Italy
Germany
Sweden P (2006)
France
Australia
United States
United Kingdom P
CANADA
Japan (2006)
Professionally Active or Practising (P)
Physicians per 1,000, 2007
3.4
3.2
3.6
3.9
3.9
3.8
3.8
2.6
2.5
2.2
2.2
4

Canada’s Rate of Growth in Professionally Active
Physicians During the Last Five Years Has Been Greater
Than That of Most Countries Reporting to the OECD
0.1
Average Annual Growth Rates (%): Physicians per 1,000
2.9
2.5
2.2
1.6
1.9
1.8
0.9
1.0
1.1
0.9
0.9
0.5
0.3
Canada Finland
-0.1
France Germany
-0.4
New
Zealand
Spain Switzerland United
States
1998
–2003
2003
–2008
5

Canada Has a Relatively High Nurse-to-Physician
Ratio in Comparison With OECD Reporting Countries
Nurse-to-Physician Ratio, 2007
CANADA
Japan (2006)
United States
Australia
United Kingdom P
Sweden P (2006)
Germany
France
Spain 1.2
2.3
3.0
3.0
3.9
3.8
4.1
4.3
4.6
6

200
190
180
170
160
150
Physician Supply Higher Than Ever
Physicians per 100,000 Population, Canada,
1988 to 2009
7

Alternative Payment Programs (APPs) and
Fee-for-Service (FFS) Expenditure Have
Both Grown Rapidly During the Last Decade
NPDB Expenditure, 1989 to 2008
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
FFS FFS and APP
8

11%
9%
7%
5%
Rates of Increase in Physician Fee-for-
Service Prices Are Accelerating After
Several Years of Moderate Increases
Annual Rates of Increase
13%
1983
1992
3%
1%
-1%
1976 1980 1984 1988 1992
1998
1996 2000 2004
2008
2008
9

Fee-for-Service Price Increases Have Exceeded Rates of Increase in the Government Current Expenditure
Implicit Price Index During the Last Decade
Average Annual Rates of Increase
12%
10%
8%
6%
4%
2%
0%
9.5%
8.6%
3.8%
3.3%
2.7%
3.6%
1.1%
0.5%
1975 –1983 1983 –1993 1993 –1998
Gov’t Current Exp. Implicit Price Index NPDB PCI
1998 –2008
10

140
130
120
110
100
90
Rates of Increase in Physician Compensation
Prices Have Exceeded Rates of Increase in the Industrial Composite Wage Index
Growth in Indices of Industrial Wages and Physician
Compensation: 1998 = 100
150
1998
NPDB PCI
2000 2002 2004
Health and Social Services
2006 2008
Industrial Composite
11

6%
4%
2%
0%
Rates of Change in Prices and Utilization
Have Followed Similar Trends in the
Past Decade
Average Annual Rates of Change in Price and Utilization
10%
8.6%
8%
4.4%
1975 –1983
3.3%
4.2%
0.5%
1.9%
1983 –1993 1993 –1998
NPDB PCI Utilization
3.6%
3.2%
1998 –2008
12

Utilization per Capita Is Increasing After a Period of Relative Stability
5%
Components of Utilization Growth, 1975 to 2008
4%
1.2%
1.2%
3%
1.0%
2%
1%
0%
3.2%
1975 –1983
3.0%
1.0%
2.1%
0.8%
1983 –1993 1993 –1998
Utilization per Capita Population Growth
1998 –2008
13

6%
5%
4%
3%
2%
1%
0%
Increases in the Prices of Physician Services Have
Been the Major Cost Driver of Physician Expenditures
Over the Last 10 Years
8% Average Annual Rates of Expenditure Growth, 1998 to 2008
Average Annual Increase = 6.8%
7%
3.6%
1.0%
1.5%
0.64%
1998
–2008
Utilization per Capita (Adjusted) Population Growth Population Aging FFS Prices
14

Key Points —Prices, Utilization and Population Effects
1. Rates of increase in physician compensation followed rates of increase in the government current expenditure implicit price index prior to
1998. Since 1998, rates of increase in physician compensation have exceeded rates of increase in the government expenditure IPI.
2. Physician compensation has grown faster than wages for other health and social services workers.
3. Physician compensation increases accounted for approximately one-half of annual growth in expenditure since 1998.
4. Population growth and aging have accounted for average annual increases of 1.6% per year in expenditure.
5. Utilization per capita adjusted for aging has accounted for average annual increases of 1.5% per year.
15

Population aging and expenditure
Relative fees and volume of services for populations older and younger than 65
16

Physician Expenditure per Capita by Age and Sex, 2008
$2,500
$2,000
$1,500
$1,000
$500
$0
Male Female
17

Population Growth and Aging Accounted for
Growth in Spending of $3.3 Billion Between
1998 and 2008
Simulated Physician Expenditure With 2008
Expenditure per Capita and 1998 Population (000)
$22,052,951
$18,729,796
1998 Population 2008 Actual
18

2%
1%
0%
Population Aging Has Had a Modest Annual
Effect on Growth of Physician Services
Expenditures in Most Jurisdictions
Average Annual Physician Expenditure Increase
From Demographic Factors, 1998 to 2008
3%
-1%
Population Growth Aging
19

8%
7%
6%
5%
4%
3%
2%
1%
0%
Rates of Increase in Expenditure Have Been
Higher for the Elderly, but Rates Are Also
Relatively High for Those Younger Than 65
Annual Rate of Increase in Physician Expenditure per Capita, by Age Group, 1998 to 2008
20

100%
80%
60%
40%
20%
0%
Higher Expenditure Increases for Elderly
Are Mainly Due to Greater Rates of
Increase in Visit Fees
Rates of Increase in GP/FP Ambulatory Visit Fees,
1998 –1999 to 2008–2009
120%
N.L.
P.E.I.
N.S.
N.B.
Que.
Ont.
Man.
Sask.
Alta.
B.C.
Age 65 and Under Over 65
21

1.5
1.0
0.5
0.0
Most Jurisdictions Show Little or No Change in the Ratio of GP/FP Ambulatory Visits for Persons Older and Younger Than 65
GP/FP Ambulatory Visits per 1,000 Population:
Ratio of Visits by Elderly Population to
Population Younger Than 65
2.5
2.0
N.L.
P.E.I.
N.S.
N.B. Que.
Ont.
Man. Sask.
Alta.
B.C.
2002 –2003 2008 –2009
22

2.5
2.0
1.5
1.0
0.5
0.0
3.5
3.0
Relative Rates for Specialist Visits per
Capita by Persons 65 and Older Have
Increased Slightly
Consultations and Visits per 1,000 Population:
Ratio of Visits by Elderly Population to
Population Younger Than 65
2.59
2.66
2.82
2.86
Medical Specialists Surgical Specialists
2002 –2003 2008 –2009
23

Key Points —Population Aging and Rates of Increase in Utilization per Capita
1. Population aging has been responsible for a relatively modest rate of growth in expenditure: 0.64% per year.
2. Higher rates of increase in expenditure per capita for the elderly are due to higher rates of increase in visit fees for the elderly relative to the non-elderly population.
3. Relative rates of services for the elderly do not appear to have had a significant effect on costs.
24

Mix of services: 10 provinces
Mix of specialties: B.C. case study
25

$120
$90
$60
$30
$0
The Mix of Services Within Specialty
Groups Has Contributed to Increases in Expenditure
FFS Expenditure per Capita in 2008 Dollars With Mix of Insured Services, 1998 –1999 and 2008–2009
$180
$162 $161
$150
$102
$105
$82
$88
Family Medicine Medical Specialists
1998 –1999 2008 –2009
Surgical Specialists
26

A Changing Mix of Services Has Added 0.19% per Year to Expenditure Over the Past Decade
Expenditure per Capita at
1998 Mix of
Services and
2008 Prices
Actual
Expenditure per Capita in
2008 –2009
Value of
Increase
(000)
Percentage
Increase
$346.85
$353.56
$223,276 1.93%
Average
Annual
Increase
0.19%
27

Medical Specialists Have Had Major
Increases in Consultations and
Diagnostic/Therapeutic Services
FFS Services per 100,000 Population:
Medical Specialists
60,000
54,646
50,000
36,787 40,000
30,000
20,000
10,000
19,477
22,510
0
Consultations
1998 –1999
Diagnostic/Therapeutic Services
2008 –2009
28

Surgical Specialists Have Had Major
Increases in Consultations, Major Surgery and Diagnostic/Therapeutic Services
FFS Services per 100,000 Population:
Surgical Specialists
30,000
26,554
25,000
19,009
21,245
20,683
20,000
15,000
10,000
5,000
0
6,585
8,352
Consultations
1998
Major Surgery
–1999
Diagnostic/Therapeutic
Services
2008 –2009
29

Average Annual Increases From Fees,
Population, Volume, Mix of Services and
Mix of Specialties, British Columbia
Average Annual Rates of FFS Expenditure Growth, B.C.,
1998 –1999 to 2008–2009
5%
4%
2.5%
3%
2%
1.0%
1% 0.72%
0.19%
0.45%
0%
Volume Mix of Services Mix of Specialties Population Growth FFS Prices
30

Key Points —Cost Driver Summary
1. Fee increases were the major cost driver for physician expenditure during the last 10 years.
2. Nationally, per capita utilization (adjusted for aging) was the second major cost driver, and population growth and aging were the third and fourth most important.
3. Changes in the mix of services were relatively modest but accounted for measurable increases in cost.
4. As illustrated for B.C., changes in the mix of specialties may be an important cost driver.
31

Future Issues to Monitor
• Increasing supply of physicians
• Increases in fees and payments for physician services
• Utilization of physician services
• Impact of aging baby boomers on physician expenditure
• Relative rates of change in specialists versus family medicine
• Scopes of practice of non-physician health professionals
• Better measures of service provision from alternative payment plans
32

33

Thank You
34