Chronic Disease and Aging: Financial Impact (Beland)

Chronic Disease and Aging: Financial Impact

Speaker: François Béland, PhD, Professor, Department of Health Administration, Université de Montréal.

Dr. Béland spoke on healthcare cost trends and the factors that may be associated with an increase in these costs.

He cited reports that state the aging of the population will influence governmental healthcare costs. Two reports of interest yielded radically different results in respect to how quickly funds allocated for healthcare costs will be consumed. This discrepancy, Dr. Béland stated, brings us to question the validity of the methods used and their use in the debate on financial healthcare sustainability in Quebec.

In their analyses, the authors used a time series (spanning a period of 10 years) that demonstrates that national healthcare costs are on the rise. However, another time series that covers a longer period shows a break in healthcare cost increases: costs decreased over a few years before climbing back up. Dr. Béland noted the importance of these breaks as they complicate the projection of healthcare services and are attributed to economic circumstances.

When healthcare costs are plotted alongside the percentage of the population over 75, the curves are almost parallel. One analyst states that applying a simple regression suggests a significant association, but by applying a good econometric method, this relationship may in fact be false.

Two authors reviewed the works of international economists and compiled a list of institutional and noninstitutional healthcare cost variables. Various non-institutional variables were cited, including national wealth and aging. National wealth was a significant positive variable while aging was not.

Another report showed how during the economic crisis of the 1990’s, national wealth decreased and so did provincial healthcare spending. When another variable, debt service, decreases, healthcare spending increases. Yet another variable, direct transfers from the federal government to the provinces (includes transfers for healthcare costs), affects spending. Dr. Béland asserted these last two variables demonstrate the effects of political decisions. He says that the economic conditions have had a fundamental impact on healthcare spending in the past and that they will certainly continue to do so in the future.

International institutional variables for which there is less increase in healthcare costs are: the family doctor as a first contact for care, physician payment by capitation, an increasing ratio between nearby service expenditures over institutional expenditures, and delivery of public care. These factors are linked to the way that the system is organized.

Dr. Béland noted there are three factors that need to be addressed when speaking of healthcare spending: strong trends, economic conditions, and institutions. He states that aging has not been demonstrated to be a strong trend thus far and has not had an important impact on healthcare costs. It is difficult to predict the specific effects of the economic conditions, but he affirmed that it indeed influences healthcare spending. He also said that institutional variables definitely affect healthcare costs.

Dr. Béland concluded that we need to know how to predict and project healthcare services and additionally that we need to understand how the measures that aim to improve the effectiveness of healthcare services, translate to the macroscopic plan (long-term trends and economic conditions).