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1
Canadian Institute for Health Information
Physician Cost Drivers
2
3
Contents
• International comparisons
• Prices, utilization and population
• Analysis of growth in utilization per capita
• Analysis of changes to the mix of services and specialties
4
2.2
2.2
2.5
2.6
3.2
3.4
3.6
3.8
3.8
3.9
3.9
Japan (2006)
CANADA
United Kingdom P
United States
Australia
France
Sweden P (2006)
Germany
Italy
Switzerland
Spain
Professionally Active or Practising (P) Physicians per 1,000, 2007
Canada Has a Relatively Low Physician per Capita Rate in Comparison With OECD Reporting Countries
5
0.1
1.9
0.51.0
-0.4
2.9
2.2
0.9
1.6
0.9
-0.1
1.1
2.5
1.8
0.9
0.3
Canada Finland France Germany New Zealand
Spain Switzerland United States
Average Annual Growth Rates (%): Physicians per 1,000
1998–2003 2003–2008
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
6
1.2
2.3
3.0
3.0
3.8
3.9
4.1
4.3
4.6
Spain
France
Germany
Sweden P (2006)
United Kingdom P
Australia
United States
Japan (2006)
CANADA
Nurse-to-Physician Ratio, 2007
Canada Has a Relatively High Nurse-to-Physician Ratio in Comparison With OECD Reporting Countries
7
150
160
170
180
190
200
Physicians per 100,000 Population, Canada, 1988 to 2009
Physician Supply Higher Than Ever
8
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
($0
00
,00
0)
NPDB Expenditure, 1989 to 2008
FFS FFS and APP
Alternative Payment Programs (APPs) and Fee-for-Service (FFS) Expenditure Have Both Grown Rapidly During the Last Decade
9
1983
1992
1998
2008
-1%
1%
3%
5%
7%
9%
11%
13%
1976 1980 1984 1988 1992 1996 2000 2004 2008
Annual Rates of Increase
Rates of Increase in Physician Fee-for-Service Prices Are Accelerating After Several Years of Moderate Increases
10
9.5%
3.8%
1.1%
2.7%
8.6%
3.3%
0.5%
3.6%
0%
2%
4%
6%
8%
10%
12%
1975–1983 1983–1993 1993–1998 1998–2008
Average Annual Rates of Increase
Gov’t Current Exp. Implicit Price Index NPDB PCI
Fee-for-Service Price Increases Have Exceeded Rates of Increase in the Government Current Expenditure Implicit Price Index During the Last Decade
90
100
110
120
130
140
150
1998 2000 2002 2004 2006 2008
Growth in Indices of Industrial Wages and Physician Compensation: 1998 = 100
NPDB PCI Health and Social Services Industrial Composite
Rates of Increase in Physician Compensation Prices Have Exceeded Rates of Increase in the Industrial Composite Wage Index
11
12
8.6%
3.3%
0.5%
3.6%4.4% 4.2%
1.9%
3.2%
0%
2%
4%
6%
8%
10%
1975–1983 1983–1993 1993–1998 1998–2008
Average Annual Rates of Change in Price and Utilization
NPDB PCI Utilization
Rates of Change in Prices and Utilization Have Followed Similar Trends in the Past Decade
13
3.2% 3.0%
0.8%
2.1%
1.2%1.2%
1.0%
1.0%
0%
1%
2%
3%
4%
5%
1975–1983 1983–1993 1993–1998 1998–2008
Utilization per Capita Population Growth
Components of Utilization Growth, 1975 to 2008
Utilization per Capita Is Increasing After a Period of Relative Stability
14
1.5%
1.0%
0.64%
3.6%
0%
1%
2%
3%
4%
5%
6%
7%
8%
1998–2008
Utilization per Capita (Adjusted) Population Growth Population Aging FFS Prices
Average Annual Rates of Expenditure Growth, 1998 to 2008Average Annual Increase = 6.8%
Increases in the Prices of Physician Services Have Been the Major Cost Driver of Physician Expenditures Over the Last 10 Years
15
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.
16
Analysis of Real Growth in Utilization per Capita
Population aging and expenditure
Relative fees and volume of services for populations older and younger than 65
17
$0
$500
$1,000
$1,500
$2,000
$2,500
Male Female
Physician Expenditure per Capita by Age and Sex, 2008
18
$18,729,796
$22,052,951
1998 Population 2008 Actual
Simulated Physician Expenditure With 2008 Expenditure per Capita and 1998 Population (000)
Population Growth and Aging Accounted for Growth in Spending of $3.3 Billion Between 1998 and 2008
19
-1%
0%
1%
2%
3%
Average Annual Physician Expenditure Increase From Demographic Factors, 1998 to 2008
Population Growth Aging
Population Aging Has Had a Modest Annual Effect on Growth of Physician Services Expenditures in Most Jurisdictions
0%
1%
2%
3%
4%
5%
6%
7%
8%
Annual Rate of Increase in Physician Expenditure per Capita, by Age Group, 1998 to 2008
Rates of Increase in Expenditure Have Been Higher for the Elderly, but Rates Are Also Relatively High for Those Younger Than 65
20
0%
20%
40%
60%
80%
100%
120%
N.L. P.E.I. N.S. N.B. Que. Ont. Man. Sask. Alta. B.C.
Rates of Increase in GP/FP Ambulatory Visit Fees, 1998–1999 to 2008–2009
Age 65 and Under Over 65
Higher Expenditure Increases for Elderly Are Mainly Due to Greater Rates of Increase in Visit Fees
21
22
0.0
0.5
1.0
1.5
2.0
2.5
N.L. P.E.I. N.S. N.B. Que. Ont. Man. Sask. Alta. B.C.
GP/FP Ambulatory Visits per 1,000 Population: Ratio of Visits by Elderly Population to
Population Younger Than 65
2002–2003 2008–2009
Most Jurisdictions Show Little or No Change in the Ratio of GP/FP Ambulatory Visits for Persons Older and Younger Than 65
23
2.59 2.822.66 2.86
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Medical Specialists Surgical Specialists
Consultations and Visits per 1,000 Population: Ratio of Visits by Elderly Population to
Population Younger Than 65
2002–2003 2008–2009
Relative Rates for Specialist Visits per Capita by Persons 65 and Older Have Increased Slightly
24
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.
25
Analysis of Changes to the Mix of Services and Specialties
Mix of services: 10 provinces
Mix of specialties: B.C. case study
26
$162
$102
$82
$161
$105$88
$0
$30
$60
$90
$120
$150
$180
Family Medicine Medical Specialists Surgical Specialists
FFS Expenditure per Capita in 2008 Dollars With Mix of Insured Services, 1998–1999 and 2008–2009
1998–1999 2008–2009
The Mix of Services Within Specialty Groups Has Contributed to Increases in Expenditure
27
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
Average Annual
Increase
$346.85 $353.56 $223,276 1.93% 0.19%
28
19,477
36,787
22,510
54,646
0
10,000
20,000
30,000
40,000
50,000
60,000
Consultations Diagnostic/Therapeutic Services
FFS Services per 100,000 Population: Medical Specialists
1998–1999 2008–2009
Medical Specialists Have Had Major Increases in Consultations and Diagnostic/Therapeutic Services
29
19,009
6,585
20,68321,245
8,352
26,554
0
5,000
10,000
15,000
20,000
25,000
30,000
Consultations Major Surgery Diagnostic/Therapeutic Services
FFS Services per 100,000 Population: Surgical Specialists
1998–1999 2008–2009
Surgical Specialists Have Had Major Increases in Consultations, Major Surgery and Diagnostic/Therapeutic Services
30
0.45%0.19%
0.72%
1.0%
2.5%
0%
1%
2%
3%
4%
5%
Average Annual Rates of FFS Expenditure Growth, B.C., 1998–1999 to 2008–2009
Volume Mix of Services Mix of Specialties Population Growth FFS Prices
Average Annual Increases From Fees, Population, Volume, Mix of Services and Mix of Specialties, British Columbia
31
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.
32
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
33
Questions?
34
Thank You