Canadian Medical Association Journal
January 20, 2004
Does universal comprehensive insurance encourage unnecessary use?
Evidence from Manitoba says “no”
By Noralou P. Roos, Evelyn Forget, Randy Walld and Leonard MacWilliam
Many have argued that escalating health care costs in Canada are exacerbated by the fact that patients face no costs when they visit doctors or use hospital services. A zero price, it is said, leads to unnecessary use of the system.
Various policies focusing on reducing patient demand have been proposed to address this purported overuse – user fees and medical savings accounts being the 2 most popular. All are supposed to work by creating an incentive for people to decide whether their intended use of the health care system is really necessary. We know that user fees are effective in reducing physician visits by those with low economic status, but have little impact on physician use by the more affluent or on hospital use.
Is there any evidence that a universal health care system encourages the less affluent to see physicians more often than necessary? We have already shown that the great majority of people incur few health care expenditures while a small group incurs high expenditures. This report extends our earlier work by first examining the health and socioeconomic characteristics of those in each expenditure group. We then assess whether residents of low-income areas overuse health care services (particularly physicians) relative to their health status.
Results
Although the data suggest that the health of those with lower socioeconomic status is worse than those of higher status at every level of health care expenditure, there was no pattern of higher physician expenditures on those
whose socioeconomic status is lower.
The 70% of the population on which the province spends 10% of its health
care dollars scored well on all health indicators, and the 10% of the population on which 74% of the dollars are spent scored poorly. In each expenditure group, those with lower socioeconomic status had poorer health.
Despite their poorer health, in each expenditure group, residents of the neighbourhoods with the lowest household incomes incurred physician expenditures that were similar to those of residents of wealthier neighbourhoods.
Interpretation
Most residents of Winnipeg are healthy, infrequent users of physicians and hospitals. Those incurring high health care costs are sick by every measure used. These high-cost users are drawn from every neighbourhood and every
socioeconomic group, and their health care expenditures are driven by hospital costs. High-cost users who are residents of low-income neighbourhoods incur more hospital costs. Other research based on review of medical records has shown the acuity levels of hospitalized patients in the lowest socioeconomic group to be just as high as acuity levels of hospitalized patients in higher socioeconomic groups. Hence the greater use of hospitals by residents of low-income neighbourhoods should not be dismissed as “social admissions”; their high use is consistent with their poorer health status.
Physician visits are the one type of health care use where at least the first visit in any episode is strongly influenced by patient behaviour. The Winnipeg data confirm that physician use by low-income groups is already lower than would be expected given their health status (or physician use by high-income groups is higher than one would expect).
The patterns of health care costs that we examined are driven by poor health and hospital expenditures. Policies aimed at reducing patient demands, such as user fees and medical savings accounts, are not likely to reduce overall costs. User fees discourage physician contact, not hospital use. Thus, user fees would discourage preventive contacts, particularly among the poor, a group in which pap smears, childhood immunizations and prenatal care are already known to be underutilized. Since the RAND study demonstrated that user fees discourage patients from seeking both appropriate and inappropriate care, their effects on even the healthy poor would be pernicious.
Physicians are the gatekeepers to hospitals, and the health status of the patient largely drives the decision to admit and, hence, expenditure patterns. Although higher income patients may be more articulate in asking for high-profile surgical treatments, overall those with the poorest health status show the highest hospital use and expenditure rates. There is scope for decreasing hospital expenditures by focusing on evidence-based medicine, physician practice patterns and hospital management. However, user fees and medical savings accounts are unlikely to contribute to this process.
http://www.cmaj.ca/cgi/content/full/170/2/209?maxtoshow=&eaf
Comment: 70% of the Winnipeg population consumes only 10% of health care costs. For this healthy sector, creating sensitivity to health care costs through user fess or health saving accounts would have a negligible impact on total health care spending since only 10% of the budget would be manipulated.
It should come as no surprise that Canada spends most of its universal health care funds on people in poor health who need health care regardless of socioeconomic status. Since the health care system should be designed to enable access for those with needs, user fees are superfluous for the affluent but would create financial barriers for low income individuals with legitimate health care needs.
This and other studies show that skyrocketing health care costs are not due to healthy people demanding unnecessary care. Consequently, user fees and health savings accounts cannot possibly have a significant impact on controlling health care costs. Reasonable solutions are possible only once the real problems are more precisely defined.
For a brief discussion of some of the true reasons for cost increases and a suggestion for more rational solutions, read PNHP’s written testimony for the House Ways and Means Committee hearing on the Trustees 2004 Report for Medicare:
https://pnhp.org/news/2004/march/pnhps_written_testim.php?page=all