THUNDER BAY -- Physicians are the second-largest component of provincial government health spending in Canada, averaging about 20 per cent of overall health-care budgets and constituting one of the fastest-growing public health-sector costs of recent years. This is despite the fact Canada has relatively few physicians compared with many other developed countries.
According to 2013 Organization for Economic Co-operation and Development health statistics, at 2.4 practising doctors per 1,000 people, Canada ranks 28th of 34 OECD countries. These countries range from a high of Greece, with 6.1 practising doctors per 1,000 people, to Chile's low of 1.6. Canada is just behind the United States at 2.5 and ahead of Japan, Mexico and Poland -- all tied at 2.2.
Recent Canadian growth in physician ranks has some pundits alarmed. In a new study for Health Policy, however, I demonstrate it is not growing physician numbers we need to worry so much about. The greater strain on our health budgets will come not from more doctors, but from more doctors earning more while working less.
Estimated determinants of provincial government health spending show physician numbers alone are indeed a positive driver of health-care spending after controlling for other factors. From 1975 to 2009, the increases in physician numbers accounted for a range of about three to 13 per cent of the increase in average real per-capita total provincial government health expenditures, ranging from a low of two to eight per cent for Manitoba to a high of five to 18 per cent for Quebec.
These results support the conventional wisdom that expansion in the number of billing physicians is itself a driver of health-system spending. Yet physician numbers contribute less to spending increases than do increasing fees and service volumes. Indeed, a Canadian Institute for Health Information study on health cost drivers found new technology, utilization and price inflation at the top of the list, along with population growth and aging.
We also need to recognize that many of our doctors are working fewer hours than in generations past. One study found 27.7 per cent of Canadian family doctors reduced their work hours between 2005 and 2007, and 33.9 per cent of them planned further reductions in their weekly work hours between 2007 and 2009. Only 8.1 per cent planned to increase their weekly working hours.
Another study found younger and middle-aged family physicians carried smaller workloads than their same-age peers a decade earlier. Older physicians, many approaching retirement, are carrying a heavier workload relative to younger physicians.
These payments to physicians for their services, according to CIHI, continue to grow, rising six per cent in 2010-11 after increases of 9.7 per cent in 2008-09 and 7.9 per cent in 2009-10. While total physician numbers are growing, the workloads for many physicians appear to have declined, but their compensation has not.
Doctors do work long hours, and it is understandable they may desire a better work-life balance. In an era of tight public budgets, however, having more physicians doing less and costing more may be seen as a luxury. This sentiment was undoubtedly a driver behind Ontario's recent decision to tackle physician fees, especially given that physicians in Ontario account for about one-quarter of the government's health spending -- the highest share in the country.
The recent increases in physician numbers from ramped-up medical school enrolment may not be the biggest cause for concern when it comes to future health-care spending. Rather, the drivers of public health-care spending are a complex interaction between physician numbers, physician decision-making, physician workload, diagnostic and drug technologies, population growth, aging, the cost and deployment of human resources, provincial health-system institutions and the role of demand-side economic variables such as incomes and patient preferences.
So what can be done? Future cost control in health spending will need to either restrain growth in service volumes and utilization -- an unpopular move with the public -- or it will need to tackle fees much more directly -- an unpopular move with health-care providers. One thing is certain: The recent trend toward doing less for more is not a sustainable option.
Livio Di Matteo is an adviser with EvidenceNetwork.ca and professor of economics at Lakehead University. His recent study, Physician Numbers As a Driver of Provincial Government Health Spending in Canadian Health Policy, appeared in Health Policy.