CIHI Data: Helping to Bend the Cost Curve

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When the Ontario Hospital Association (OHA) set out to help the provincial government “bend the cost curve” in health care, it turned to data from the Canadian Institute for Health Information (CIHI) to make the case.

Released in 2010 in partnership with the Ontario Association of Community Care Access Centres and the Ontario Federation of Community Mental Health and Addiction Programs, Ideas and Opportunities for Bending the Health Care Cost Curve: Advice for the Government of Ontario was a business case approach to help the province deal with growing health care demands in the face of constrained budgets. 

The report outlined 16 tangible and evidence-based recommendations to find efficiencies while improving access and quality of care. Among them were strategies to better manage costly chronic illnesses, appropriately shift services from hospitals to the community, as well as lower physician and drug expenditures to be more in line with those of other provinces.

“The paper is just full of ideas on how to provide better care and save money,” says Tom Closson, former OHA president and CEO. “The analysis, using CIHI data, is to give the government guidance.”

Each year the OHA also turns to CIHI’s annual Health Expenditures report to compare Ontario’s spending with that in the rest of Canada, including what’s spent on a per capita basis on hospitals, drugs and physicians. 

Specific to hospital spending, Closson says, “In Ontario, we spend about $300 per capita less on hospitals than what’s spent in other provinces. That might not sound like much, but we have 13 million people in this province, so that works out to about $4.1 billion in savings for the current year.”

In other words, in 2010, if the Ontario government had funded its hospitals at the same level as other provinces did, it would have spent $4.1 billion more.

“We refer to that as the hospitals’ efficiency dividend,” Closson says. “We know that Ontario admits fewer people per capita and tends to have shorter lengths of stay, so we thought we’d turn that into dollars.” 

Although the province spends more on drugs and almost 20% more on physicians per capita than the rest of Canada, Closson notes that Alberta is currently spending 54% more per capita on hospitals than Ontario.

“It’s quite a remarkable number, especially because Alberta has a very young population,” he says. “Only 10.5% of their population is older than 65, and it’s the elderly who use hospitals more.”

The efficiency dividend sat at $3.5 billion in 2009 and $2.8 billion the year prior.

“It’s not that we’re looking for $4.1 billion more from the government,” Closson says. “We’re just pointing out that we’ve had effective leadership in Ontario hospitals. By using the data, we can demonstrate that we’re getting value for money for Ontarians. And we’re able to free that money up and use it for other purposes.”