Why five per cent of Ontario residents account for most of province's health costs

Five per cent of Ontarians account for 65 per cent of provincial health care costs attributable to individual care with the top one per cent accounting for one-third of these costs overall, new research shows. 

“Ontario spent more than $30-billion annually on individual health care costs during the study period, which represents about 80 per cent of total government health-care spending,” says Walter Wodchis, lead author of the paper and an associate professor in the Institute of Health Policy, Management and Evaluation at the University of Toronto's Dalla Lana School of Public Health. 

The study, “A Three Year Study of High Cost Users of Health Care” was published today in the Canadian Medical Association Journal. It reviewed anonymized patient records for nearly 15 million Ontarians between 2009 and 2011 – making it the largest such survey completed to date and the first in Canada to evaluate an entire province's health care costs at the individual patient level.

Researchers examined patterns in cost and use for a wide range of provincial health care services, including drugs and lab tests as well as physician visits, home care visits, continuing care and all levels of hospitalization. 

Among the study’s key findings, researchers found that one per cent of the population accounted for 33 per cent of costs attributable to individual care, with spending at $44,906 or more per person. Five per cent accounted for 65 per cent of costs with a threshold of $7,961 per person.

On the flipside, half of Ontario’s population had median annual costs at $333 or less, accounting for only 2 per cent of all allocated expenditures.  

“We need to better understand what is driving these costs in order to find ways to lower them while improving the health of Ontario’s patients,” said Wodchis, who is also a senior scientist at the Institute for Clinical Evaluative Sciences (ICES).

The study also found that patients who recently have had high costs are more likely to require costly care in subsequent years. The researchers say this insight could be crucial to reducing costs while improving care. 

“People who have high health-care needs over multiple years are frequently hospitalized, which is the most expensive type of care,” explains Wodchis (pictured at right). “We suggest that it is likely that at least some of these patients are not receiving adequate community-based care that could prevent such repeat hospitalizations.

“By finding ways to better support the care needs of this small but needs-intensive segment of the population in the community when appropriate, we could substantially lower costs for the health care system overall.”

The researchers note that this study is only one step in the ongoing journey to improve health care in Ontario, but an essential one.  

“Understanding the needs of all Ontarians at a more granular level – by taking clinical conditions into account while examining all types of care – will be essential in improving the quality of health care for Ontario’s most complex patients, while reducing costs for the system overall,” said Wodchis.

Nicole Bodnar is a writer with the Dalla Lana School of Public Health and Kathleen Sandusky is a writer with the Institute for Clinical Evaluative Sciences