Changes called for as 1% of population accounts for 1/3 of health care spending

Ontario’s Health and Long-term Care Minister is calling for a change in how health care costs are scrutinized in light of research showing that a tiny proportion of the Ontario population accounts for a very large proportion of health care expenditures.

“We need to shift our focus” away from line-by-line scrutiny of hospital, drug and long term care spending  towards “what we spend on patients,” Deb Matthews, told HealthAchieve, the annual meeting of the Ontario Health Association, last month.

Such a focus will help provide better care, and better value for dollars spent, she said.

Of the province’s 13.7 million people, a mere 1% (about 137,000 people) accounted for 34% of Ontario health care expenditures in 2007, according to a report from the Institute for Clinical Evaluative Sciences (ICES), which tracked most major health care costs.

To “qualify” to be in the top 1% category, health care expendiitures for each person were at least $33,335 a year. Altogether,  the 1% accounted for $7.8 billion of the total spending that year of  $23 billion, according to the research.

At the other end of the spectrum, 50% of the Ontario population accounted for about 1% resources in 2007, representing spending of less than  $181 per capita.

Such findings are not new or unique to Ontario. Manitoba research from more than a decade ago revealed the same trend, as has research from the United States, and the United Kingdom has been studying how to act on the information. But a spotlight is being directed to the issue because of the increasing emphasis on accountability and the sustainability of health care, as well as changing demographics and the aging of the Canadian population.

Who is in the 1%?

That the most ill people use the most health care resources is appropriate. But this information raises some important questions: who makes up the 1%, can their health care needs be better (and more cost effectively) managed, and if so, where should investments be made or reallocated?

The individuals who make up the 1% vary from year to year—some remain top users of health for a period of time, while some transition out of the category, notes Ken Lam, whose PhD thesis involved a close examination of Manitoba data.

The Ontario data reveal that about 25% of the highest cost patients remain in that category in the following year, according to health economist Walter Wodchis, who was lead author of the ICES report.

Among the high users are individuals at the end of their lives, people with chronic and sometimes multiple illnesses, accident/trauma survivors, and infants with high health care needs. Clearly, “one size does not fit all” when it comes to addressing the needs of this diverse group, notes Lam, who teaches at York University’s school of  health policy and management.

“Skewed” use of health care resources exists for all ages, conditions

The ICES research indicates that the vast majority (~80%) of those in the top 1% category in Ontario are age 65 and older. But Lam stresses that although the elderly are often pointed to as high users, the unequal utilization of health care resources is a persistent feature for the elderly and for all other age groups. (Those who are over-65, and are in the top 1% category in Ontario, represent about only  6% of the over-65 age population.)

The “skewing” trend  also persists among those with chronic conditions, such as diabetes or asthma, as only a small proportion of sufferers account for a large proportion of health care expenditure, according to research he co-authored.

The health care resource that is most “skewed” towards a small proportion of the population is in-hospital acute care; physician and prescription drug utilization are somewhat more evenly distributed among the population, according to Lam’s Manitoba research, which did not include long term care.

Ontario follows much the same pattern, but also shows that for those over 65 years in the top 1%, the vast majority of expenses are for acute care and long-term care, according to research by Wodchis and others.

Significant structural and funding changes are needed in order to better manage most of the top 1% patients, observers argue.  “We’re good at acute care but not good at providing chronic care or home care.” says Jeff Turnbull, chief of staff at Ottawa Hospital and a former president of the Canadian Medical Association. “We need substantive change. Up to now, we’ve just been playing around the edges.”

Acute care  is now “default” for chronic care management

The problem goes back to the fact that when medicare was established and public coverage was limited to hospital care, physician services, and in-hospital prescription drugs. Health care money is in dedicated “silos” and reallocation is challenging, Turnbull notes.

Still, a number of initiatives are underway to find ways to better manage and integrate care for high users.

For example Wodchis and colleagues, in a project being funded by the Ministry of Health and Long-term Care, are focusing on finding ways to better address the needs of those 65 years and older in the top 1% category, most of whom suffer from one or more chronic diseases.

Better coordination of care is needed to avoid situations where, for example, a patient with both heart failure and kidney failure may be told to take a lower dose of a diuretic (which reduces water in the body) by the endocrinologist and a higher dose by the cardiologist, Wodchis said in an interview.

One challenge with this approach will be to decide which patients qualify for more intensive case management, recognizing that others with similar care needs may benefit from this approach. For example, if the focus of the intervention is on the highest 1% of health care users, is it acceptable that the next 1% not receive the same services?

For his part, Turnbull argues that acute care in hospital is now a default for chronic care management in the current system. Instead, he would like to see much greater emphasis placed on teams of health care professionals providing care for people with chronic illnesses where they live.
The team-based primary care that Ontario has introduced should be built on, so that in addition to having patients come to them, the teams could be required to provide care in homes, in long-term care institutions and in shelters for the homeless, he said. The principle is to provide the most appropriate care in the most appropriate circumstances—when and where needed, Turnbull said.

The “assess and restore” approach to the elderly

Within Canada, Ontario has the highest rate of alternate levels of care —people waiting in hospital to return home, or be admitted to a retirement homes or long term care facility—according to a 2011 report by Dr. David Walker.

In the report,  Walker argued that primary care providers must place a priority on care for the elderly, identify those at risk and actively manage their multiple challenges.

Walker called for an “assess and restore” approach to the frail elderly, aimed at restoring their level of functioning, instead of allowing them to languish in hospital (or elsewhere) while their condition deteriorates.

Along the same lines, long-term care facilities should “focus a portion of their capacity on cyclical, restorative, transitional and respite care programs, while maintaining permanent placement for those with more complex needs,” Walker’s report stated.

Too many of the 1% of high users, such as those with chronic illnesses and people at the end of life, “are forced into the not-useful existing paradigm” of acute care, Turnbull argues. This is an issue being explored by the Canadian Research Network for Care in the Community

Health Minister Matthews appears ready to take action by focusing on those who have high health care needs. In her address last month, she talked about the creation of health networks that will link all the health care providers in a given geographic area who are providing care to individuals with a focus on those using who utilize a high proportion of health resources.

These health link networks would work to ensure that there is one “most responsible provider” for each patient.  How these networks would be created and implemented within the current system of healthcare delivery has yet to be elaborated.

For more coverage on this issue, see the Health Care Checkup in the Toronto Star.
The Ministry of Health and Long Term Care has announced the launch of 19 Health Links.

The comments section is closed.

  • Rees Moerman says:

    When one delves into Canadian health equity, as a share of per capita system resources there is a very uneven distribution with frail seniors being the largest benefactors. Health care will devolve into a health lottery with increasing struggles to get adequate care. As geriatric needs continue to shift more from acute care to chronic care. Population needs have been manageable so far but with the advent of the rapidly aging boomer generation the capacity and economic ‘kettle” will finally tip. The solution will be cost and stress reducing technology-bridge between that of repurposed/reinvented nursing-homes like the Eden/Pioneer/and Greenways model, with more flexible home-care innovations allied with far better telemedical interfaces that affordably unify the two.

  • kathy hardill says:

    Thanks for your point about the social determinants of health, Tara – it think this is bang on – i think increasing communication and collaboration, and the notion of a most responsible provider makes alot of sense vis a vis the medically complex folks and frail elders with multiple health issues – but as Tara says preventing people from ending up with multiple chronic conditions would make alot more sense – peterborough is one of the 19 “early adopters” of the new health link program and interestingly some of the data being looked at in the central east lhin is 30 day readmission rates to ERs for people with mental health or addictions problems – ie these folks are considered to be “high users” of the system – no pun intended – but i wonder why they’re going to ER so much – perhaps health link networks won’t actually be the intervention needed in these situations – perhaps this is more about lack of available resources in the community, lack of safe supportive housing, lack of addictions treatment resources people can get in to in a timely way, lack of detox beds, etc – do people remember when detoxes were being closed a few years ago in favour of “home detox” options which is not so helpful when you have no home – i really appreciate suzanne turner’s comments as well, very pragmatic – although i would suggest we refer to “primary care provider” instead of family doctor since some ontarians have nurse practitioners providing their primary care –

  • Concerned Person says:

    Regarding Tara’s comment that the people in the 1% need complex care are poor is just a sterotypical response. My child is in the 1% with high complex needs but both husband and I work and make good money. These ones in the 1% are diagnosed with serious diseases and most have nothing to do with their economical situation. The last thing they need is more judgement about where they live, etc. %featured%This is about making sure we provide the best possible care to the ones that really need it not aobut where they come from or how much a person makes.%featured%

  • Tara Kiran says:

    %featured%I am guessing that most people in “the 1%” have significant psychosocial challenges — this is likely a common factor across age groups and conditions and can range from problems related to poverty to social isolation to serious mental illness.%featured% Addressing the social determinants of health is likely an important aspect of improving care for the 1%.
    I also suspect that the greatest health savings can be had by preventing folks from becoming “the 1%” (or high-cost patients). Some of the complex scenarios described above are of patients that would not be in the 1% but would be at risk of becoming the 1%.

  • Suzanne Turner says:

    %featured%I think this article highlights the importance of providing comprehensive primary care and the need to empower our family physicians.%featured% Dr. Turnbull says, ” The team-based primary care that Ontario has introduced should be built on, so that in addition to having patients come to them, the teams could be required to provide care in homes, in long-term care institutions and in shelters for the homeless …” I often wonder why the physicians in the metropolitan areas do not look to our rural colleagues for guidance? Our rural colleagues are already doing what is recommended by Dr. Turnbull. In the small communities that I have worked in, resources are low and specialists are few and far between, but family doctors provide care in the office, the ER, the nursing homes and the living rooms of their patients. I do not think we need to re-invent the wheel. We need to go back to building rapport in the family doctor’s office and building confidence in our primary care physicians. Family doctors can and should provide complete health care (from cradle to grave) with attention to the advice of the specialist but should have to the confidence to act as the manager and conductor of care. Most family physicians are familiar with the scenario described by Wodchis the “… patient with both heart failure and kidney failure may be told to take a lower dose of a diuretic (which reduces water in the body) by the endocrinologist and a higher dose by the cardiologist …” I might argue that perhaps the decisions shouldn’t be made by the endocrinologist or the cardiologist but really suggested to the family physician who can help to coordinate the complex milieu that is providing care to the complex family practice patient. As a family physician I am in the unique position of knowing that the diet recommended by the cardiologist isn’t consistent with what is available in the shelter, or that if my patient has to choose between the medication prescribed by the endocrinologist and the antibiotics for their toddler – the toddler is going to win out. I have a unique perspective that can’t be easily articulated in a consult request and therefore, I need to take to the suggestions of the consultant but perhaps modify for the best-interests of my patients. There needs to be more two way conversation between the FMD and the specialists as opposed to the specialist’s consult note that is treated as law. The hallways conversations and doctor’s lounge case conferences that I have witnessed in small towns are really integral into providing this complex care. We have a lot to learn from our rural colleagues and that perhaps we shouldn’t argue for completely redesigning the system of primary care, but recognizing the family physician as an integral part of the team as opposed to a referral machine. We need to open the lines of communication between specialists and FMD, we need to integrate FMD into the hospitals in our cities so that are providing more primary care in the patient’s home base hospital (rather than just in the clinic) and provide opportunities for those hallway consultations and lounge case conferences so that our specialists understand who is making the referrals and the challenges faced by the patients in their community.


Ann Silversides


Ann is a journalist and specializes in health policy, writing and editing for a variety of health research institutes, associations and labour unions.

Mike Tierney


Mike is the Vice President of Clinical Programs at Ottawa Hospital.

Republish this article

Republish this article on your website under the creative commons licence.

Learn more