Our health care system is inefficient. What can we do about it?

The Canadian health care system is inefficient. It will come to no one’s surprise. Most Canadians agree that we need to improve the efficiency of the health system and get better value from the dollars invested in health care. In fact, all countries struggle with this challenge.

We were interested in getting a better understanding of what drives inefficiency in Canada, and so we undertook a study that measured efficiency and its determinants across the LHINs and Regional Health Authorities. Through this work we were able to put a number on the efficiency gap for the first time – we estimated it to be between 18% and 35% which amounts every year to a potential 24,500 treatable deaths that could have been prevented.

So how can we become more efficient?

In the last few years, experts such as the IOM, Drummond Commission, and the Institute for Competitiveness and Prosperity have made several recommendations for reducing waste and improving efficiency in health care. Mostly the discussion has been centered on improving the way services are organized and delivered, for example by reducing duplication of tests, expanding scopes of professional practice, and reducing medical errors. All of these are valuable initiatives dealing with the supply of health services.

But what about the demand for health services? Could it not be the case that a population with less healthy behaviours is more complex to treat, even for problems not directly related to their behaviours? For instance, colon cancer may be more costly to treat among smokers than non-smokers.

In our study we confirmed that inefficiency relates to the well-known organizational challenges in our system. For instance, regions are more inefficient when they have higher rates of hospital readmissions, and when their hospitals are being used to treat patients who would be better treated elsewhere.

But more interestingly, we found that the demand side can’t be ignored. Efficient regions were also those that were able to keep their populations healthy and to prevent them from becoming ill and needing health care in the first place. For example, regions with a lower prevalence of smoking and physical inactivity were more efficient. Also, regions with healthier populations on average, as measured by lower prevalence of multiple chronic conditions, were more efficient.

Overall, we found that reducing inefficiency in the health system will depend both on improving the ways services are organized and delivered, but perhaps even more so on taking initiatives targeting population health. In other words, the efficiency gap cannot be closed without acting both on the delivery of health care services and on improving the health of populations through public health efforts.

While both are very challenging tasks, there is plenty of evidence available for decision makers to draw on. In particular, there are interesting examples of health system leaders shifting their resources into areas outside the acute sector to better meet the needs of high users of health care services – thereby improving outcomes without increasing the overall costs of services. For example, the work done at The Ottawa Hospital to better integrate health and social care services for the homeless population seems to have reduced use of hospital emergency rooms and improved outcomes.

But there is much more research that needs to be done. The importance of investing in broader determinants of health is well established. However there is little evidence to help make decisions in how to spend the next dollar available. Should it be spent in early childhood development, for example, as opposed to the next breakthrough cancer drug? These types of cost-effectiveness studies that compare the efficiency of spending on interventions tackling the important risk factors for ill-health with more traditional acute care interventions are difficult to do and rare – but they are needed to tackle the efficiency gap.

The comments section is closed.

  • syed says:

    There is serious shortage of doctors in Ontario. Existing doctor’s (I call it a mafia), influence the government/institutions so the new and foreign doctors cannot get into the system. Existing doctors are making huge amount of money because of shortage of doctors, and people have to wait long time for treatment. When people don’t get treatment, they have no option but to go the emergency department of hospitals.
    People need to organize protest in front of Queens Park, so the government does something about it. Invite reporters from international media to report the protest.

  • gatorshoes says:

    When a patient issue arises, your GP could report it on a digital ticket that doesn’t close until the issue is resolved. This ticket could be viewed by a higher power so that it can get prioritized. I know from personal experience that this would be more efficient than leaving the patient flounder for help. GP’s are generalists who aren’t always on the ball.

  • Kevin says:

    There’s so much inefficiency in our medical that seems easy to fix, why is government not making it a priority as we could save a fortune and help so many more people.

    • syed says:

      Existing doctors group is like a mafia. They influence government and other institutions so that new doctors and foreign doctors don’t get into the system. Existing greedy doctors are making huge money because of shortage of doctors, and patients have to wait months and months to get any treatment.
      People of Ontario need to organize protest in Toronto to tell the government to do something about it, and invite international media for coverage of protest.

  • john paterson says:

    would it help also to pay institutional providers for work done instead of for just “showing up” This might apply for example to hospitals. Shouldn’t our tax dollars be paid for procedures performed, rather than for the cost of overall operations. Surely somewhere in the western world a lot of this data would be available and in time with parallel systems to gather real Canadian data a viable costing for the many thousand proceedures performed here could be developed. Obviously adjustments for rural deliveries, higher regional operating costs ect, and other real variables would need to be built in. I think in time such a change in approach would reward efficiently rather than perhaps bloated infrastructure and motivate inefficient operations to find the right mix of management capability and systems to upgrade in order for funding to be at the level needed.

  • Karl Leopold says:

    There is so much emphasis on prevention to improve healthcare efficiencies, as though lifestyle interventions will somehow make a magical difference in the serious chronic illnesses that are so expensive! But if you know what lifestyle changes patients have to make to avoid getting multiple sclerosis, muscular dystrophy, type 1 diabetes, and the whole range of autoimmune diseases, then please report in here please to receive your Nobel Prize in Medicine! Countless cases of cancer, heart disease, renal failure, and neuropathy are due to genetic, idiopathic, or unknown causes, which no strategy can ever prevent.

  • Bea says:

    A good percentage (easily 50%+) of all persons employed in the Ontario Health Care industry – in Toronto: CCAC, associated profit and non-profit nursing support, in hospital administration, some nurses, as well as nursing support as well as homecare profit and non-profit support, as well as some doctors, especially student doctors are poorly trained, or are allowed to have laxed attitudes towards patient care – very bad for being in an industry that badly requires standards. I think a lot of it is because of union attitudes, and its about their job first before customer care. It also seems to have become an industry run by the medical profession, who oversee themselves in all aspects. Of course needless to say we know what happens in management – and especially financial accountability when like kind oversees themselves.

    The battle cry is “We are always under funded and understaffed”. Some people do so much with so little and some people do so little when they have so much more it is pathetic.

    I believe it has become this simple, a form of self serving corruption which eats away at the purpose of industry, to heal, help and comfort. Very sad that this is the best the people responsible can do in a country such as Canada.

    Yes I think it is that simple! I could give many personal example which I have experienced since the acute illness of a family member, which would take too long in this venue, but which could be a tool to shame and expose the poor standards offered by and in our health care system.

    Its funny, I just noticed that (Ron Wray’s) comment basically says the same thing. Inefficient, which also means waste.

    • Sarah says:

      I agree! Doctors should not regulate themselves. And there is a lack of accountability in the system. True leadership requires accountability.

  • John says:

    In my opinion, there is nothing that can be done to fix our health care, and l wouldn’t even try. Our health care is like this country, a total waste.
    When and if l get the opportunity, l am leaving this country.

    • Melinda says:

      Me too.

    • syed says:

      I have the same goal. But in the mean time I will try my best to make some change. There is serious shortage of doctors. People get together for protest in Toronto to influence government to do something about this. Existing doctors is like a mafia. They influence government and other organizations so new and foreign doctors don’t get into the system. Because of shortage of doctors, existing doctors are making huge money, and patients are waiting month/years to get treatment.

  • Janice Gilners says:

    Cost effective action related to the research already done would be a wise use of dollars, in my opinion.

  • Miriam Pauline says:

    Indications for MRSA screening at the ottawa hospital makes no sense. Everyone transfered from another hospital, nursing home, or another unit in our hospital (even if admitted for less than 24 hours on that previous unit) has to be tested. However, if the patient comes from home they do not have to be screened (whether or not they were hospitalized in the last week/month or year). There’s a huge cost that is being poorly managed.. and that is just one.

  • Katrina Prystupa says:

    I am in Ontario rather than BC. But from the perspective of someone who has a relatively rare disorder (Ehlers Danlos Syndrome), and who is involved with others with the same condition, my main issue is the lack of willingness on the part of physicians, nurses and the health care system in general to consider any cause for symptoms or disability which is not right in their face in the form of an obvious simple diagnosis. Even if you are referred to a specialist, they typically insist on revisiting several incorrect simple diagnoses ignoring the rare condition you have already been diagnosed with (even when as in my case, your diagnosis has been confirmed by more than one specialist). The result is that if you have an unusual condition, you often have to see 10 or 15 doctors and have 40 or 50 useless medical appointments before anyone is prepared to address your health conditions to find the true cause — and this continues after diagnosis because there are no primary care providers who deal with unusual conditions –so you get shuffled about without any real assistance. If your PCP is not familiar with your condition (and as a general rule they are not, and don’t take the time to become familiar), they dismiss you with platitutes that are generally unhelpful. Or send to someone else who will then do the same thing. PCPs have 10 minutes (15 in theory) to deal with you, and if you have 12 symptoms that are connected, the doctor will never connect the dots becaue you are only allowed to talk about 1 or 2 in each visit. And the health care system will not fund out of country care for those who have rare conditions and who have no treating specialists at home — because you need a local treating specialist to say it’s required. It’s a catch-22. Good health care is available if you have the good fortune of having only popular health problems — those that are common and don’t invoke the holier than thou dismissiveness of health care professionals. Otherwise, it is generally nothing but frustration and a waste of time for the patient — and a complete inefficently and wasteful use of health care resources. Instead of spending an hour or two assisting a patient up front, the system spends hundreds of hours, spread out over several different health care professionals over a period of months or years, as everyone tries to pass the buck (in this case the patient) to someone else.

  • Lorraine Burgess says:

    Lorraine Burgess / Trigeminal Neuralgia Support Newfoundland and Labrador

    I agree with the need to educate populations on healthy living to prevent them from becoming ill and needing health care in the first place. I also agree that we need to improve the efficiency of the health system and get better value from the dollars invested in health care. Maybe one way to do this is to improve on training for health care professionals especially in areas of rare diseases and chronic pain.

    I am aware of one young man who has been in hospital for more than three weeks, not because he needs to be there for treatment, but because he has a rare disease [they have determined that it could be one of two rare diseases] and the Doctors can’t decide which disease to treat him for. More funding must be put in place for research of rare diseases. Training must start with new medical students so they are better equipped to care for today’s chronic pain patients.

    On Monday, the government of British Columbia announced a $1-million grant to support Pain B.C.’s programs, which includes online and in-person pain management consultations for patients and educational opportunities for doctors, pharmacists, nurses, and other health care workers. The $1-million grant is in addition to a $1,255,000 investment the Ministry of Health had made to Pain B.C.’s doctors education program, which launches a new session today. This is a step in the right direction.

    As for reaching the health care experts of the future, Canada’s Royal College of Physicians and Surgeons recently accredited a brand new pain medicine sub-speciality. Medical schools across the country are now in the process trying to launch their programs, but the University of British Columbia says it has not secured funding for a pain medicine program. The Canadian Government needs to put more funding in place for training health care professionals in pain management and research. This training must happen across Canada, not just in one province.

    1 in 5 Canadians struggles with chronic pain and at least 10 per cent of patients in emergency and the after-hours clinic have pain issues. I am an advocate for chronic pain sufferers, specifically people who suffer from the chronic pain of trigeminal neuralgia and nerve related facial pain. The problem that these people encounter every day is lack of knowledge about their disease when they seek help from the health care system. Many of them spend years trying to get a correct diagnoses and have to visit more than one Doctor just to get adequate care to control their pain and usually end up in hospital emergency for the same reason. Many of these patients have to research online just to understand trigeminal neuralgia and what their treatment options are, they cannot get information from health care professionals. It’s a sad commentary on our health care system when patients know more about their disease than the Dr’s who are treating them. Physicians tend to be uncomfortable admitting that they don’t know how to treat them. Too often, they feel it’s a threat to their skill, authority, or expert status to say they simply don’t know what’s causing the symptoms. Many times Physicians default to blaming the patient by implying ‘it’s all in your head’.



  • Kathleen Finlay | Patient Protection Canada says:

    One of the more underreported efficiencies that could be realized in the healthcare system is the cost associated with the epidemic of preventable medical harm that by some estimates kills up to 49,000 hospital patients in Canada each year. The costs to deal with these incidents are estimated in a recent study at between $2 billion and $2.5 billion annually in Ontario alone.

    Yet prevention of these deaths, so catastrophic for patients and families because they are for the most part avoidable, are rarely discussed in terms of the unnecessary drain on healthcare funds they represent. It makes little sense to ignore these facts while attempting to tackle other more intractable obstacles in the system.

    But it is also clear, as we have suggested on several occasions at Patient Protection Canada, that change will not occur until political leaders, policy makers and the public are prepared to recognize this epidemic of hospital harm and brand it for what it is: an unacceptable burden on taxpayers and families that has no place in a modern, caring and efficient healthcare system.


  • Shawn Whatley says:

    Currently, we manage demand by berating patients for seeking care in the ‘wrong’ place and for not taking good enough care of themselves. We blame patients instead of the system. You do raise an important point: we have to look at both supply and demand.

    Medicare efficiency lags because leaders do not have freedom to maneuver. Shackled with an exponential increase in legislation, contracts without any productivity incentives (negotiated by government), and external ministries exerting jurisdiction over process (e.g., Ministry of Labour) means hospitals cannot make major changes to efficiency.

    When will we realize that healthcare is complex, not complicated? We cannot improve things by managing it more; we need to stop micro-managing it.

    Thanks for a great post on a very important issue!



    • Bill Murphy says:

      The more government is involved in anything, the less efficient and effective it becomes.

      It is high time for the government to get out of health care delivery.

  • Ron Wray says:

    It is fitting this report is released on the 40th anniversary of A New Perspective on the Health of Canadians (Lalonde Report). The notion that health and health care efficiency is more than the health care services is hardly a new or radical idea. There is a long legacy of reports and massive body of research theoretically and empirically articulating population health/social determinants of health. All reinforcing the simple, but compelling, analogy that it is smarter to turn off/down the tap rather than try to bail faster and more efficiently when the bath tub is overflowing.

    Meanwhile, 25 years ago in Ontario we had the Panel on Health Goals and the Premier’s Council on Health Strategy Premier’s Council trying to articulate a pathway towards improving the technical efficiency of health care system while establishing a population and community health approach to allocations and outcomes. Trying to take us from a health care system to a ‘system of health’; a critical distinction in vision and concept that was somehow lost.

    So when we stand back in Ontario 2014 and observe current health care policy what do we see? Essentially a system management and performance measurement structure focused on very narrow parameters of hospital technical efficiency. Wait list management. Clinical health care quality. Concentrated efforts on high health care users. All valuable initiatives, yet constructed with blinders on to a wider perspective on health.

    While the report tells us little that is qualitatively new, let’s hope this excellent report is a quantitative reminder to all that we might in fact be moving backwards in many ways. Perhaps not only trying to bail faster, but actually turning the tap higher when doing so.


Jeremy Veillard


Jeremy Veillard is the Vice-President, Research and Analysis, at the Canadian Institute for Health Information and an assistant professor (status only) at the Institute for Health Policy, Management and Evaluation at the University of Toronto.

Sara Allin


Sara Allin is Senior Researcher at the Canadian Institute for Health Information.

Michel Grignon


Michel Grignon is an associate professor with the departments of Economics and Health, Aging & Society at McMaster University and Director of the Centre for Health Economics and Policy Analysis (CHEPA).

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