What’s really driving high-cost use of health care

So-called “high-cost users” of health care – the 5% of the population who use nearly two-thirds of health care resources – have become a major policy focus, both in Canada and abroad. But in the rush to save money on the care of patients who are already high-cost users, too little attention has been paid to what truly drives high-cost use of the system, and what might be done to prevent patients from becoming high-cost users in the first place.

While research identifying a small segment of the population as intensive users of the health care system is over 30 years old, the recent wave of interest has been driven in large part by the popularizing of the idea of “hot spotting”: the theory that health care costs can be reduced by strategically improving the coordination and delivery of care for high-cost users. This wave of interest has driven a range of initiatives across Canada, from intensive focus on frequent emergency department users in the Eastwood region in Edmonton, to the creation of Health Links across Ontario.

The trouble is that while initiatives like Health Links incorporate evidence-based approaches to reducing emergency visits and hospital admissions, they don’t actually seem to save the system much money.

How could this be? The first reason is what’s been called the “rigid structure of health care costs.” While interventions like these may improve the quality of care (a worthy goal in its own right), improvements in quality tend to translate into increases in capacity (shorter wait times, more available beds in hospitals, etc.), not cost savings.

Second, all of these interventions target patients who are already high-cost users of the health care system. In other words, interventions like Health Links – and other versions of “wrap around care” – tend to target patients only after they have already become very sick, often with multiple chronic conditions, such as congestive heart failure, chronic obstructive pulmonary disorder, and cancer. Once a patient is older and has developed multiple chronic conditions, it may be that a substantial portion of the health care resources they consume are medically necessary, and simply can’t be significantly reduced through better coordinated care or fewer visits to the emergency department. If the central policy goal of concentrating on high-cost users is to save money, then the best approach may not be to focus so exclusively on people who are already high-cost users, but also strive to prevent people from becoming high-cost users in the first place.

So what, at a fundamental level, is driving high-cost use? In a word, poverty.

This should be no great revelation – research has shown for some time that there is an association between high-cost use and socio-economic status. Yet this knowledge has not been enough to shape the policy agenda with respect to high-cost users, perhaps in part because solving poverty seems a monolithic problem well beyond the means of a health care system to address.

But we have begun to learn a great deal more about how the different dimensions of socio-economic status contribute to high-cost use, knowledge that could form the basis for more comprehensive, more effective approaches to reducing high-cost use.

Research published today in the American Journal of Preventative Medicine (full disclosure: we are co-authors on this paper), examines the role of a multitude of social and economic factors in someone’s odds of becoming a high-cost user in the future. These factors include the neighborhood one lives in, ethnicity, home ownership and many others. What we found was the single strongest predictor – even stronger than income – of future high-cost use is someone’s access to sufficient, safe, nutritious food (what public health professionals call food security).

This research opens up the possibility that interventions which target specific dimensions of socioeconomic status – such as reinventing Canada’s broken food bank system – could be part of an inter-sectorial approach to reducing high-cost use. On a broader scale, it suggests the upfront costs of policy options such as a minimum guaranteed income, Housing First programs, and appropriate funding for Ontario’s poverty reduction strategy could be offset, at least to some degree, by savings in the health care system. This may be particularly true for children who grow up in poverty, where small investments early in life could pay out significantly later on.

Of course, public health and community health have long focused on these broader issues. But these efforts are largely disconnected from the work being done within the health care system, and continue to suffer from inadequate funding. Initiatives like Health Links have highlighted the benefit of improving integration within the health care system. But this research indicates that we must go farther, and integrate across the spectrum of population health.

Recognizing the role socio-economic factors play in driving high-cost use also reminds us that while the “problem” of high-cost users is typically cast in terms of cost savings and sustainability of the health care system, it is fundamentally a problem of health disparities and social inequity. Reducing high-cost use is the right thing to do, not just economically, but ethically.

There has been much excellent work to date across Canada to improve the coordination and quality of care for high-cost users of the health care system. This work should continue, but the role of socio-economic status in driving high-cost use needs to become a bigger part of the conversation, and we need to consider a wider range of interventions and policies if we truly want to reduce costs and improve equity in our health care system.

The comments section is closed.

  • Dr. Wayne Rooney says:

    I find it interesting that the expansion of the administrative and executive branches of medicine never comes up in these cost discussions. It’s always the patient or the doctor, never the executive.

  • Gerry Goldlist says:

    Because of improvements in health care, it is now possible to treat or prevent previously untreatable and poorly treated diseases. This may make our lives more comfortable and longer but it does not save money for the healthcare system or society in general. For the last 30 years we have been pushing off the inevitable high cost of dying and treating more chronic diseases.

    Preventing fatal diseases increases healthcare costs: cause elimination life table approach.:

    CONCLUSION: The aim of prevention is to spare people from avoidable misery and death not to save money on the healthcare system. In countries with low mortality, elimination of fatal diseases by successful prevention increases healthcare spending because of the medical expenses during added life years.

  • pat arrmstrong says:

    While I certainly agree that poverty is a critical cost driver, so are the costs of medical equipment, supplies, technologies and devices, cost we allow to rise with few if any controls.

  • Dr. D. Wayne Taylor says:

    Following up on Adam Smith’s claim that this article ignores the evidence, it also ignores the fact (that even CIHI identified) that the number one driver of health costs is the astronomical rise in health labour costs over the past two decades or so, physician fees included. We have one of the highest paid healthcare workforces in the world and rank amongst the lowest of OECD nations when it comes to quality, access, wait times and outcomes.

  • Adam Smith says:

    This article ignores the evidence. It is another example of public health practitioners seeking to expand their scope into social and political issues.

    The author has paid no attention to the distribution of cost across age/gender/demographics. On average, the greatest costs occur in the last several years of a person’s life, regardless of any other “social determinant”, as people age, get sicker and more interventions occur. Getting people out of poverty, putting roofs over their heads, providing better nutrition, exercising more, being happy …. none of that will stop you from dying.

    Since we cannot stop people from dying, the issue is how do we manage the last few years of a person’s life?

  • Gerry Goldlist says:

    I have done no studies but have given what is driving health care costs some thought. I believe that the main driver of health care costs is that human beings develop illness and suffer injuries.

  • worldwidewendy says:

    There’s also a cultural and educational aspect to this debate. Creating a positive acceptance of ‘good’ food as well as providing education to help economically challenged families know how to access and prepare great meals are critical variables.

    • Karen says:

      WWW – You raise a valid point – acceptance, education, access and ability are critical variables in a complex solution to a multiheaded problem. Thanks for your contribution to the conversation.


Laura Rosella


Laura Rosella is an assistant professor at the Dalla Lana School of Public Health at the University of Toronto.

Andrew Pinto


Andrew Pinto is a family physician and Public Health and Preventive Medicine specialist and is a member of Health Providers Against Poverty (HPAP).

Jeremy Petch


Jeremy is an Assistant Professor at the University of Toronto’s Institute of Health Policy, Management and Evaluation, and has a PhD in Philosophy (Health Policy Ethics) from York University. He is the former managing editor of Healthy Debate and co-founded Faces of Healthcare

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