HOW MANITOBA SPENDS ITS HEALTH CARE DOLLARSManitoba spends $1.8 billion a year on health care, approximately one-third of its total budget. We know how much is spent on each sector in the health care system, such as hospitals, personal care homes and physicians. We even know how services within some sectors are distributed across the province. But until now, we have not been able to put the pieces together to give a comprehensive picture of the system and how dollars are spent on average for people who live in different regions of the province.
Researchers at the Manitoba Centre for Health Policy (MCHP) have been working with health services data for more than 20 years to advance the understanding of the relationship between the health of a population and its use of health care services. Our latest project expands the capabilities of the Centre's Population-Based Health Information System (POPULIS) by using spending data.
This report represents the first attempt by MCHP to estimate health care expenditures across an entire population. The project goes a long way-perhaps farther than any other jurisdiction in North America-towards providing an accounting of how one government spends money to provide health care to residents according to the region where they live, not where they receive care.
Why is this important? The findings should provide useful information as Manitoba moves to a regional system for health care. One interesting finding, for example, is that residents living within some Regional Health Authorities (RHAs) receive a considerable amount of care outside their own region.
Because health care resources are being reallocated and reinvested in different sectors, the capacity developed through this project should help in the future to answer questions about substitution or complementary use of resources: If we invest more in home care, for example, does spending on acute hospital care or personal care homes go down?
Overall, the results should provide a basis for examining spending patterns in relation to the health of Manitobans, whether they live in the far north, the central core of Winnipeg or the rural south.
How We Approached the TaskThe project converted 1993/94 spending on health care into dollars per capita. It showed where health care expenditures went in services to individuals who live in the newly-formed RHAs and in nine areas of Winnipeg, reflecting the city's socio-economic diversity.
As with other MCHP population-based studies, health expenditures were attributed to an individual's area of residence, not the region where care was provided. This meant the results reflect the costs of providing services to the residents of a region, even if they had to travel outside the area to see a specialist in Winnipeg, for example.
We were able to account for 79% of Manitoba Health expenditures. Sectors included were: hospitals, physicians, other professionals, personal care homes, long-term care hospitals, mental health hospitals and home care.
Sectors excluded because of lack of data or incomplete data were: Pharmacare, public health, community health centres, Manitoba Cancer Treatment and Research Foundation, northern and rural transportation, capital costs and Red Cross. There were several areas, such as hospital outpatient and home care, where the limitations of the data available made analysis very difficult.
In each of the health care sectors, different methods were used to allocate costs. In some sectors, researchers had to devise new methods for allocating costs to populations. The full report provides details.
Results were directly adjusted for age and gender to permit comparisons across areas or regions with different population mixes (the main report presents both adjusted and unadjusted spending rates). Premature mortality (death) rates, widely recognized as an important indicator of the general health of a population, were chosen as an indicator of relative need for health services. The data are presented by region in increasing order of relative need as described by this measure.
What Can We Learn from the Data?We found considerable differences in total expenditures on health care across the regions of the province. For all health services included in this project, the range was from $1,014 per capita spent on residents of South Eastman to $2,035 on residents of Winnipeg's Inner Core (fig. 1).
Spending appears to be higher in areas where one would expect it to be-where residents are in poorer health. Using premature death rates as an indicator of the health of a population in a region, areas which had the highest rates were found to have the highest expenditures on their residents. However, this does not necessarily mean that the individuals within each area who most need the services are the ones actually receiving them, nor does it mean they are receiving the most appropriate services. At this time, we have no way of knowing.
We compared health care spending per capita for residents of Winnipeg and for non-Winnipeg residents. Per capita expenditures for Winnipeg were $1,255; for non-Winnipeg residents they were $1,182. That is a difference of only 6%.
An analysis of spending by sector shows where the differences are most pronounced (fig. 2). The largest disparity in spending is for physicians and other professionals. The province spent $305 per capita on physicians and other professionals for delivery of care to Winnipeg residents in comparison to $230 for non-Winnipeg residents. That is a difference of 33%.
Spending on personal care homes and chronic care is also higher in Winnipeg than outside Winnipeg. But per capita spending on mental health facilities is higher for rural residents. Generally, this is because Winnipeg residents receive their inpatient mental health services primarily in acute care hospitals rather than mental health facilities.
Another reason appears to be that, over the years, people have moved to areas that have mental health facilities either to be near the facilities or to live in them: two of the RHAs that have mental health facilities have substantial mental health care costs for their residents. This may be an argument for treating the mental health sector separately from other expenditures, but consideration must be given to the fact that the acute care hospital sector provides the primary source of mental health treatment in Winnipeg.
The data also reveal that reliance on hos-pital care varies significantly from one area of the province to another. A person living in the northern regions, for example, is far more likely to have higher expenditures on hospitals than on physicians.
As noted earlier, another finding is that individuals often do not receive care in their area of residence, and many travel a considerable distance to receive care. Some areas such as Interlake, South and North Eastman pro-vided less than half of the inpatient hospital care received by their residents. The allocation of funding for the new RHAs will need to address the issue of regional cross-border services.
Does the Methodology Work?The purpose of this project was to improve our understanding of overall expenditures in the health care system. One of the key issues to be addressed is the feasibility of the methodology. Does it work? Are there biases? If there are, are they large enough to render the results misleading or the methods useless? What about missing data?
Considerable work went into attempting to get inside what have previously been black boxes of expenditure data-by, for example, devising methods to deal with outpatient hospital expenditures, physician salaries for which there were no claims filed, and costs of personal care homes. The report acknowledges that different approaches to allocating expenditures produce different results. For example, using provincial averages for inpatient hospital care produces different results than using individual hospital costs. But the general patterns remain the same. That is, those areas that had lower per capita expenditures continued to be lower, no matter which of the alternative methods was used. Those areas with high premature mortality rates had higher expenditures on health care, adjusted for age and gender, regardless of the method used.
The report emphasizes that missing data make it less than complete. There are no computerized data for care provided in the community (home care, day care, public health and community health centres), and there are many areas (outpatient hospital care, outpatient mental health services and physician payments where no evaluation claims are filed) where the data are incomplete. These gaps mean that some areas of care had to be left out of the calculations, and analysis in other areas was limited.
But would the additional data substantively change the results of this project? Does lack of certain data undermine the findings? We think not. But additional data will allow researchers to better understand the importance of these sectors in the total health care system and ultimately on the health status of the population.
ConclusionIn the recent book Why Are Some People Healthy and Others Not? (Evans, Barer & Marmor, Eds. 1994), a consistent theme is the need for better information to address the question posed by the title. In one of the concluding chapters, Michael Wolfson says: "Without proper information health policy is blind and stumbling; quite literally we do not know what we are doing."
This project sheds a little more light to help guide health policy. It advances understanding of how Manitoba spends its health care dollars and lays the groundwork for further advances in the future. There is still much more to be learned.
Summary written by Cheryl Hamilton and Marian Shanahan, based on the report:A Project to Investigate Provincial Expenditures on Health Care to Manitobans, A POPULIS Project: by Marian Shanahan, Carmen Steinbach, Charles Burchill, David Friesen and Charlyn Black.
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