Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology

Issue 7 - Evidence

The Standing Senate Committee on Social Affairs, Science and Technology met this day at 11:05 a.m. to examine the state of the health care system in Canada.

Senator Michael Kirby (Chairman) in the Chair.

[English]

The Chairman: Senators, today we will continue our study of the federal role in health care and how that should evolve in the coming years. Some of you will recall that at our committee meeting about three weeks ago, on demographics and aging, a number of outside experts appeared before us, but Health Canada was not part of the group. However, Health Canada has a number of observations and some data that would be useful to the committee. We have with us this morning, Ms Abby Hoffman, Director General of the Health Care Directorate; Mr. Cliff Halliwell, Director General of the Applied Research and Analysis Directorate; and Ms Nancy Garrard, Director of the Division of Aging and Seniors. Thank you for attending.

Ms Abby Hoffman, Director General, Health Care Directorate, Health Policy and Communications Branch, Health Canada: I should say that there are two additional individuals from Health Canada with us today: Ms Sue Morrison of the Health Care Directorate, and Ms Joan Lindsay from the Population and Public Health Branch.

We have distributed some material, and I apologize that it was late arriving. Just as you were preoccupied earlier this morning, we too have been preoccupied recently, and not to prejudge what you discussed, with the same topic.

It certainly is not our intent to take you through, page by page and in great detail, all of this material in the time that we have this morning.

Our department has been looking for the past year or so at the issue of population aging, its impact on the health system, and its implications for health.

Our intention today is to present some of the conclusions from that work. We know that you have covered a fair amount of this ground with other witnesses. Our people have been in attendance, and we have also seen the transcripts and materials from those other witnesses.

Some of the material that we provide may look familiar to you, as other witnesses have addressed these issues. We thought, nonetheless, that the Health Canada view might be of assistance.

From what we know of earlier witnesses, and also from what you will hear from us today, a great deal of focus and emphasis has been placed on the pressures associated with an aging population. I would like to make one commentary quite clear from the outset. While we too have been interested in understanding the nature and scope of those pressures on the health system, we are equally, or perhaps more, interested in understanding the likely health needs of an aging society, anticipating what system adaptations are likely to be required, and what will need to be done to meet those health needs.

It does not mean that we think that aging-related cost pressures on the health system are trivial - quite the contrary. It does not mean that we think that we should ignore steps that can be taken to ensure that the system is as efficient and economical as possible, or that we should ignore how that system provides services to everyone, but particularly those who consume large amounts of services, the older age cohorts.

We are concerned with healthy aging, and doing what is possible to help Canadians live their entire lives in as good a state of health as possible.

We have a clear, twofold priority that has been driving our work and will continue to drive it. First, let us understand the pressures on services and funding. Second, let us figure out how best to support healthy aging. It would be wrong for us say that we place one of those priorities over the other. We focus on both.

The material is broadly organized around three subjects. The first is the health system and cost impacts of population aging. I am not aware to what extent your other witnesses have addressed this topic, but we have tried to look at these cost impacts relative to other cost drivers. One problem is that the impact of aging is often looked at independently. It is quite easy to construct a view that this is definitely the most significant pressure. We do not believe that that is the case. We believe it is important to look at that issue in context.

Second, in the latter part of the presentation material, we talk about system changes and adaptations that may be needed to address health needs related to population aging. We say a little about what the government is currently doing about those needs. We are not pretending at this stage that we have all those issues adequately covered. Our presentation represents part of our work agenda.

Third, although this is embedded in the material, we do include some comments on how much mitigation of the cost pressures can be achieved by health promotion and health prevention measures. We say that the forecasting issues are complex, the variables numerous, and the scope of some dimensions unknown. Therefore, we do not think that the right way to think about the contribution of health promotion and health prevention measures is simply to make some calculation about how much money might be saved relative to a situation where those measures were not undertaken. We think that the value of the measures is in improving human health, improving the health of Canadians. We do not think that the value is in figuring out, through some kind of arithmetical calculation, how much of the cost pressure could be reduced if those measures were adopted.

Senator Morin: That position is not written down. You stated it, but it is not written down. That is an important statement, but you did not write it down in your document.

Ms Hoffman: Mr. Chairman, we have provided the graphs and charts that we have used. We would respond to requests for some further material to be provided beyond what appears in the transcripts.

The Chairman: My guess is that we will come to that.

Ms Hoffman: We can adjust otherwise if you prefer, but I would suggest that we identify those items in the presentation package, bearing in mind time constraints. We could then open things for discussion.

The Chairman: That will bring out all the main points. You could hit the highlights and then we will proceed to questions.

Ms Hoffman: The first several slides address population age structure, which you have seen before. We are looking here at the impacts of longevity, and particularly at fertility and the baby boom cohort moving through the population age structure as it evolves. This may be presented in a different form, but is material with which you are familiar.

The next page has a chart showing our estimates of health expenditures distributed by age. Again, this is a point that has been made to you, but we have displayed it here graphically. We show two things. Clearly, expenditures are age related. However, one of the most critical issues is the relationship between health expenditure and death rate. Therefore, the issue here is expenditures made in proximity to death, rather than simply higher expenditures as a function of age itself.

The Chairman: I want to be sure I have understood, because this graph where you bring the death rate and the expenditures together helps. Are you saying that a healthy 80-year-old does not cost the health care system any more than a healthy 60-year-old does?

The aging phenomenon arises because the probability of dying increases. It is that last year of life that puts the pressure on the system, and there is a greater percentage of people dying at the age of 80 years than at age 60 years. We are inclined, in a shorthand way, to say that the costs are due to aging, but they are not. It is the proximity to death that is the issue. Is that right?

Ms Hoffman: That is a fair statement of the extremes of health care costs associated with different age groups. We all know anecdotally, and from data, that certain chronic conditions are more prevalent as one ages, and therefore various kinds of health care and health-related costs ensue. However, the extremes of relative expenditure on the old and the young are more attributable to the proximity of death than they are to the simple fact of being older.

The following page is on the topic of age distribution in the provinces. We have shown here the proportion of the population 65 years of age or older for each province at three points in time. You may find it interesting to note that the differences today in the age profiles of various provinces are not that extreme. In fact they will not be extremely different in 2010, but they will be significantly different in 2020 and beyond.

The Chairman: It is fair to interpret that graph on the basis of prosperity? The two most prosperous provinces, namely Alberta and Ontario, will retain a larger share of younger people. The least prosperous provinces are more inclined to have an aging population as the young people move out. Is that fundamentally what that chart is telling us?

Senators, I remind you that you must switch your mike on to be recognized, otherwise the media will not pick you up.

Senator Morin: I was just confirming the fact that not only do they not lose them, they attract them.

The Chairman: It is both.

Senator Graham: Mr. Chairman, there is a program called "Come home to Cape Breton to retire." Whether or not I am spared long enough to be able to do that, Atlantic Canada is a very attractive place to which to retire. Perhaps that has something to do with it.

Mr. Cliff Halliwell, Director General, Applied Research and Analysis Directorate, Information, Analysis and Connectivity Branch, Health Canada: The differences in the age structure reflect two phenomena. One is migration, not just interprovincial but also international, which is not spread out evenly amongst all of the provinces. The richest provinces are also the major beneficiaries of international migration, where immigrants tends to be younger than the population as a whole. The phenomenon that affects Atlantic Canada in particular is that older people have a tendency to return.

None of this is particularly new, but what has kept Atlantic Canada from becoming much older than the rest of the country is that it took longer to see the declining birth rate that was evident in other parts of the country. We see two forces at work. Out-migration is one, but there has also been a higher birth rate to help feed that out-migration.

Ms Hoffman: These are slides on health care cost drivers, the consequences of which are summarized on the graph shown on the second slide. We must look at and understand a variety of factors that drive changes in health care spending, such as population aging, technology and innovation, population health states, and preferences and values around the need for, demand for, and access to health services. We must look at changes in the structures of the health care delivery system. Some adapt better and more efficiently or more economically than others. Then, of course, there is the issue of the relative cost of health care services compared to other general price factors that contribute to general price inflation.

Fiscal capacity may be a spending driver rather than a cost driver. Governments are under great pressure to spend in periods of recession or constraint or large deficits and debt, and fiscal capacity may be correspondingly reduced. When government revenues are higher and people think that we are in a time of prosperity, or when deficits are being reduced, there will be pressure to spend more on health because fiscal capacity is greater. Our point is that all these other factors are significant, but so too are the realities of a government's fiscal capacity at any given time.

The next slide is entitled "Health Care `Cost Drivers'," which puts into context our estimate of the contribution of aging to growth in real expenditures on health per capita. The red portion of the graph bars represents the growth attributable to all those other factors I mentioned, and the blue portion is the costs associated with aging.

We can reasonably project the size of the population and its age structure from 2001 through to 2030, which is shown in the bar on the right-hand side of the graph. There is not very much we can do about that population size and age structure in 2030, even taking advantage of increased longevity or migration. That is a known. However, this is based on the health system more or less as we know it today.

These are total health expenditures. There is no attempt to attribute them to either the private or public sector, but a similar basket of services is available today, whether financed publicly or privately.

We see that the significance of aging as a driver of growth is growing. If we were to move this projection out even further into 2040 or 2050, a peak contribution of aging would cause pressure on the system.

The Chairman: To clarify your point, these are not public sector data. These data relate to spending on health care in the broadest terms. It includes nursing homes, drugs, and lots of things that the public sector does not necessarily pay for.

Ms Hoffman: That is correct.

Let me move on to the next series of slides. Four slides deal with stroke morbidity and stroke mortality for males and females. We have included these slides to give some indication of what I was referring to at the outset about the difficulties of forecasting both demand for services related to health states and the possible associated costs.

Each of these slides attempts to give some indication of what epidemiologists believe will be the evolving number of males and females who will suffer strokes and associated morbidity, and the number of people who will suffer strokes and die in 2010.

We have included at the bottom of each of these slides the evolving rate pattern. We see a declining rate for reasons of improvements in care and treatment and improvements in preventive factors. However, the numbers of cases will increase due to population size and changes in the age structure of the population.

This is one condition - stroke. Material is available on other health conditions that display similar kinds of information. Try to imagine, if you will, the multitude of chronic, age-related health conditions and diseases of which we are aware, and attempt to look at all of those data together and make some estimation of the health system demands and related costs. It is extremely difficult to take all of those factors into account.

What does it mean when the mortality rate associated with stroke falls, which is effectively what the two stroke mortality graphs show? It simply means that people will not be dying as quickly from strokes as previously. They will survive with various levels of health needs.

The Chairman: Those graphs show that one is now less likely to die of a stroke than one was years ago. On the other hand, when one has a stroke - this sounds terrible - and does not die, the costs to the health system are enormous because a lot of other assistance is required.

Senator Morin: Fewer people are suffering from strokes. It is not just that people are not dying, there is also a reduced incidence of strokes.

Ms Hoffman: Not only reduced mortality.

Senator Morin: That is not what our chairman has been saying. It is not only that those who have a stroke survive; there are fewer people having strokes.

Ms Hoffman: Fewer people per capita are having strokes, but the age structure of the population means that there could be more.

The Chairman: The absolute number will be larger because the population is bigger, but there will be fewer per capita.

Ms Hoffman: To further complicate things, this is not just an issue between, say, stroke mortality and stroke morbidity; in other words, dying of a stroke and surviving a stroke and requiring care. If one survives a stroke, a heart attack, or some other potentially, although no longer necessarily, fatal disease, that does leave one vulnerable to other diseases. We are talking about people surviving strokes here. They may then, regrettably, be living with diabetes or chronic cardiovascular disease of some form or another, perhaps vulnerable to cancer or other conditions.

I am making the point here that while there are a lot of data available, sorting out precisely what they all amount to is extremely difficult. That is what that series of slides is about.

The following two are international comparisons. Again, you can look at these independently of our discussion here today. If you look at the table rather than the graph, the second of these two, you will see that while Canada is reasonably competitive in terms of the proportion of GDP spent on health compared to other industrialized countries, we are a rather younger population in relative terms.

Also worth noting here is the share of a country's population over the age of 65. One needs to be careful about using 65 as a benchmark, but we have done so for these purposes. There is no necessary connection between the percentage of the population that is over 65 and the percentage of GDP that a country spends. In general, any country, regardless of its starting point, will feel the impact of age-related spending pressure as its population ages. You can see there are some countries with very high proportions.

Senator LeBreton: Like Finland.

Ms Hoffman: Yes. Finland and Japan have very high proportions of their populations over 65, and have managed to contain not only current but also past growth in spending.

The Chairman: This is total health expenditures, not merely public sector?

Ms Hoffman: That is right.

The Chairman: Tell me if I am right or wrong, but I draw the following conclusion from that chart: The Canadian and American systems are clearly the most expensive in the world, in the sense that the Canadian system is only fractionally surpassed, for instance, by France, which has a much higher percentage of older people.

In other words, in spite of the fact that we have a younger population, we are second only to the United States in percentage of GDP spent on overall health. Is that a reasonable conclusion?

Ms Hoffman: Yes.

Senator Morin: Could you explain this chart to me? I do not understand. Perhaps I am slow. I do not understand the ordinals.

Let us take any country as an example and you can lead us through the 5, 7, 9 and 11 per cent displayed there.

Mr. Halliwell: The chart is harder to read than the table on the subsequent page. We show for each country the level of health expenditures as a share of GDP in five years. That is on the left-hand side axis. When it goes up, it goes up as a share of GDP. Then there is the percentage of the population over 65. For each particular line, for example Japan, you are looking at the numbers for 1960, 1970, 1980, 1990, and 1997. You are seeing how those shares evolved over time. It is easier to see that in the table, where we do have the labels on the years.

The Chairman: I am assuming that the bottom number on the data for France for 1997 is wrong.

Mr. Halliwell: I think it is, yes.

The Chairman: It cannot be 11.5. Just for the sake of complete information, you might give us the right number at some point.

Senator Morin: It surprises me that Japan is pretty similar to the United Kingdom and Italy. I thought it had a much higher percentage of old people. It is similar to Europe, if I am right.

Ms Hoffman: It is on a much steeper trajectory. If we project out for Japan, you will see the rate of aging proceeding considerably faster, although Italy is not very far behind.

Senator Morin: This shows that the U.S. and Canada spend more on health care than the European countries and Japan. The fact that our population is younger means we are even spending more. If our population were older, or the same as the other countries, we would be at 15 or 16 per cent. This is the first time I realized that. That is a very important concept.

Ms Hoffman: Perhaps we can come back to this, but we will move on in the interests of time.

The next slides have principally to do with one of the issues we were asked to address. What is the federal government and Health Canada doing with respect to aging-related issues such as cost pressures and the broad area of healthy aging?

The next slide deals with gains in later-life health. I know you have had some discussion about this. We believe that health promotion and preventive activity are valuable at any age. Of course one can always talk about trade-offs, about where emphasis ought to be placed among different age groups, but we believe that it is never too late to make improvements in health.

We turn to the next slide, which is a graph on mortality. You may have heard something about this earlier. Unfortunately, the kinds of statistics we might like to have, simply showing morbidity rather than mortality, are not readily available, but nonetheless I think the data would still stand.

This slide shows motor vehicle accidents in blue, suicides and homicides in red and grey, and mortality associated with falls in magenta at the top.

We have provided this information because, while presumably all of these causes of mortality are preventable, falls are among the most preventable. This shows huge mortality associated with falls in the over-75 age group, where we believe that an array of strategies and preventive measures can be used to quite significantly reduce the number of such deaths. We simply cite that as one example.

We would make the same argument about the other principal risk factors associated with a whole array of the most significant aging-related, chronic diseases - smoking, physical inactivity, and poor nutrition. While we might not be able to give you quite as dramatic a display as the one on falls, we would make the same argument.

I can elaborate on that point in questions as you wish, but I think the status stands on its own.

We move to the next slide, on dementia. The incidence of dementia related to age is very clear here, and therefore the impact of demographic change.

Unfortunately, this is one disease about whose causes we do not know nearly as much as we would like. Therefore preventive action is somewhat limited at this stage. The early stages of the disease can certainly be attenuated through drug therapy.

We know that approximately 50 per cent of individuals who suffer from dementia are living in the community. The other 50 per cent are living in institutional settings. There are implications for the health system on both sides. Drug therapy may extend the mild stage of dementia, but that clearly imposes burdens and demands on families, on the community, on informal, non-remunerated caregivers. Our success in the application of drug therapy has an implication for what we do on home and community care, and respite for family caregivers.

At the same time, while we might have some compression of the relative numbers who need to be institutionalized as a result of dementia, we need to remember that moving people out of institutions or delaying the time at which they might need institutional care does not result in complete savings for society or for the health system in both human and dollar terms. As I said, the implications then simply move into family and community settings.

The Chairman: Who pays for drug therapy for a person who is not on a guaranteed income supplement or welfare, who is in the early stages of dementia, and is at home as opposed to in an institution?

Ms Hoffman: Seniors generally are eligible for provincial drug plan support, but as you no doubt are aware, those plans are highly variable across the country and are sometimes subject to significant deductibles and copayments, regardless of age. I do not think there is any doubt that there is an access issue.

The Chairman: Do you have any data on the access question? The thought going through my mind is do we have any data on the number of people over 65 who need drugs but do not get them because they cannot afford them and no other program provides them?

Senator Morin: There was a Quebec study on this.

Ms Nancy Garrard, Director, Division of Aging and Seniors, Health Canada: The best study about financial inaccessibility, out of McGill and by Dr. Robyn Tamblyn, followed a change in the pharmacare program in Quebec. They tracked their seniors and found that it actually cost the health care system more because of the increased visits to emergency rooms. When they looked across the entire health system, the savings in the pharmacare budget were more than offset elsewhere in the health care system. It is quite a good study and I would recommend it for your information.

The Chairman: Could you make sure that our researcher receives the details of that study?

Ms Garrard: Yes, we will provide the details.

Ms Hoffman: The last set of slides deals with measures that are currently on health department work agendas, ours and others, across the country. We started with the First Ministers' Agreement on Health Care because our general approach is that the impacts of population aging and the kinds of system adaptations required have some unique features. Much of what we need to do to address pressures related to aging has to do with the same measures that we need to pursue in order to reform and renew our system more generally.

The information on the first page references what the first ministers' agreement of last September was all about. In a nutshell, there will be a significant increase in transfers for health in the CHST over the coming years, along with a number of targeted funds, and beyond that, first ministers agreed that their governments would work together on a number of priorities, ranging from health human resources to health information technology and so on.

I will point out that there seems to be a technological glitch with the second slide. This is supposed to be showing the relative health expenditures in a series of age cohorts, and sadly for me, the 45-to-64-year-old data seem to be blank.

The Chairman: I wish to ask you a question about that graph. This may be speculative and you may not know the answer. When I look at that, the thought that immediately goes through my mind is that the hospital is the one institution that is paid for. Let us suppose for the moment that all forms of health care delivery were in fact covered by a national program. To what extent could that move people out of hospitals into less expensive settings?

To put it another way, to what extent do people go into the most expensive setting, which is the hospital, because it is the only thing that they can afford to do? Anything else they must pay for themselves, and they may not have the money.

Ms Hoffman: The point you are making is certainly valid. Clinicians will decide on care based in part on what they believe will be the access issues arising from recommending that someone move out of a setting where their costs are covered to one where they are not. As I was saying earlier about prescription drugs, there are varying models across the country of how long-term care is financed and what the payment responsibilities are, through either private insurance or out-of-pocket costs for individuals.

Senator Morin: I would point out that this is not a recent chart. Now the drugs have surpassed the physicians as a cost, so that dates back a few years.

The Chairman: I think Senator Morin is referring to a different number. This is dollars per capita. We did it as a percentage of total health expenditures.

Senator Morin: Even in absolute numbers, drugs are higher. I am not necessarily saying prescription drugs, but total drugs.

The other point is that the hospital costs have dropped over the years. Year after year, the dollars per capita for hospitals are dropping. We are actually seeing what you are talking about. Our spending for hospitals is dropping and our spending for drugs is increasing.

The Chairman: I have anecdotal evidence in my own family about people occupying acute care hospital beds simply because cheaper forms of care were not available. Instead of allocating health care dollars through doctors, perhaps a province could develop a global budget so that money could be moved from one facility to another in order to provide the cheaper level of service. For example, a person could be moved out of a $1,000-a-day hospital bed into a $350-a-day nursing home bed. Is there any empirical research on that question?

Ms Hoffman: We have seen regional health boards with global budgets. It is not only the quality of care - the right care in the right place - but it is believed that there are efficiencies in those kinds of systems.

Unfortunately, in Canada we do not have as much experience with that as we would like. Even where there are so-called "global budgets," generally speaking the physician budgets are not within the governance reach of those regional health boards.

Mr. Halliwell: I would like to interject a note of caution about that kind of cost comparison. If you compare the average cost per patient day in a hospital with the average cost per patient day in a long-term care facility, you will get a misleading impression, because some of those hospital patients are very expensive. In a sense, you need to know the cost of caring for a patient who is not in need of particularly intensive care, and of the so-called "hotelling" services of the hospital. You have to compare that to the institutional setting. The average cost per person in a hospital will always be very high, but that will not tell you whether the person you move out of the hospital to another care setting will generate savings anywhere near those magnitudes.

Senator Morin: Pharmacare is uneven throughout the country. Some provinces have nothing, and some are fairly generous. It might be a good idea to see what is being done throughout the provinces. You are describing a situation that may apply in some provinces and not in others. Perhaps that information could be made available to the committee.

The Chairman: Ms Hoffman referred to the "better regional global budgets." Can we have an example of that? My instinct is to think of the one in Calgary, but that is the only one I know of - the Calgary Regional Health Authority. Are there shining examples of a good regional global plan?

Ms Hoffman: Perhaps the reason that we seem to haul out the Calgary example in these situations is that it really is considerably better than the others. I would pick Calgary too. Others talk about the Victoria region. The Capital Health Authority, which covers Edmonton and the surrounding areas, is another one.

Despite the phenomenon of regionalization, most of the regional health boards simply do not have any direct control over the full array of not only financial resources, but of institutions and providers, and since we are talking about aging, the link to social services as well. In many cases, the mitigation of cost and frankly inappropriate service in the health care system lies with a better deployment of social services and social service providers.

The Chairman: The regional authorities do not have control over physician costs because there is a provincially negotiated fee schedule.

Ms Hoffman: Unless you are dealing with physicians who are on salary. Even in that situation, it is likely that the regional health authority still does not have control over those physician salary dollars.

The next set of slides, "Health System Renewal," is simply a way for us to say something about how the issue of population aging plays out in these various areas. I will draw your attention to it because it picks up on a point that was made a moment ago. If you turn to the next chart, on hospitalizations, you will see that the average days of stay, regardless of the cause, has declined for all age groups over the last decade. However, there are many reasons for this, including the clinical practice and the severity of the illnesses in question. Also, a great deal of this has to do with hospital practice, where there is pressure to move people through the acute care institutions, and new technology.

Senator Morin: Surgery is a good example.

Ms Hoffman: With the same health state, one can pass through a hospital more quickly because of technology, clinical practice, and so on. A certain amount is also attributable to pressure on hospital managers and the medical staff to move people through more quickly. However, I should also say that the majority of studies do not attribute the declining number of days of the average stay simply to hospital administrators pushing people out the door more quickly and leaving them in poorer health at the end.

I will talk about primary health care because there is not much detail in the material that you have. When we talk about primary health care, we are also talking about the point of access to the system; not just ultimately chronic care needs, but also the place in the system where much of the preventive and health promotion service would also be delivered. We are talking about early diagnosis of chronic disease so that disease management strategies, if needed, can kick in early, before a significant level of acuity arises. We are talking about primary care if it is well managed, and has the kinds of links to social services that I mentioned. Out of the agreement last fall, the whole primary care area is one that is of significance to us.

It might be in the interests of time to note that all of these other areas - acute care, long-term care, pharmaceutical, palliative care, health human resources - have an aging component. We are trying to pay attention to that. We can talk about this further, but I am conscious of the time.

These are the conclusions we would offer, whether we were here for one hour or longer. Yes, population aging will be a major cost driver for the next 20 to 25 years. However, we do not believe that it will be the most significant pressure point, but that it will play into those other issues - technology, public expectations, et cetera. When the peak of the baby boom cohort reaches 75-plus - in the years 2025 to 2040 - population-aging pressure will be a more significant driver of health spending. Bear in mind that we are 24 years away from that point and much can be done in the meantime.

Health spending is not strictly a matter of meeting demands based on objective health status and need. Other factors, including public expectation, also influence demand. In our judgment, it will not be just the health status of the baby boom generation as it passes through its later years that affects demand, but also the values and expectations of that group. Those expectations will pose as great a threat to the viability and sustainability of the system as their objectively defined health needs will impose on it.

The fourth point is that improved health can offset increases in costs associated with population aging, but certainly not entirely. We believe the reason for working on improving health has to do with managing costs. It pertains to the fundamental mandate of the business that we are in, which is improving population health at all ages.

Therefore, system adaptations are required if we are to manage aging-related pressures at reasonable costs, and those take time. We are working on them now and will continue to work on them.

As I said a moment ago, policies to promote healthy aging can improve health outcomes and quality of life, as well as contribute to the management of health system pressures. For those reasons, healthy aging should be a priority focus for us and for our actions on health care.

Senator LeBreton: We could make the argument that what you are doing is developing a starting point. You would have been interested in the testimony of Dr. David MacLean yesterday, when he talked about the cost of the health care system and how we were going to deal with this as the population ages. He said that the problem was the political economy of these drug and technology issues. He outlined a situation where the pharmaceuticals, people in technology, and the doctors work in their own specific area, but no one supports prevention, and no one pays for it. I should like to have your comments on that. You obviously would support that view.

Second, we have looked at the percentage of the aging population and the percentage of GDP, and we have noted the numbers in Italy, France, and Japan. Would those numbers not support your arguments about healthy aging and health prevention? We have all heard that they do not have the same levels of heart disease in Japan. We hear the same about Italy, even though they seem to eat rich foods. They consume a lot of olive oil, and other things that we are now learning can be useful in the prevention of heart disease. Perhaps not necessarily as a result of planning on their part, but accidentally, through diet and lifestyle, they have an aging population that does not cost as much to sustain in the health care system?

Ms Hoffman: We see their lower costs but older populations as a combination of lifestyle factors and the way in which services are organized. A number of these countries have close collaboration between health and social services. They have more success in maintaining people with chronic diseases in community settings, where services are provided outside of either acute care hospitals or long-term care institutions. It is both of those. It is the preventative health promotion work on a population-wide basis, plus the organization of services.

Trying to increase attention to prevention when no one pays for it is a concern. We will be dealing with this issue, as will all governments across Canada, in the course of reforming primary care. We expect that people will receive the traditional and first line of medical care and treatment in primary care environments, but they will also receive counselling and advice on a one-to-one basis, or a population-wide basis, about various aspects of health promotion and preventative activity.

Much of this does not appear in any fee-for-service arrangement between the physician in the community and provincial governments. That is one reason why reforming primary care is also about reviewing and re-jigging the funding arrangements. Those kinds of services could be made available to people without getting into out-of-pocket costs for things that do not appear in a fee-for-service regime, while at the same time providing access to the traditional care and treatment services that do.

It is part of what makes primary care and the pulling together of nurses and doctors and other kinds of health professionals a real challenge. That is what people who talk about reforming primary care are really talking about.

Senator LeBreton: The public might be alerted to this issue if there were a direct relationship between preventative health care and taxes paid. I do not know how it could be done through public policy, but if we were able to convince people that if they followed a certain regime for preventative health care, there would be direct dividends through the tax system.

Dr. MacLean said yesterday that if we want to address this, we are going at it the wrong way. Prevention should be at the top, not an afterthought.

Ms Garrard: To follow up on that point, there are some systems in the United States that are on a per capita basis for an entire region. They are actually paying for health benefits. It is to everybody's advantage to encourage early diagnoses, health promotion and disease prevention.

We pay for the "repair shop" kind of work. We were not offering much incentive for promotion efforts that could be undertaken. If I could just add to Ms Hoffman's point, it is not just the primary care system to which we do not offer any incentives. It is the same for all the other sectors that could promote health.

I was here yesterday, when we talked about physical education for children. It is more than just the health sector. It is that much more challenging when trying to promote it across all sectors.

Senator Graham: Thank you, witnesses. It is nice to see you all again. You mentioned that we must be careful about using 65 years of age as a benchmark. I am rather sensitive about that.

Senator LeBreton: I am getting more sensitive every year.

Senator Graham: Senator LeBreton is laughing about that. Mentioning Senator LeBreton reminds me of some of my grandchildren, to whom she is related, who cannot understand that Grampy cannot skate as fast or for as long as they can.

Senator Morin: Can you skate at all?

Senator Graham: I skate. I was racing with one of your young cousins on the canal this past winter. I was obviously losing every race, and I saw these two big lumberjacks walking down the side of the canal. I asked my grandchild, George, to meet the two gentlemen. I did not know who they were. I told them that I was racing with my grandchild, and asked them to hold him until I was halfway to the finish line, then let him go.

Senator LeBreton: I cannot imagine George agreeing to that.

Senator Graham: They actually held him. He caught me at the finish line.

Should we continue to define old age using 65 as a cut-off point?

Ms Hoffman: I do not think it is particularly useful, frankly. We use it because it is the agreed legal age for certain purposes of retirement, but it has no use other than that. Even though certain kinds of retirement benefits normally commence at the age of 65 years, it is not reflective of income or contribution to the fiscal situation through taxation.

It is not particularly useful. You will see in some of our data that we use the age of 65 as a benchmark because it does have some historical value. We can then at least look at 10-year age groups above the age of 65 years. If we want really good analyses, we should probably be looking at five-year age groups.

Senator Graham: We talked a lot yesterday about health preventative measures, health improvement programs, and health promotion programs. Do you have any definitive data on the correlation between the positive effects of health promotion programs and improvement in the general health of Canadians?

Ms Garrard: I think that we have those across all ages.

I feel that there is enough evidence to suggest that falls prevention and quality of life improvements with respect to the three major risk factors we talked about are making health improvements in later life. An early investment in a life-course approach to health promotion stands people in good stead throughout their lives.

There is interesting evidence that nursing homes that spend time on strength and balance exercises for their residents have found an improvement in their autonomy and ability to do things independently, which has reduced demands on staff time. Even in the most frail periods, one can still find improvements in quality of life.

We do not feel that a person is ever too old. Obviously, the earlier you start, the longer your health lasts, but aging is not necessarily synonymous with poor health.

Senator Graham: Should we be spending more money on health promotion programs?

Mr. Halliwell: It is relatively easy to demonstrate that healthier behaviours lead to healthier outcomes. What we lack most is information about the ability of some of our programs and activities to influence those behaviours.

Ms Garrard just cited an example of a relationship between a health promotion activity and a change in behaviour and outcomes.

Senator Callbeck raised the issue of diet and potential outcomes. We know a lot less about that area and the connection between available policy instruments and our ability to change those. It is really important to find the policy instruments that can lead to healthier behaviours. I would say we have a weak understanding of that area and a need to improve it.

Senator Graham: One of the doctors here yesterday said that he could demonstrate a direct correlation between health and health promotion programs in certain areas. Does Health Canada have any statistics to support such statements?

Ms Garrard: I believe Dr. MacLean was talking about reducing the rate of cardiovascular disease. That is one disease for which there are very clear, modifiable risk factors. If we could find ways of reducing those risk factors, such as physical activity, diet, or the cessation of smoking, then we would see a decline in cardiovascular disease.

Mr. Halliwell's point is that even though we have known for the past 40 years that smoking causes cancer, 29 per cent of Canadians still smoke. We all know there is a health impact. Our challenge is how to change society's attitudes toward this behaviour. It is a very complex issue.

We also know that there is a definite relationship between education and health practices. Some of our biggest challenges are with people of low income and poor education, where risk factors congregate.

Senators, how to effectively target potential new investment is worthy of further study.

Senator Graham: Mr. Chairman, I think that is something on which we should be focusing our attention.

Senator Callbeck: I want to come back to the slide on international comparisons. I know that Senator LeBreton asked a question about countries such as Japan and the United Kingdom, that have a larger aging population than Canada, but yet spend less of their GDP on health. Ms Hoffman mentioned it had to do with lifestyles and how services are organized, and that more is done in the community. Can I take from that comment that the seniors in those countries are healthier than in Canada?

Ms Hoffman: In general, yes. Lifestyle factors suggest that people are healthier. The organization is simply a way of managing services to respond to a health need. That does not necessarily mean that people are healthier.

I do not want to prejudge where your comment might be leading, but one could argue that if people are healthier, it is a little easier to mobilize the right mix of social and health services, because you need less care and treatment and more of a community-based support service.

We know that some countries emphasize the concept of "aging in place." The idea is to undertake the right kinds of community adaptation so that as people's health status changes over the course of their lives, particularly in the latter stages, the services can accommodate where those people are, the environments they are used to, and their family and community surroundings.

We know about comparative longevity. We know that the longest life expectancy is in Japan, followed by France.

Senator Morin: No, followed by Canada.

Ms Hoffman: There is a somewhat greater life expectancy in Japan. However, we have to be careful about saying that life expectancy necessarily means improved health states in the latter five to eight years of life, which is when disability and declining independence really kick in.

I am not sure, unless my colleagues can correct me, that we have a clear answer on this issue.

Ms Garrard: International comparisons are difficult, given the way we track health status data. There is a fair amount of evidence to suggest that the health status in Japan is better, but that of a lot of European countries is not as clear.

We are different from some European and Asian countries in terms of the rate of institutionalization, or long-term care. In Canada, about 6 per cent to 7 per cent of seniors live in long-term care. The percentage is much lower in a number of other countries. This figure is a reflection of our longevity, but it also relates to how we care for people in their older years. It is not black and white. We still feel we compare quite well internationally in terms of health status.

Ms Hoffman: A recent study suggests there are significant declines in the rate of disability across OECD countries. Our data also suggest a decline in Canada, but not nearly as large. There may be some definitional issues, or we may be behind in Canada. That I rather doubt.

I think the point just made is critical. With reasonably comparable levels of disability, loss of mobility and loss of independence, why is it that, relatively speaking, we seem to have such a large proportion of people in these oldest age cohorts, the so-called "frail elderly," living in institutions? It is not as if public financial support for this kind of institutional living arrangement has been across the board. Despite the need for reliance on private insurance and personal out-of-pocket costs in many cases, for some reason we still appear to be directing people to institutional care in larger numbers than other countries.

Senator Morin: It is cultural.

The Chairman: My guess is that there is a cultural view that does not exist in North America but which seems to exist in a lot of other places.

Senator Morin: There is very low incidence in the Maritimes. That is cultural. They tend to keep their older people at home more than in other parts of the country.

The Chairman: My gut feeling is that it is a cultural question.

Senator Morin: I would like to compliment Dr. Hoffman and her colleagues. I was on the Science Advisory Board for Health Canada, and I am very pleased by and proud of what you have said this morning.

Correct me if I am wrong about this. Health prevention and promotion are extremely important in themselves. They should be pursued for that reason alone. They should not be pursued strictly as cost savers because there is no strong or hard evidence that they are important factors in the reduction of health costs.

You made another statement that was very clear. You said that health promotion and prevention are connected to primary health care reform. Yesterday, we were trying to grapple with the question of infrastructure and so forth. I think that you said it very well. The promotion and prevention aspect is present in the reform of health care as it is being carried out in several provinces - Ontario and Quebec and so forth.

We are realizing that we should do a careful study of the health services in other countries to see what they are doing, not only with hospitals and with physicians, but also in home care and pharmacare. That is on our committee's agenda.

Ms Hoffman: On your last two points, I do not think that there is any difference between what we have expressed and what you have said about the importance of the reform of primary health care system as the key to enhancing prevention and promotion. That is a critical thing to keep pursuing.

We should review the organization of services in other countries. There is currently some interesting work on that score in which we are involved through the OECD.

Let me come back to your first point about prevention and promotion not being done strictly for the purposes of saving money. I do not want to leave the impression that we do not know anything about savings that might accrue in some areas through working on some risk factors relative to certain diseases or health conditions. There is a strong correlation between reduction in certain risk factors and reduction of certain diseases. We know that there are savings to be realized. The relationship between smoking and cardiovascular vascular disease is clear; the evidence is already there. We know that reduction in smoking is the most important factor in reducing mortality and morbidity associated with cardiovascular disease.

When you add it all up, the relationship between certain risk factors and disease or health conditions is not absolutely clear. Even where it is clear, you do not know what other diseases might ensue.

Let us go back to one of my points about the factors contributing to health spending. Fiscal capacity and values of the public are such important drivers that it is not simply a question of looking at the state of health of the population, assessing the costs associated with the care and treatment of those diseases, and arriving at a budget for our health systems. All the forecasting problems we mentioned must also be factored in.

Our conclusion is that there are resources to be saved by the application of good prevention and health promotion measures. That is one reason to pursue them, but the most important reason is to have a healthier population for as long as life lasts for the individuals in question.

The Chairman: I have one last question. Given the importance of using primary health reform as the means of delivering a lot of effective health promotion programs, do you run into constitutional issues in the sense that certain provinces ask for the money and want to decide which programs to adopt?

I am trying to understand how, from a federal standpoint, we get around the fact that health is a provincial responsibility. Are there ways of delivering a prevention program without going through the provinces, or without getting into the worst box of all, which is give them the money and hope they spend it on something but have no guarantee?

Ms Hoffman: I could maybe divide the world of prevention and promotion activity broadly into two domains. The first has to do with the delivery of prevention and promotion services to individuals, which is what should happen, as primary care reform unfolds, through primary health care centres in communities where physicians and nurses and other providers are being supported to provide a certain basket of services to a population. They will be largely providing those services to individuals. Individuals will visit that health centre and receive services.

It is difficult for us to intervene directly or influence the basket of services delivered in that kind of environment. Having said that, we are currently involved in dialogues with provincial governments about what kinds of activity ought to be pursued through primary health care centres. The Primary Health Care Transition Fund has a budget of $800 million, and provides significant leverage for discussing that kind of activity with provinces.

The other domain is more population-wide. I do not mean all 30-plus million Canadians, but somewhat targeted. Population health and health promotion activity has long been an area where federal government involvement, expertise, and contributions have been recognized. We undertake those population-wide campaigns and activities generally speaking with provinces and with community organizations within provinces. That is an area where we can operate directly, albeit in partnership with NGOs and provinces.

The Chairman: You are saying that you have not run into the constitutional question on the promotion side. On the prevention side, you have.

Ms Hoffman: It is true to a degree. However, it is not as if we have been out there trying to deliver services to individuals ourselves.

The Chairman: I am not suggesting that. I am trying to understand something. If the federal government were to decide, on the basis of a recommendation of this committee, or on some other basis, that a significant increase in health promotion and prevention funding should be undertaken, are they then in a position of having to negotiate a federal-provincial agreement? Would we be in that position? Or are we in the position that having decided to do it, the federal government could do it?

Ms Hoffman: Perhaps it turns on what one might construe as an agreement. The first ministers' accord on health was signed last fall. Following on from that, once the first ministers agreed that primary care was a significant priority, the federal government allocated $800 million to support transition costs for primary care reform.

Without passing judgment on whether or not the amount of money could have been augmented, if someone were to say in the future that the federal government is prepared to invest more money in primary health care, we will have the means - and we are pursuing those now with provinces - to put that money in the hands of those primary health care centres through the provinces.

The Chairman: I understand you can funnel the money the way you want into primary care. Suppose we want to be more targeted than just primary care. We understand that primary care has to be delivered, but we really want the money to be focused on health prevention and health promotion activities, and primary care simply becomes a delivery mechanism. Is it possible to do that, or does that require a new federal-provincial agreement?

Ms Hoffman: It certainly requires federal-provincial concurrence. Not to dwell on the current money and the current program that we are discussing with provinces, but at one level, it simply requires governments to agree they want to see more of that primary care resource directed to prevention and promotion. That is on the table now in our discussions with provinces, and it was one of the priorities in the first ministers' agreement from last fall.

Senator Morin: The federal government has a very important role in health promotion. The best example of that is that the tobacco issue is entirely in federal hands, and we are not tackling it.

Ms Garrard: Some other models do health promotion at the community level. The children's programs that we do - Aboriginal Head Start, the Community Action Program for Children, and the Canada Prenatal Nutrition Program - are cooperative programs with provinces targeted to certain outcomes, so there are ways of doing it. Certainly there is a lot of research, surveillance, infrastructure, testing of innovative models, and sharing of best practices, in addition to social marketing and messaging, that are clearly and undisputedly areas where they look for federal leadership.

Mr. Halliwell: I should like to mention the issue that arose previously. You have to be careful not to silo the money for these activities, because the best benefits from integrated care come from the savings associated with particular costs being inside the same envelope. If someone else gets the savings, then the incentive to accrue them is not the same. In the description Ms Garrard gave of the effectiveness of programs in a nursing home, the nursing home is internalizing the savings and doing that calculation, and they have the incentive to realize those savings. If you silo money in many different activities, you will not get that effect.

The Chairman: The costs will accrue to you and the savings to someone else, so the incentive to save the money does not materialize.

I thank all of you for attending. I appreciate your information. It was very helpful.

The committee adjourned.