This paper is concerned with questions relating to demographic change (population growth and aging) and its implications for operating a publicly funded health care system in a Canadian setting. It provides an assessment of how prospective population changes alone would affect the share of health care costs in total national income in Canada over the next several decades; it provides also an analysis of how actual patterns of hospital service provision changed in Ontario over the last decade in response to budgetary restrictions in a period of rising demand for services. Finally, a case is made for viewing health care as an integrated system; a description is provided of a set of computer-based models that have been developed to facilitate analysis of the health care system, and illustrative projections are discussed.

Claims that the health care system is about to be engulfed in a “wave of grey” have become commonplace. Recent cost escalation is commonly attributed to the aging of the population, and there is no shortage of dire warnings about the cost implications of the even more dramatic aging, and costs, still to come. These claims have been largely unsubstantiated. Yet they persist for a number of reasons. First, over long periods of time, the effects of demographic trends can be (and probably will be) quite substantial. But these effects move like glaciers, not avalanches. Second, the effects of aging populations on some types of services which cater differentially to seniors will be much more dramatic; observers of those sub-sectors (such as long-term care) tend to extrapolate that sector-specific experience to health care generally. Third, at the “coal-face,” health care providers are seeing their practices become ever more dominated by seniors. They mistake this increased “presence” of patients aged 65 and over in their practices as evidence of the effects of demographic changes. In this paper we discuss each of these sources of error about the effects of aging population on health care costs. We focus primarily on the confusion between changes in patterns of care for particular age groups, and changes in overall levels of care. Quite extensive empirical evidence has been collected over the past decade from analyses of British Columbia data bases, and these findings are not unique, in Canada, or beyond. The common finding of this body of research is that population aging has accounted for very little of the increase in health care costs over the past three decades, in Canada or elsewhere. Health care utilization has increased dramatically among seniors. But this has had less to do with the fact that there are more of them, than with the fact that the health care system is doing much more to (and for) them than was the case even a decade ago. This suggests that the appropriate care of elderly people should be a central issue for health care policy and management, but that demographic issues are, in the short run at least, largely a red herring.

Use of medical services by the elderly population is increasing. While rising numbers of elderly persons account for much of the overall increase, per capita increases in use of medical services within this group have been substantial. This phenomenon is commonly attributed to greater need due to the “aging” of the elderly population (i.e. an increased proportion of those 85 years of age and over) and to changing patterns of morbidity or to changing patterns of servicing the old and sick. Research to date suggests that the impact of the aging of the elderly population has been small. However, because the relationship between morbidity and rising utilization has not yet been studied, there is considerable debate about the extent to which increased “need” for care contributes to patterns of rising utilization. This research studied the impact of changes in numbers, demographics, and morbidity patterns of the elderly on per capita and aggregate consumption of ambulatory physician services at two points in time. Linked survey and physician claims data for representative samples of the elderly in 1971 and 1983 were used to study patterns of utilization of total ambulatory, consultative and non-consultative care by age and health status. The research found that per capita utilization of both consult and non-consult visits rose across all categories, with older individuals and those in poor health experiencing greater increases in utilization than younger and healthier individuals. At the aggregate level, a large percentage of the increase in utilization of medical services was related to increased numbers of elderly. Changes in ‘need’ attributable to aging of the elderly population and increased morbidity had only minor effects. At least 35 per cent of the increase in non-consult visits and 50 per cent of the increase in consult visits were not specifically related to changes in need of the elderly population and remain as unexplained changes in patterns of servicing individuals. While some of this increase was directed to individuals in poor health, the majority of increased servicing (32% of the increase in non-consultative visits and 58% of the increase in consultation visits) was directed to individuals in good health. Policy implications are discussed.

Long-term care spans a broad range of very diverse services and a pivotal location within the overall continuum of health and health care. Changes in one component of care affect and are affected by all other components as health care may be characterized as a dynamic series of interdependent processes and persons. The current state of Canadian health care, in general, and long-term care, in particular, demands the skilful juggling of universality and diversity to maximize both these characteristics without sacrificing either. In an atmosphere of reform and fiscal restructuring, the organizational, utilization and financing implications for this system on a tightrope are substantial. The challenges are of major proportions in maintaining a balance while securing a future system that is efficient, efficacious, equitable, effective and empowering.

Long-term care is available for individuals with functional incapacities. Long-term care includes medical, social, and personal hygiene services, which help to maintain the autonomy of the elderly and allows them to live with dignity in spite of loss of autonomy. This definition provides long-term care services with a goal and a clientele. However, are individuals with functional incapacities first and foremost chronically ill? Should long-term care services be conceptualized as independent from medical care? Provincial government policy documents promote a social model of long-term care which privileges community services as opposed to institutional services. What in fact does this choice imply? To what extent have resources been allocated in accordance with these objectives? A study of these questions based on Canadian data on the relationship between illnesses, disabilities and functional incapacity and data from a historical survey of expenditures in Quebec for hospital care, medical care, institutional long-term care and community services indicates that illnesses, disabilities, and functional incapacity, although strongly correlated in an elderly population, cannot be collapsed into one big category for planning services; co-ordinated services in a multidisciplinary approach are needed, not dominance from one professional group. As to costs, an examination of the data shows that in relative terms costs for community care tended to increase significantly in the recent past. Yet it is not clear that there has been a transfer from short-term medical and hospital services to long-term care. However, there has been an important internal change in hospital costs, with the elderly representing the only group whose costs are rising. In short, despite the political rhetoric on long-term care for the elderly promoting a community approach, these services' main function is still the surveillance of the vulnerable elderly in both short- and long-term care facilities; adapting the elderly to their environment and the environment to the elderly play a growing, though minor, role in the overall picture of medical and social services.

Although Canadian Medicare gives the population “reasonable” access” to all “medically necessary” physician and hospital services, long-term care is not formally subject to those conditions. In Ontario, long-term care involves a “patchwork quilt” of government, charitable, for-profit, and personally-provided services; an ongoing consultation has been under way in an attempt to rationalize service financing and provision. This paper reviews the series of policy proposals and the accompanying public consultation processes. It concludes that the emphasis on “community involvement” without a clear definition of “community” or the goals of participation has paradoxically increased the “scope of conflict,” increased frustration among stakeholders, and made policy action more difficult.

This paper describes the nursing home component of the population-based health information system developed in Manitoba, and four years (1989/90 to 1992/93) of data produced by this information system. The study presents regional comparisons of nursing home bed ratios, admissions per 1,000 elderly, days of care per capita, mean expected length of stay for new admissions and median length of waiting time prior to admission. Selected hospital indicators for long-stay patients are also presented. The study indicates that a population-based information system is a useful tool for managing the nursing home sector by highlighting the degree to which a province achieves distributional equity and equality of access to nursing home beds.

The last “great pension debate” in Canada came to an end in the early 1980s but is now about to resume. The terms of debate have changed significantly, however. As a contribution to the debate, this paper aims to identify emergent positions and the new social, economic and political conditions to which they are a response. “Conservative” strategies have emphasized privatization of the pension function and greater emphasis on providing income-tested benefits to the low income elderly. New “progressive” alternatives have advocated a redesign of the welfare state to allow for a more flexible model of retirement and the economic life course more generally. Each is a response to real changes in the fiscal capacities of governments, the conditions for successful economic performance and the distribution of economic risk among age groups. The empirical core of the paper uses data from the Survey of Consumer Finances to show how the age distribution of economic well-being has changed since the the 1960s when the current welfare state was designed. Our aim is not to resolve the debate but to set it in context and identify the main assumptions and models underlying alternative strategies for reform.

Calls for user fees in Canadian health care go back as far as the debate leading up to the establishment of Canada's national hospital insurance program in the late 1950s. Although the rationales have shifted around somewhat, some of the more consistent claims have been that user fees are necessary as a source of additional revenue for a badly underfunded system, that they are necessary to control runaway health care costs, and that they will deter unnecessary use (read abuse) of the system. But the real reasons that user fees have been such hardy survivors of the health policy wars, bear little relation to the claims commonly made for them. Their introduction in the financing of hospital or medical care in Canada would be to the benefit of a number of groups, and not just those one usually thinks of. We show that those who are healthy, and wealthy, would join health care providers (and possibly insurers) as net beneficiaries of a reintroduction of user fees for hospital and medical care in Canada. The flip side of this is that those who are indigent and ill will bear the brunt of the redistribution (for that is really what user fees are all about), and seniors feature prominently in those latter groups. Claims of other positive effects of user fees, such as reducing total health care costs, or improving appropriateness or accessibility, simply do not stand up in the face of the available evidence. In the final analysis, therefore, whether one is for or against user fees reduces to whether one is for or against the resulting income redistribution.

This paper examines the question of whether the costs of ambulatory medical care (AMCC) in a universal health care system, such as that in Quebec, are related to household income. Questionnaires completed by 32,000 respondents for the Enquête Santé-Québec, 1987 (ESQ87) were matched with records in the Quebec Medicare system (La Régie d'Assurance-maladie du Québec, RAMQ). Approximately 90 per cent of the individuals were matched. Respondents living in remote regions were excluded from the study since a major portion of medical care in these regions is not reimbursed through fee for service; visits to physicians not on fee for service are not recorded in RAMQ files. At the individual level, the costs of ambulatory medical care over a two-year period decreased slightly with income, but at the household level, costs increased for those with higher incomes since the number of individuals in the households increased with income. These associations disappeared when the age of the respondents was taken into account. State of health is directly related to costs of care. Among health risks, availability of social support decreases costs of AMCC for both children and adults, while unemployment increases costs for adults only. Education of parents is linked with higher levels of costs for children, but AMCC decreases with increased education of adults. Finally, costs are lower for children in larger families compared with those in smaller families. To conclude, income does not affect costs of AMCC in Quebec, although variables associated with income, such as education, unemployment and family size, do have definite effects on costs. The absence of a link between psychological distress and costs for the elderly is a matter of concern since it confirms the difficulty the elderly experience in accessing psychiatric care.

To define policies to cope with the aging population of developed countries, one must combine several analytical dimensions in space and in time. Is there a contradition between short-term policies to contain the expansion of the care segment of health services and the potential increase in needs for the “old-old” segment of the population? How should policies aimed at the security of income be balanced with policies aimed at the organization of services, be they curative services or local services designed to protect the autonomy and dignity of the elderly? In this text, an attempt is made to put together the bits and pieces of the policy for aging puzzle.