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Canada’s health-care system braces for hike in costs with influx of seniors

This is part of the Globe and Mail's week-long series on baby boomers and how their spending, investing, health and lifestyle decisions could affect Canada's economy in the next 15 years. Is Canada ready for the boom? For more, visit tgam.ca/boomershift and on Twitter at #GlobeBoomers.

Canada's provinces and territories are under pressure to revamp their health-care systems and rein in costs as baby boomers age.

Seniors account for nearly half of the country's health spending and that is expected to grow as the largest living generation in Canada becomes elderly.

"It is not sustainable how we fund health care. The types of increases that we have seen [are] much faster than tax growth and with an aging population it will only get worse," said Matthew Stewart, associate director with the Conference Board of Canada's national forecast and analysis division.

Canada spends an average of $6,000 a person on health care, with the highest costs skewed to newborns and seniors, according to the Canadian Institute for Health Information.

An average of $6,298 is spent on a person aged 65 to 69. The cost escalates to $11,557 for someone aged 75 to 79 and then jumps to $24,387 for someone aged 85 to 89, according to the health institute's 2013 data.

In comparison, an average of $1,741 is spent on someone aged 20 to 24 and $2,290 for a person aged 40 to 44.

Although aging has not historically been responsible for the massive hike in health expenses, it will play a bigger a role given that boomers make up more than a quarter of the country's population.

Seniors will gradually account for a larger share of the country's health-care bill.

This year, provincial and territorial spending is estimated at $149.8-billion with 47.2 per cent or $70.7-billion used for seniors, according to the Conference Board of Canada.

By 2020, government spending is expected to climb to $188.4-billion, with half or $94.8-billion used for the elderly. By 2035, the share increases to 61 per cent, according to the board.

The other strain on Canada's health-care system is funding, with two-thirds coming from the public purse. After boomers leave the work force, they will pay less tax, resulting in lower government revenues.

Nova Scotia, which has the oldest average age population in the country, is racing to overhaul its health system. The maritime province has a population with high rates of chronic disease and is struggling with long wait times for surgeries.

It is consolidating services under one umbrella to slash administrative expenses and is looking for other ways to cut costs. It has poured additional funds into home care in an effort to ease the burden on hospitals.

"We know that we have to improve economic performance in our province," Nova Scotia Health Minister Leo Glavine said. "We are going through a whole restructuring of our home care. We know we have to get this one right."

Hospitals gobble up the largest chunk of public funds. This year, they are expected to account for a third, or $65-billion, of Canada's total health-care bill.

Policy-makers continue to wrestle with the nation's overreliance on hospitals. The institutions are routinely used by people without family doctors seeking non-emergency care. It is also used as a temporary care facility by people who need medical help but can't get it anywhere else, such as those suffering from dementia.

This has driven up costs, strained the system and crowded out patients who need critical care. It could get worse with chronic diseases such as heart problems and diabetes prevalent in seniors.

For example, at the University Health Network of four major Toronto hospitals, 140 beds are being used by patients who do not require acute care.

"You can see that the degree of co-ordination is not optimal," said Peter Pisters, chief executive of the University Health Network.

Dr. Pisters said all parts of the health-care system, from hospitals to family doctors and home-care nurses, have to work together and be held accountable for a patient's outcome instead of operating in silos.

The lack of co-ordination means that often patients outside of a hospital setting are not properly monitored, which can lead to health conditions deteriorating and a trip back to the hospital.

"Conditions can be managed in a collaborative approach and we can avoid emergency room admission," Dr. Pisters said.

The country is on track to spend a total of $219-billion on health care this year, including public and private funding; that is 1.6 per cent higher than the previous year and 56 per cent more than 10 years ago.

Spending eased in the past few years due to budget constraints after surging over the first part of this century as governments sought to cut wait times for key services such as heart surgery and joint replacement.

"Governments can clamp down on spending. They have shown that they can and successfully do that," said Steve Morgan, professor of health policy at University of British Columbia. "It is not politically easy, but it's technically possible."

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