Under-Serviced Areas And The Canadian Health Care System:

A Case Study

Joe Costa

002031995

September 26, 2001

Instructor: Linying Dong

Under-serviced Areas And The Canadian Health Care System:

A Case Study

The Canadian health care system, founded on the five ‘principles’, public administration, comprehensiveness, universality, accessibility, and portability, has been ranked among the best in the world for many years. Despite the apparent success of this system, there are still many Canadians who feel that the quality of care could be vastly improved by eliminating many of the unnecessary inefficiencies inherent in the system. Currently, a major contributor to the inefficiency of the Canadian health care system is the predominance of physicians working in large cities and, consequently, the increasing number of so-called ‘under-serviced’ or rural areas. Over the course of the next two years, I recommend that the Canadian government introduce a system of doctor to patient ratios and create funding ceiling limits on areas exceeding the allowed ratio while providing incentives for areas below the ratio.

Problem causes:

Several factors are responsible for the growing number of under-serviced areas:

The number of experienced practicing physicians has declined. With roughly one doctor for every thousand people in Canada, ¾ of those doctors not accepting new patients, it comes as an even more disheartening blow that it is estimated one in four physicians will retire in the next four years.

Dwindling government and private funding has led many doctors to relocate, seeking more financial security. Not only are doctors relocating to larger more populated cities where they can reap the benefits of the current fee-for-service funding, but also, many Canadian doctors are being enticed south of the border by a stronger US dollar and lucrative benefit and salary packages.

Access to technology, peer support, and lack of other resources available in larger cities deters doctors from working in rural areas. In a demanding profession such as medicine it is often necessary to have access to peer support in order to reduce workload and work stress. Unfortunately, this kind of support is often not available to doctors working in smaller isolated communities. Similarly, doctors in isolated communities feel added pressure to perform their jobs well given the lack of access to the latest technology. Obviously too, a significant deterrent to practicing in rural communities is the fact that smaller communities also means fewer people and in turn, under the current system, less financial opportunity for doctors in these areas.

Criteria for a solution:

A viable solution to the aforementioned problem must address the following issues:

  1. Reduce costs to the health care system
  2. Increase incentives for working in under-serviced and rural areas
  3. Ensure that a proper proportion of physician service is available to the needed areas
  4. Maintain physician autonomy and allow for flexibility in choosing where to practice
  1. Consistent with the goal of creating a more efficient health care system, any proposed change must therefore also reduce cost to the overall system.
  2. To overcome some of the existing barriers, as well as to draw in and maintain more doctors in rural areas, the proposed solution must also afford incentives.
  3. A proposed solution must also be careful to ensure that not only are physicians drawn into under-serviced areas, but also that all areas are constantly re-evaluated to ensure that redistribution of physicians does not lead to the creation of other under-serviced areas.
  4. Lastly, as physician’s work is highly specialized and in demand, some measure of autonomy must be maintained allowing for a degree of choice concerning where to practice

Alternatives:

  1. Force newly graduating physicians to work in under-serviced areas or alternatively offer ‘ free’ medical tuition in exchange for an under-serviced area work term. The high cost of medical tuition these days may make ‘free’ tuition an attractive incentive for many future physicians to work in under-serviced areas. As it may be difficult to encourage other physicians to leave their current practice and nearly impossible to legally force them to do so, a viable alternative may be to compel new graduates to provide a term of work in an under-serviced area. This type of proposal would help to re-establish a balance in the distribution of physician services and ensure that the needs of under-serviced areas are met. However, this approach would not address the concern of reducing cost to the overall system, in fact, costs may increase as other areas could still potentially remain over-serviced since physicians are not being drawn out of over-serviced areas. As well, physician autonomy would be sacrificed and no incentives would be in place to ensure physicians remain in under-serviced areas after the required work term.
  1. Implement a technological /internet link to hospitals in larger cities. The possibility of a conferencing type technology through the internet is now entirely feasible and would help physicians working in rural areas remain connected to big city resources. Freed from the concerns of lack of peer support, and with colleagues close at hand, many doctors may feel more comfortable practicing in rural areas. This solution would take physicians need for autonomy into account, however would likely not be sufficient to draw and maintain the necessary number of physicians. Moreover, technological change would be extremely resource intensive and it is doubtful that the derived benefits would outweigh the costs of implementation and maintenance of such a system.
  1. Impose a system of doctor/patient ratios and create funding ceiling limits on areas exceeding allowed ratios while providing incentives for areas below the ratios. In this system, areas deemed over-serviced could have their physician funding capped at lower levels than those of under-serviced areas. Furthermore, severely under-serviced areas could have the cap completely removed. The financial incentive would serve to entice physicians out of over-serviced areas into rural and under-serviced areas while at the same time reduce costs to the overall health care system by eliminating unneeded over-service and wasted resources. As well, constant monitoring of doctor-patient ratios would serve to ensure no new imbalances are created thereby ensuring the proper proportion of physicians in needed areas. Finally, this solution allows for physicians to retain their autonomy and their right to choose where they desire to practice.

Recommendation:

I recommend that the Canadian government implement the third alternative, impose a system of doctor/patient ratios and create funding ceiling limits on areas exceeding allowed ratios while providing incentives for areas below the ratios. This solution clearly meets the established criteria mentioned above and will thus be invaluable for increasing efficiency and quality of care in the Canadian health care system through elimination of the imbalances in physician distribution.

Implementation over the next two years should consist of two stages. In the first stage, year one, data should be collected with respect to the current doctor/patient ratios and agreed upon standards for new ratios should be developed. It is essential that in that time, the terms ‘over-serviced’ and ‘under-serviced’ be clearly defined and rules put in place for the subsequent calculation of ceiling limits and capitation rates. It is advisable that the government create a task force, including representatives from physician and government groups as well as community representatives, to fulfill the objectives of stage one. In the second stage, year two, the government must take steps to pass legislation while at the same time promoting the new incentives package. It will be absolutely necessary in this stage for the government to work closely with hospitals and other health care providers to ensure the concept is thoroughly promoted to physicians. By the end of the two-year implementation period the new system should then be ready to assist the first relocating physicians in the transition process.