Bend it like Ceci: Finance minister tries to flatten health-care cost curve

Finance Minister Joe Ceci says bending the curve on healthcare costs is the key to containing overall spending, eventually leading to balanced books by 2024.

'We had a goal of four per cent in terms of 2015-2016 health spending increases. We didn't achieve that'

Finance Minister Joe Ceci said health-care costs will come down in the future. (CBC)

Finance Minister Joe Ceci says bending the curve on healthcare costs is the key to containing overall spending, eventually leading to balanced books by 2024.

"It's not unrealistic at all," he said Wednesday.

"The costs of the system are driven in large part by the number of people in acute-care settings," says Ceci, who emphasized the government is working on homecare, and long-term care as solutions to reduce hospital stays.

But early attempts to rein in growth in spending have already hit a bump.

Payments to doctors rose by $338 million in the last fiscal year, while drug costs jumped by $186 million.

Ceci said costs will come down in the future.
Disease prevention can significantly reduce health-care costs, says policy expert Stephanie Montesanti. (University of Alberta)

"We had a goal of four per cent in terms of 2015-2016 health spending increases. We didn't achieve that. We have a plan to reduce those costs to two per cent by 2018 and we'll get there."

Putting a lid on what has become the single biggest expenditure in the Alberta budget is fraught with challenges, according to health policy analysts at the University of Alberta.

"It all depends on what part of the curve he wants to bend," says Jeff Johnson, a professor in the School of Public Health at the University of Alberta.

"Within labour costs, physician compensation is a major component of that. However, within the overall healthcare system, our biggest costs are hospitalization."

Health promotion and disease prevention is one area that can be bent in the curve, according to Stephanie Montesanti, assistant professor of health policy in the School of Public health at the University of Alberta.

Preventative programs

"Bending the cost curve is really a long-term process," she said, pointing to the success of tobacco succession programs as one example.

"We haven't done a good enough job at investing in those preventative programs."

According to a report released by the Conference Board of Canada earlier this month, Alberta spends more money on health care per capita than any other province.

"Last fiscal year, 46 per cent of every revenue dollar earned by the province was poured into health care spending," the report said. 

Future demands on the system such as an ageing population will make it increasingly difficult to meet the province's deficit-reduction targets, the report said.

"Changing demographics, coupled with estimates for health care inflation and increased utilization suggests spending on health care will need to increase by an average of 4.8 per cent over the forecast period-double the average growth contained in the latest (provincial ) budget."

Johnson said health care salaries are a major reason why Alberta surpasses other provinces in per capita health care spending.

"For many years we've had the view that we are a 'have' province and therefore we haven't been as concerned about controlling costs and quality," he said.

"We've allowed those costs to run rampant a little bit. Paying people at a higher level and not necessarily managing the resources we're providing."

The compensation agreement between the government of Alberta and the Alberta Medical Association which represents physicians remains in place until 2018.

Wildrose heath critic Drew Barnes isn't confident the government will be able to substantially reduce healthcare costs in future.

He said they already missed the mark trying to contain spending last year.

"Last year Minister (Sarah) Hoffman talked about bending the cost curve to a three or three-and-a-half per cent increase, but at the same time she was saying that she was $240 million over budget."