Economic Cost of Wait Times in Canada: Preliminary Assumptions and Findings

1. Draft – not for quotation Economic Cost of Wait Times in Canada: Preliminary Assumptions and Findings Robin Somerville Director, Corporate Research Services The Centre for Spatial Economics CSLS-CMA Invitational Roundtable on Health Care and the Economy Ottawa, ON March 7, 2006 ©2006 The Centre for Spatial Economics

2. BCMA/CMA Study Overview • Rationale • Wait times will always exist in a universal access health care system. The length of the wait time is dependent on multiple factors but waits in excess of recommended maximums impose costs on patients, the health system and the Canadian economy. • Phase I • Estimate the number of patients who are waiting for longer than the recommended maximum period for treatment and the average length of their wait • Preliminary analysis for this phase is complete • Phase II • Estimate the economic costs associated with waiting in excess of the recommended maximum period for treatment • Data collection, assumptions and analysis for this phase is underway ©2006 The Centre for Spatial Economics

3. Wait Times Research • Why Wait? • With universal access, wait times represent the substitution of “non-price” rationing for the price rationing that occurs in other competitive markets • Cost of Waiting: Other Research • Cullis and Jones (1986), $5,600 per patient in the UK in 1981 • Propper (1990), $1,100 per patient in the UK in 1987 • Globerman (1991), $2,900 per patient in Canada in 1989 • Esmail (2005), $900-$2,700 per patient in Canada in 2004 ©2006 The Centre for Spatial Economics

4. Wait Times in Canada • Fraser Institute • Wait times in Canada are falling - slowly • Conference Board of Canada • Wait times in BC, Alberta, Saskatchewan and Ontario are better or near the average for OECD countries with comparable health systems • Public Perception & Policy • Public opinion in Canada favours improved access and shorter wait times • Public policy is attempting to address the issue ©2006 The Centre for Spatial Economics

5. Conference Board of Canada: Wait Time Benchmarking Gold – represents performance in the top third of OECD countries and provinces ©2006 The Centre for Spatial Economics

6. How Long is too Long? • While wait times must exist, the length of wait is a matter of public policy • Prior studies have examined the overall cost of waiting using various methodologies • This study is the first not just the total wait time cost but also the incremental cost of waiting longer than the maximum time recommended by physicians and public health officials • The economic costs will be driven by the: • Impact from reduced productivity of waiting longer for treatment and caring for patients • Additional health costs associated with longer wait times ©2006 The Centre for Spatial Economics

7. Wait Times from the Patient’s Perspective ©2006 The Centre for Spatial Economics

8. Current Wait Times for Treatment CABG urgent & elective wait times from the Fraser Institute CABG provincial wait time data in BC and SK inconsistent with Fraser Institute survey data ©2006 The Centre for Spatial Economics

9. Maximum Recommended Wait Time Fraser Institute: “reasonable” wait time average of 4 provinces ©2006 The Centre for Spatial Economics

10. Maximum Wait Times Wide range of opinion in what constitutes the maximum or reasonable wait time for treatment Study will use Wait Time Alliance recommended maximum wait times CABG maximum wait time developed by assuming elective procedures account for 68% of all cases ©2006 The Centre for Spatial Economics

11. Excess Wait Time Current data show that treatment wait times vary considerably by province and procedure ©2006 The Centre for Spatial Economics

12. Excess Wait Time Methodology • Observation • If the median wait time equals the maximum recommended wait time, 50% of patients have to wait longer than recommended • Data Requirement • The distribution of patient wait times by procedure and province • Approach • Proportion of patients with excessive wait times multiplied by their average wait (less the recommended maximum wait) yields the average time a patient can expect to wait for treatment beyond the recommended maximum period • The total wait time (or queue) can be estimated by multiplying the previous number by the incidence of the condition and the province’s population ©2006 The Centre for Spatial Economics

13. Patient Wait Times The bolded figure highlights the median patient wait time The red shading indicates the Wait Time Alliance maximum recommended wait time ©2006 The Centre for Spatial Economics

14. Proportion of Patients with Excessive Wait Times There are always some patients that wait longer than recommended ©2006 The Centre for Spatial Economics

15. Average wait for Patients Not Treated Within Recommended Maximum Period This estimate is based on the proportion of patients treated after the recommended maximum wait time multiplied by the average length of their wait ©2006 The Centre for Spatial Economics

16. Expected Wait Beyond Recommended Maximum Wait Time This table shows the average wait time beyond the recommended maximum that a patient can expect after being scheduled for treatment ©2006 The Centre for Spatial Economics

17. Incidence Rates per 100,000 People Incidence rates are used to estimate the size of the queue in each province in terms of the number of people waiting beyond the recommended maximum period for treatment Need to look for crude instead of standardized rates Cataract surgery rates are just for acute/inpatient ©2006 The Centre for Spatial Economics

18. The Queue • Size • The overall size of the queue (measured in patients per year waiting in excess of the recommended maximum time) is determined by the number of cases in each province times the probability of waiting beyond the recommended wait time • Patient Characteristics • Patient characteristics are used to help determine the economic cost associated with the queue • Incidence of the condition by: • Province • Age • Sex • Socio-economic status (i.e. income) • Severity (urgent, elective) ©2006 The Centre for Spatial Economics

19. Total Provincial Wait Time in Excess of the Recommended Maximum (# Years) This table shows the number of patients each year waiting for longer than the recommended maximum time for treatment This information will be used to generate the incremental economic cost of wait times in excess of the recommended maximum time ©2006 The Centre for Spatial Economics

20. Economic Cost of the Queue • The economic cost of the queue developed in the first phase will depend on the following assumptions: • Impact (if any) on mortality rates • Impact on health expenditures (pre- and post-op) • Impact on drug costs to manage the condition prior to the procedure • Impact on personal incomes from reduced hours worked • Impact on public sector income support spending • Impact on productivity – patient and care-giver ©2006 The Centre for Spatial Economics

21. for more information please contact: Robin Somerville (rsomerville@c4se.com) Director, Corporate Research Services The Centre for Spatial Economics 15 Martin Street, Suite 203 Milton, ON Canada L9T 2R1 phone: 905-337-3855 web: www.c4se.com ©2006 The Centre for Spatial Economics