Lewis: Why it is impossible to save money in health care

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The 2025-26 health budget for Saskatchewan is $8.07 billion, 6.4 per cent higher than last year, and about $6,300 per person. Privately insured services and out-of-pocket spending raise total expenditures to about $8,700 per head. Health care doesn’t come cheap.

It is expensive because it is part of the quest to win some battles against the eternal foes of mortality and decline. But health care is not omnipotent, and 80 per cent of health problems originate in non-medical factors, primarily socio-economic status. That $8 billion consumes about 37 per cent of the provincial budget. There’s no such thing as an ideally sized health budget. But it’s always worth asking whether we’re getting good value for money.

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Researchers have identified a lot of care that produces either very little or no benefit, or worse, causes harm. Estimates range from 10 per cent to 30 per cent of total spending in wealthy countries. Let’s conservatively assume that Saskatchewan’s system is a model of efficiency, and wastes only 10 per cent.

That’s $800 million a year, more than the entire highways budget, and half the social services budget that arguably does more for people’s health than more health care spending. (Decent food and shoes that fit will help more than most precautionary CT scans.) Health care is complex and full of uncertainty. Can any system get the lead out?

There are five main ways to save money in health care.:

• Pay workers less.
• Use the workforce more efficiently. Create primary care teams to repatriate work from expensive specialists. Train more nurse practitioners and fewer family doctors.
• Curtail the overuse of drugs and technologies. Educate providers and the public on the perils of overuse. Eliminate financial incentives that reward it.
• Lower the price of drugs, devices, and technologies through more disciplined purchasing, harder bargaining, and rigorous evaluation of costs and benefits.
• Reduce the need for care by creating a healthier population.

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Paying providers less is a non-starter. It’s a sellers’ market and health care unions, especially doctors, are very successful negotiators. The other approaches are in principle plausible, but they face a common problem: Canadian health care wastes money by design — it’s a feature, not a bug. Here’s how that grim reality makes it so hard to reduce waste by pursuing sensible strategies that succeed elsewhere.

There is much public praise for interprofessional teams where all work to full scope of practice. Behind closed doors, guilds protect their turf and label any changes as threats to public safety. Modest reforms that should be introduced in a year take a decade. The good or bad news: AI is coming for everyone.

Choosing Wisely Canada is a clinician-led network that has identified dozens of unnecessary tests, treatments and procedures. Overuse will persist as long as it is tolerated and until programs are in place to change behaviour. Sadly, overuse puts more money in more pockets than restraint. It is more lucrative to practice bad medicine than good.

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The deck is similarly stacked against lowering prices for drugs and technologies. Government-mandated expert committees are good at assessing costs and benefits, but manufacturers are masters at marketing to providers and the public, and lobbying governments. Patent law extends monopolies and guarantees windfall profits to winners in the innovation game. Drug companies often fund patient advocacy groups who pressure governments to cover their products. R&D budgets are heavily concentrated on the diseases of affluence because that’s where the money is.

The ultimate cost-saver is reducing the need for care. The healthiest countries in the world have smaller income and wealth disparities, more generous social programs, and inexpensive post-secondary education. Canada won’t be as healthy as Denmark without doing Danish things. Don’t expect a “healthy society” dividend any time soon.

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It takes insight, guts and strategy to save money in health care. The best reason to do it is not to lower spending, but to improve quality. Lousy health care usually costs more than excellent health care. A commitment to eliminating low-value care might be the catalyst that finally kick-starts real systemic reform.

Eliminating low-value care would be a public interest triumph. It would also reduce clinical autonomy and undermine the financial interests of many on the supply side. Guess who wins?

Steven Lewis spent 45 years as a health policy analyst and health researcher in Saskatchewan. He can be reached at slewistoon1@gmail.com.

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