Shift in Ontario health service utilization between 1996 and 2001 produces significant savings in avoided hospital costs.

During the past three decades hospital utilization in developed countries has dropped dramatically. In the United States the rate of hospitalization has dropped 40 percent since 1980, and in Canada during the 1990’s, hospitalization rates dropped nearly 30 percent. Better knowledge and public education about illness and disease, innovative procedures, new diagnostics and effective new medicines all contribute to the shift from inpatient to outpatient or community-based care. If hospitalization rates and lengths of stay had remained the same in 2001 as in 1996, an additional 1.45 million bed days would have been utilized in 2001.

Source: Canadian Institute for Health Information, National Health Expenditures 1975-2003, and Hospital Morbidity Data Base 1996/96 and 2000/01

As ‘baby-boomers” age and the prevalence of chronic conditions associated with aging increases, health care utilization and spending will continue to increase dramatically. Managing health care in an integrated way and shifting costs from inpatient to outpatient care are essential to maintaining the financial sustainability of health care in Canada. In an era when health policy is often driven by cost-containment rather than a commitment to quality and improved outcomes, the cost-effectiveness of appropriate utilization of innovative treatments is often overlooked. Improving access to new treatments is an effective way to improve both the quality and the cost-effectiveness of health care.