Financial sustainability crucial to long-term success of health-care reform

 Pierre-Yves Julien, chair of the Canadian Institute of Actuaries’ health committee, says actuarial science can help health-care policy-makers.

Pierre-Yves Julien, chair of the Canadian Institute of Actuaries’ health committee, says actuarial science can help health-care policy-makers.

Anew Health Accord between the federal government and the provinces and territories must ensure that whatever system is put in place is financially sustainable in the long term, and the best way to do that is by applying actuarial science from the outset, according to the Canadian Institute of Actuaries (CIA).

“The CIA believes that applying proven actuarial science to healthcare cost forecasting and planning by governments at federal and provincial levels will help secure a sustainable, affordable and effective publicly funded health-care system for Canadians,” says Pierre-Yves Julien, chair of the CIA’s health committee.

The involvement of actuaries in health-care reform planning is nothing new, he adds. In 2013 the CIA, in partnership with the New Brunswick Health Council, investigated the cost drivers in health care in that province.

Also in 2013, the CIA co-sponsored a report with the Society of Actuaries on the sustainability of the Canadian health-care system and the impact of the 2014 revision to the Canada Health Transfer, which indicated that without significant government intervention, the Canadian health-care system in its current form was not sustainable.


The future of health care is one of the most important decisions Canada has to make. It’s clear that the current model is not a viable long-term option, but right now some provincial governments are facing decisions on what changes to make without all the facts they need to back them up.
— Pierre-Yves Julien is chair of the CIA’s health committee

“The future of health care is one of the most important decisions Canada has to make,” says Mr. Julien. “It’s clear that the current model is not a viable long-term option, but right now some provincial governments are facing decisions on what changes to make without all the facts they need to back them up. That’s where actuaries can help them by, for example, demonstrating how to mitigate the financial risks associated with an aging population, increasing demand and evolving treatments.”

He adds that the lack of long-term prediction based on actuarial science has already resulted in some provincial health-care programs being curtailed or rationed because of the lack of funds to pay for them.

“It’s obvious that the initial decision-making process is often not based on the long-term cost of the system, which is why it becomes financially unsustainable,” says Mr. Julien.

Actuaries have unique skills, talents and abilities that can be helpful in policy discussions about the Canadian health-care system, he adds. Their training, coupled with objectivity and independence, makes them effective assets in planning health care for Canadians. That’s important because a successful, sustainable health-care system is as crucial to Canada’s future as infrastructure.

“For example, when we consider building a new oil pipeline, we assess its importance to Canada’s economic prosperity and our ability to compete in the global economy. So why not assess the health-care system in the same way?” he asks. “We want to attract new immigrants to Canada to benefit our economy, and having a robust, reliable health-care system that doesn’t let people fall through the cracks will help us do that while also providing a more stable system.”

Mr. Julien says the benefits of involving actuaries in the health-care planning process include the development of a system that is sustainable. Without reliable data upfront, there’s a risk of implementing a system that may seem impressive at first, but will collapse over time as it becomes unaffordable.

Canada already ranks as the 5th most expensive OECD country in terms of per capita health-care expenditures, and spending is projected to increase from 8.2 per cent of GDP in 2012 to 18.9 per cent in 2037.

“It’s imperative that we all understand the long-term cost implications of health care, and actuaries can help in that process,” says Mr. Julien. “They would provide the clarity needed to assess the true costs of a new system, and Canadians would then be able to decide if they are prepared to pay for it.”

For more related to this story visit globeandmail.com