Q. What key challenges is the rapidly-aging population posing to the health care system?
At a macro level, I think what society is facing can best be described as substantial ‘fat-tail risk’. In addition to the aging of the population, many diseases that were previously fatal—like certain forms of heart disease and many cancers—are now chronic, so fewer people are dying from them. When you look at the aging Baby Boomers, the economic reality is that, as people progress into retirement, they’re not paying as much into the system as they’re taking out of it—and this is going to create tremendous pressures on the provincial government.
This is something I am thinking a lot about, and tackling it involves ‘population health management’—the aggregation of patient data across multiple information technology resources, the analysis of that data into a single, actionable patient record, and the actions through which care providers can improve both clinical and financial outcomes. This needs to be a focus for every health system globally.
Q. You have said that the best thing about Canadian healthcare is its social contract for universal care. Which aspect of the system is its greatest challenge?
In a setting where we embrace universal access, we also have to accept the reality of waiting lists. This won’t change for as long as the system is based on global budgeting, but it is slowly moving towards pay-for-performance—or ‘value-based purchasing’—so we will see a transition occurring over time. But at the moment, long wait times have become accepted by the population in exchange for universal care, which they really value.
Q. Michael Porter and others have argued that the health care system not only in Canada, but in many places, suffers from a lack of competition. What is your take on the need for greater competition between providers?
Competition is a positive factor when it is integrated into any sector of the economy, and healthcare is no exception. I would welcome an environment that is more competitive. Having said that, I also see the value of the work my predecessors have done to rationally allocate services between hospitals, so as to avoid the service-line competition that exists in the U.S. system, which is unhealthy.
For example, my predecessors decided long ago that UHN would no longer do Obstetrics, Burn Management or Trauma. In the U.S. environment—which I spent 20 years in—Obstetrics is a strategically-important service line: while it’s a money loser from a financial standpoint, it is extraordinarily important to develop relationships with women, because they are the Chief Medical Officers of their families. They control healthcare decision making one generation above and one generation below, so in the U.S. environment, you want them to be directing their parents and children to your organization.
Going forward, we worry about these kinds of relationships because we’ve got a different model here. As indicated, we’ve passed off Obstetrics (to the Sinai group), which enables us to concentrate on building a world-class reputation in other areas and, like transplant care, cardiovascular, oncology and neurology.
Q. Many people feel that primary care needs a redesign. What needs to change?
My biggest surprise upon returning to Canada has been the under-development of primary care. As it is practiced within our LHIN [Local Health Integration Network, of which there are 14 in Ontario], there are just over 500 primary care physicians in our region, and they are largely in independent solo practice. Basically, they’re running small businesses and practicing clinical medicine circa 1930.
Many of them are not even connected to acute care providers in their region. When I say ‘connected’, I don’t just mean digitally; it’s even more important to be connected in other ways that create value—with respect to making clinical decisions and the coordination of care. These are the things that help to reduce hospital admissions—and reduce re-admissions. If I compare it to the evolution of primary care in the U.S., we have a lot of work to do to bring us to a point where every Ontarian can feel assured that their primary-care doctor is integrated into the system.
Q. As indicated, you recently returned to Canada after many years in U.S. healthcare, so you’ve had a birds-eye view of both systems. What are your key observations?
I have two. The first is, as Canadians, we are hard-wired to compare ourselves to the United States, and when we do that in healthcare, we tend to feel quite comfortable. According to OECD rankings, Canada is number nine globally and the U.S. is Number 10—so we feel proud of the fact that we’ve got a better system than they do. But if you take a step back and look at the momentum of the U.S. system following the 2010 Affordable Care Act, and if you were a witness (as I was) to the five years of dramatic change that followed that visionary legislation, and if you saw all the organizations racing down a path to population health management, you would realize that the U.S. could surpass us—very quickly.
The second thing that strikes me are the substantial differences in capital structure. When you look at the mission-based, non-profit system in the U.S. and its capital structure, it is substantially different from a public hospital in Canada. In the U.S., if you’re running an integrated health system, your sources of capital would include operating margins in well run hospitals that might be 10 or 15 per cent, and that capital is available for strategic investment. You’d also have access to capital markets for debt financing, which generally speaking is not available to public hospitals or academic medical centres in Canada. And, of course, you would have access to capital through development dollars and philanthropy.
There are consequences to these differences in capital structure. For UHN, running an operating margin of less than two per cent and having very limited access to capital markets through municipal bond financing and other strategies, there is substantial evidence of delayed investment of deferred maintenance, and this translates into substantial gaps. And information technology gaps are also widening between the U.S. and Canada.
If you wanted to build a new patient care tower in Toronto, you would have to get into a provincial queue, and the timeline to get capital from the Ministry of Health would be about 10 years. If you wanted to build a patient tower in Houston, you could have capital and a shovel in the ground within in 24 months.
Q.You have said that we are at an inflexion point in healthcare right now, and that ‘amazing things’ are going to happen in the next 10 years. Please explain.
One of the biggest changes we will see is the integration of genomic information into healthcare. In the very near future, we will be taking blood from every patient who comes into UHN and drawing a blood sample from every newborn child. We will be able to derive whole-body sequencing data, and this will allow us to deliver targeted, individualized care. For example, if, in the future, I get hypertension related to my job, I will present to one of our physicians for care and she will be able to use sequencing data from me personally to decide between three different (but medically-equivalent) drug regimens—knowing how I will personally respond to each regimen. Also in the near future, parents will take their newborn child home with a genomic profile and a health and wellness plan to help that child live a long and healthy life.
Dr. Peter Pisters is CEO and President of the University Health Network, which includes Princess Margaret Cancer Centre; Toronto General Hospital, Toronto Western Hospital and the Toronto Rehabilitation Institute. He returned to Canada in 2014 after a successful career as a cancer surgeon, researcher, professor and hospital administrator—the past 20 years of it in Houston at The University of Texas MD Anderson Cancer Center.
[This article has been reprinted, with permission, from Rotman Management, the magazine of the University of Toronto's Rotman School of Management]