FROM THE ARCHIVES CANADA’S PHYSICIAN SUPPLY Doctor-to-population ratio will decline unless Canada becomes more reliant on foreign-trained physicians
Nadeem Esmail
CANADIAN STUDENT REVIEW WINTER 2016 33 THIS ARTICLE APPEARED IN THE NOVEMBER 2008 ISSUE OF FRASER FORUM
Table 1: Age-adjustedTable 1: Age-adjusted comparison of Figure 1: Canadian physician-to-population ratio, 1961 to 2017 n recent years, Canadians comparison of physicians per have been paying a significant physicians per 1,000 population for select OECD1,000 population countries, for 2006 select 2.5 amount of attention to the supply OECD countries, 2006 Iof physicians in Canada. Reports Projections and commentaries on the issue of Rank Country of 28 physician supply appear regularly in 2.0 Iceland the nation’s news media, while studies on the issue have been produced by Greece (2005) research organizations, professional Netherlands 1.5 associations, and government Czech Republic committees across the country. Most Norway Physician-to-population ratio of these discussions and studies have Belgium come to the conclusion that there Ireland 1.0 are too few physicians practicing in 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 Slovak Republic (2004) Canada today. Sources: AFMC (2007); McArthur (1999a); OECD (2008); and Ryten et al. (1998); calculations by author. Switzerland
That conclusion is supported by Denmark (2004) the available evidence regarding Austria Canadians’ unmet health care needs Spain and the relative supply of physicians in this country. For example, in France 2007 slightly less than 1.7 million Sweden (2005) Canadians aged 12 or older reported Australia (2005) being unable to find a regular Italy physician (Statistics Canada, 2008). Germany Similarly, a research poll completed Portugal (2005) in 2007 found that 14% of Canadians (approximately five million) were Hungary without a family doctor, more than Luxembourg 41% of whom (approximately two New Zealand million) were unsuccessful in trying to Finland find a family doctor (CFPC, 2007). Korea Poland UPDATE United Kingdom In 2013, Canada’s physician to Canada population ratio was 2.6 per Japan 1,000 population, ranking Canada Turkey
24th among the 28 countries Note: Figure for Turkey was not age adjusted included in Table 1. Canada’s rank due to a low 65+ population not conducive to does not change after adjusting meaningful adjustment. Sources: OECD (2008); Esmail and Walker (2007); data for age. calculations by author. Source: OECD 2015, calculations by Bacchus Barua
34 FRASERINSTITUTE.ORG Further, after accounting for the Canada’s physician supply may fact that most other developed evolve in the coming years. nations have a greater proportion of seniors (aged 65 and older), and THE EVOLUTION OF thus a greater demand for health CANADA’S PHYSICIAN SUPPLY care services (nations with younger In the early 1970s, Canadians populations naturally require fewer enjoyed one of the highest health services),1 Canada’s physician- physician-to-population ratios in to-population ratio in 2006 ranked the developed world (OECD, 2008). 26th among the 28 developed Such generous relative access nations that maintain universal to doctors was, in light of recent access health insurance programs evidence, unquestionably beneficial for which data were available (table for Canadians. Unfortunately, in the 1) (OECD, 2008; Esmail and Walker, early to mid-1980s some government 2007; calculations by author). officials voiced concern about the generous and growing number of These facts, when combined with physicians, and recommended that evidence that increased spending on governments reduce the number physicians has been related to reduced of medical school admissions and wait times for treatment in Canada training positions available (Tyrrell (Esmail, 2003), clearly suggest that and Dauphinee, 1999). While their the supply of physician services in calls for reform were not met with a Canada is not meeting the demand. specific policy on physician supply, medical school admissions were This article seeks to add to the reduced slightly in the years that current understanding of Canada’s followed (Tyrrell and Dauphinee, physician shortage and show how 1999; Ryten et al., 1998).
Figure 1: Canadian physician-to-population ratio, 1961 to 2017 Table 1: Age-adjusted Figure 1: Canadian physician-to-population ratio, 1961 to 2017 comparison of physicians per 1,000 population for select 2.5 OECD countries, 2006 Projections Rank Country of 28 2.0 Iceland Greece (2005) Netherlands 1.5 Czech Republic Norway Physician-to-population ratio Belgium Ireland 1.0 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 Slovak Republic (2004) Sources: AFMC (2007); McArthur (1999a); OECD (2008); and Ryten et al. (1998); calculations by author. Switzerland
Denmark (2004) Austria Spain CANADIAN STUDENT REVIEW WINTER 2016 35 France
Sweden (2005) Australia (2005) Italy Germany Portugal (2005) Hungary Luxembourg New Zealand Finland Korea Poland United Kingdom Canada Japan Turkey
Note: Figure for Turkey was not age adjusted due to a low 65+ population not conducive to meaningful adjustment. Sources: OECD (2008); Esmail and Walker (2007); calculations by author. In the early 1990s, however, specific ratio that increased continuously from policies on physician supply were the early 1960s to the late 1980s, introduced following the publication peaking in 1993 at 2.1 physicians of what has come to be known as per 1,000 people. (The projections the Barer-Stoddart report. In 1991, included in this figure will be researchers Morris L. Barer and Greg discussed later in this article.) Since L. Stoddart published a discussion then, Canada’s physician supply has paper for the Federal/Provincial/ been growing just fast enough to Territorial Conference of Deputy maintain a ratio of 2.1 physicians per Ministers of Health. Their report 1,000 people (except in 1997, when recommended, among other things, the ratio fell to 2.0), now one of the reducing medical school enrollment lowest ratios among nations that by 10%; reducing the number of guarantee their citizens access to provincially funded post-graduate health care insurance regardless of training positions by 10% to meet ability to pay (table 1). In other words, the needs of students graduating Canada’s policies have restricted with M.D.s in Canada; and reducing the growth rate of the phy sician-to- Canada’s reliance on foreign- population ratio in order to maintain trained doctors over time (Barer a level that is now below what and Stoddart, 1991). Governments other nations provide through their responded in 1992 by accepting all universal access health programs, three of these recommendations, with and below the current demand for the goal of maintaining or reducing physician services in Canada. the physicianto- population ratio in Canada (Tyrrell and Dauphinee, 1999). The potential health benefits associated with having a higher Figure 1 reveals the effect of these physician-topopulation ratio (see, for decisions: a physician-to-population example, Or, 2001, and Starfield et al.,
Figure 2: First-yearFigure 2: Firs enrollmentt-year enrollment in Canadian in Canadian faculties of medicine, 1994-95 to 2006-07faculties of medicine, 1994-95 to 2006-07
2,500
ude nts 2,000
1,500 Medical school st
1,000
Source: AFMC (2007).
Figure 3: Location and professional activity of 1989 36 FRASERINSTITUTE.ORGCanadian medical school graduates in 1995-1996
In practice In training Inactive
136
1,300 Medical school graduates
55 216 2 13 In Canada Outside Canada 2005) were lost as a consequence of the number of physicians entering these restrictions. the workforce over the next seven to Figure 2: First-year enrollment in Canadian 10 years (the amount of time it will faculties of medicine, 1994-95 to 2006-07 While it is clear that the current take for these students to become physician supply is insufficient, practicing doctors in Canada). 2,500the numbers to the left of the It is also important to consider projections marker in figure 1 tell us what will happen to the physician nothing of the future. According to supply over that time in order to ude nts 2,00recent0 statistics published by the better understand the impact that Association of Faculties of Medicine government controls have had on 1,500of Canada, provincial governments medical school admissions and have been increasing the number post-graduate training during the
Medical school st of medical school admissions late 1990s and the early part of this 1,00significantly0 over the last six or decade. seven years (figure 2). In order to better understand how Canada’s physician supply will evolve over GRADUATION RATES AND the coming years, it is important to PHYSICIAN SUPPLY TO 2017 consider the impact these changes Extrapolating from Canada’s medical in school admissions will have on Figure 3: Location and professional activity of 1989school graduation rates, it is possible Canadian medical school graduates in 1995-1996to estimate the number of new doctors who will be entering the Figure 3: Location and professional workforce in the coming years. To activity of 1989 Canadian medical estimate the future supply of doctors school graduates in 1995-1996 accurately, however, it is important In practice In training Inactive to take into account the number of physicians currently working in Canada who will die, retire, or leave for employment in other nations, as these physicians must be replaced in 136 order to maintain a constant supply of physicians over time. An article published in the Canadian Medical 1,300 Association Journal sheds some light on both issues.
In early 1996, Ryten et al. followed up Medical school graduates with 1,722 medical school graduates (from an entry class of approximately 55 1,780) who received their degree 216 2 in 1989 (leaving them sufficient 13 time to complete post-graduate In Canada Outside Canada medical training). They found that only 1,300 of the graduates were Source: Ryten et al. (1998). actively practicing in Canada seven
CANADIAN STUDENT REVIEW WINTER 2016 37 years after graduation. A further who either retired or died, and that 216 were still training to practice in roughly 300 to 350 new physicians Canada, while 13 students remained would need to be added in order to in Canada but were not in active replace those physicians who left the practice. Meanwhile, 193 had left the country. In other words, maintaining country (figure 3). In total, only 88% the physician-to-population ratio in of those who graduated in 1989 were the mid 1990s would require adding practicing or training to practice as 1,900 to 2,200 new physicians to Canadian physicians in 1996. the workforce every year (between 3.1% and 3.6% of the 1996 physician Ryten et al. also found that the population)—a substantially greater number of Canadian-trained number than the 1,516 new Canadian- physicians entering the workforce trained additions (who were either in was insufficient even to maintain practice or still training to practice in the current supply of doctors at that Canada) from the class of 1989. time. In the mid-1990s, the authors estimated that approximately 650 By applying the proportions to 750 new physicians would be determined by Ryten et al., as has needed each year in order to keep been done previously by McArthur up with historical rates of population (1999a), to the number of students growth (the physician supply must who enrolled in medical schools grow with the population in order in Canada and the number of to maintain a constant ratio). The students who were awarded M.D.s authors also determined that a from 2000 onwards, it is possible further 900 to 1,100 physicians to estimate the number of new Figurewould 4: be New needed Canadian-graduated to replace thosedoctors in practiceCanadian- compared trained physicians who to the number of new doctors required to maintain physican-to- population ratio, 1995 to 2017 Figure 4: New Canadian-graduated doctors in practice compared to the number of new doctors required to maintain physican-topopulation ratio, 1995 to 2017
2,500
Physicians required
2,000 Physicians 1,500 Physicians added
1,000 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
Sources: AFMC (2007); McArthur (1999a); OECD (2008); and Ryten et al. (1998); calculations by author.
by author.
38 FRASERINSTITUTE.ORG will be entering the workforce up to account the effects of demographic 2017.2 As figure 4 shows, if 88% of changes in the physician workforce, medical school graduates are part the consequence of which may be of Canada’s physician supply seven that, in the future, more physicians years after graduation, and if only will be required to deliver the same 97% of those admitted to medical volume of services being provided school graduate (as was the case today (see, for example, Esmail, for the class of 1989), then current 2007). Furthermore, this is only the enrollment and graduation rates number of new physicians required suggest that only 2,095 Canadian- to maintain the stock of physicians, trained students will be added to the which is clearly insufficient Canada’s physician supply in 2017. physician supply to meet current demand and will fall well short of Figure 4 also shows the number of demand in the future given that new physicians required to maintain Canada’s health needs will increase the physician-to-population ratio. as our population ages. This number exceeds the number of Canadiantrained physicians entering Making one additional assumption— the workforce every year through that the Canadian population will 2017, though this difference is small continue to increase at its average in 2017. This number of physicians growth rate since 1990 (~1.0%)— required assumes that the number allows us to estimate how the needed to replace those lost to physician-to-population ratio will death, retirement, or emigration, evolve in Canada in the coming and to keep up with population years (figure 1). Clearly, without growth is a constant 3.3% of the a significant addition of foreign- current physician population over trained doctors, the Canadian time (which is equal to the addition physician-topopulation ratio will 5 of 2,000 new physicians in 1996, the decline between now and 2017, just low-middle point in the Ryten et al. as it would have through the 1990s estimates above).3 It also assumes if foreign physicians had not been that only Canadian-trained doctors used to make up for the shortfall will be added to the physician supply caused by insufficient medical school between 2006 and 2017.4 admissions.
This replacement rate is a CONCLUSION conservative estimate: at present approximately 35.9% of Canada’s The current physician supply in physicians are aged 55 or older Canada is clearly insufficient to (CMA, 2008), which suggests that meet the demand for physician the number of physicians needed care under the present structure of to replace those who retire or Medicare,6 and falls well short (in die (900 to 1,100 doctors in the terms of the supply of physicians mid-1990s) will rise significantly relative to population) of what is in the coming years. In addition, being delivered in other developed this estimate does not take into nations that also maintain universal
CANADIAN STUDENT REVIEW WINTER 2016 39 approaches to health care insurance. graduating in 1989. All graduation and Without a significant intake of enrollment rates are from AFMC (2007). foreign physicians, the physician- 3 This replacement value is smaller than to-population ratio will fall in the the 3.5% estimate of physicians leaving coming years because there are not practice in Canada annually (not counting enough new doctors being trained the number of physicians required to in Canada. It would seem that a account for population growth) used by Tyrrell and Dauphinee (1999) to estimate government-imposed limitation changes in the physician supply. on the number of physicians being trained in Canada is a policy choice 4 This second assumption may seem that is not serving the best interests questionable since significant numbers of foreign- trained physicians have been of Canadians, be they patients in added to the Canadian workforce in need of a physician or capable order to maintain the existing physician- students who wish to become to-population ratio. However, the precise doctors but are unable to access number of foreigntrained doctors who medical training in this country. will be added in the future is difficult to estimate. This assumption does not, however, affect the conclusions of this examination. Since the main purpose of this article is to consider the Nadeem Esmail is a Senior effect controls have on the supply of Fellow of the Fraser Institute. Canadian-trained doctors, this simplifying He first joined the Fraser assumption serves to clarify the effect Institute in 2001, served as these training restrictions have on the Director of Health System future supply. Performance Studies from 2006 to 2009, and for the past 5 This decline in the ratio is seen in figure 4 three years has been a Senior as the decline in the number of physicians Fellow. Esmail completed his required to maintain the physician-to- B.A. (Honours) in Economics at the University of Calgary population ratio between 2006 and 2017. and received an M.A. in 6 Shortages can only occur when prices are Economics from the University of British Columbia. not permitted to adjust. Prices will naturally rise in any functioning market where goods or services are in short supply relative to NOTES demand, thus encouraging new supply and reducing demand simultaneously. 1 The methodology used for age-adjustment The outcome is equilibrium of supply here is that employed by Esmail and and demand (no shortage or excess). In Walker (2007). the Canadian health care marketplace, such adjustment is impossible because of 2 This estimate uses graduation rates for restrictions on both the prices and supply students awarded M.D.s between 2000 of medical services. The optimal solution and 2007 (who, between 2007 and 2014 to Canada’s shortage is obviously to will be at the same point in their careers remove restrictions on training, practice, as the students studied by Ryten et al.), and pricing, and to introduce user charges. and enrollment rates for students entering This would increase the supply of services medical school between 2004/2005 and while simultaneously encouraging more 2006/2007 who will, in general, be at informed use of medical practitioners’ time the same point in their medical careers (thus reducing the demand for treatment between 2015 and 2017 as the students overall and improving the allocation of studied by Ryten et al. were in 1996 after physician manpower and effort). Such a
40 FRASERINSTITUTE.ORG change in policy would bring Canada more in OECD Health Statistics 2015 — Frequently line with some of the world’s top-performing Requested Data. http://www.oecd.org/health/ universal access health care programs health-systems/OECD-Health-Statistics- (Esmail and Walker, 2007). Unfortunately 2015-Frequently-Requested-Data.xls, as of for Canadians, the introduction of user fees November 15, 2015. and extra billing are not permitted under the current federal legislation guiding Medicare. Or, Zeynep (2001). Exploring the Effects of The analysis here takes the current legislation Health Care on Mortality across OECD as given and discusses only the supply Countries. Labour Market and Social Policy of physicians. – Occasional Papers No. 46. OECD.
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