Healthcare as an Emerging Practice


By Bonnie Robinson

Few would argue that Canada’s healthcare system is under strain. The country’s population is aging and healthcare costs are climbing. Increasingly, actuaries are playing a role in ensuring the sustainability of Canadian healthcare.

"If you look at healthcare in general, it is being consumed, but never monitored from an actuarial perspective," says Pierre-Yves Julien, president and CEO of Medavie Blue Cross and Chair of the CIA’s Health Committee. "People are making decisions that have long-term implications without much concern about sustainability. There is a skill set that actuaries could bring to bear on decisions regarding healthcare. We can make sure that when healthcare is debated, the opinion of actuaries can be sought to bring facts to impressions."

The crucial role that actuaries can play in this discussion was the focus of a recent CIA advertising campaignThe campaign delivered over 8.3 million impressions through print, TV, and digital advertisements in the The Globe and Mail, La Presse, The Hill Times, Policy Options, iPoliticsCBC News Network, and CBC RDI. The social media portion of the campaign delivered almost half a million impressions on Facebook, LinkedIn, and Twitter. "This integrated campaign really delivered on its objective of raising awareness of the CIA and the role actuaries can play when it comes to healthcare," says Jacques Leduc, CIA director of operations, finance, and administration.

Actuarial Approaches in Healthcare

Ella Young, corporate director, enterprise risk management and director, care continuum and actuarial analytics at Vancouver Coastal Health and a member of the Health Committee was also asked for comment. "There’s a lot of opportunity for actuaries in healthcare, particularly in terms of good predictive modelling work," she says, "so that the system has a better chance of getting on top of expected-to-be high-risk people."

She says that salary is one of the challenges of getting actuaries involved in healthcare, but in addition, "access to identifiable healthcare data is difficult, even for those of us in the system. Healthcare is cautious and protective of individuals’ privacy." Because actuaries are not present in the healthcare field, the public sector has come to rely on certain other expertise, including health economists, statisticians, epidemiologists, and so on.

"Many claim to be doing predictive modelling," Ms. Young adds. "Whether they are or not depends on how you define it. In the absence of an agreed definition, it is difficult to compare." She has found that most senior executives are not aware of this, and that the predictive models their staff present may not be very predictive. "At the end of the day, if this predictive model hasn’t answered questions or performed well, people are left with the impression that predictive modelling isn’t useful, so it’s getting a bad name, which could reflect negatively on actuaries."

For several years, Ms. Young has been fortunate to work with a few senior executives who understood that the models they were receiving were not adequate. "The data store on which I have been able to build models has enabled an accuracy beyond what is in the published literature," she says. Ms. Young has also made a point of liaising with patient groups who have reached an end state where they don’t want to be, where a patient’s life is simply medical appointments and taking pills. "We focus on that, and working with the provider to try to help people not get there, and hopefully there is a cost-benefit as well."

Chicken and Egg Situation?

"Healthcare is a unique animal," she adds. "It is difficult for those who aren’t in it and/or don’t understand it, to add value, which is the case with many consultants. If we get to a point where privacy and other related issues can be satisfied reasonably, that might change."

"Actuaries need to clearly articulate a value proposition that others aren’t doing," she says. "They need to differentiate their skill set. Without the right data, it can’t be done."

CIA Research Papers

The CIA has sponsored a number of research papers that focus on Canadian healthcare, including Sustainability of the Health Care System and Impact of the 2014 Revision to the Canada Health Transfer (co-published with the Society of Actuaries), Modelling New Brunswick’s Future Healthcare Expenses and Resource Needs, and Extended Healthcare and Dental Experience: A Report on a Post-employment Benefits Experience Study. Recently, the Institute published a Public Position on a National Pharmacare Plan (NPP) that called for, among other things, actuarial involvement in understanding cost and funding implications, and broader, comprehensive analysis and assessment of the future cost and design of Canadian healthcare.

"The National Pharmacare Plan public position was a long process to develop because at times people on the [Health] committee wanted to include an opinion on the merit or not of a particular option," says M. Julien. "It was important for the document not to have an opinion, but to help others form an opinion—to provide a framework for decisions rather than an opinion on a particular solution." Julien thinks that in the end, the committee produced a document that "is in the public interest and not an opinion on how to take a course of action. It helps position the Institute externally but still have the support of members."

Health Committee Future Work

M. Julien adds that the work of the Health Committee is far from over. In March, the group began the next stage of work related to pharmacare: looking at the existing pharmacare studies used to develop the NPP position paper. "We want to analyse which elements have been utilized, and which have been overlooked in those studies," M. Julien says. This work will allow the committee to determine if there is data for missing elements, and direct the Research Committee to try to find it.

Also on the horizon is the publication of a research project that involves the development of a resource model for the projection of long-term employer-sponsored healthcare plan cost trends. Actuaries could use the model as a resource for the estimation of reportable liabilities for Canadian retiree healthcare benefits and other post-employment benefits as required under accounting standards.

M. Julien advocates a practical, careful approach to actuarial expansion into other fields, particularly healthcare. "If we want to be in other fields, we still have work to do to ensure we are able to apply the skill set," he says. "Finding data is still part of the journey we want to be on. We are only at the beginning of that journey; within three-to-four years we will have the basic elements to be ready when people do come to actuaries for help." 

Bonnie Robinson is the English editor at the CIA Head Office.

Canadian Institute of Actuaries/Institut canadien des actuaires