New study forecasts Canadian health care spending to increase by 4% this year
Canada’s economic growth will facilitate a 4% increase in health care investment this year. That’s the findings of the Canadian Institute for Health Information (CIHI), who has forecast spending of $242 billion for 2017.
That outlay represents $6,604 for every Canadian, or 11.5% of the country’s total GDP. Such spending puts Canada at the higher end of the OECD health care expenditure tables, although some way off the world’s top spender – the United States.
“It’s interesting to see that the US spends roughly twice as much per person on healthcare versus Canada,” says Christopher Kuchciak, manager of Health Expenditures at CIHI. “Part of that is how much is paid for by government. Many of the EU countries have a higher proportion of public spend, while the US is more of a 50-50 split.”
When analysing what countries spend on healthcare, Kuchciak identifies demographics, geography and method of delivery as key factors. This goes some way to explaining disparity between the provinces, where health expenditure per person is expected to be $7,378 in Newfoundland and Labrador, $7,329 in Alberta, $6,367 in Ontario and $6,321 in British Columbia.
“We have the Canadian Health Act, but we don’t have one healthcare system,” says Kuchciak. “If you look at the Atlantic provinces, you see a higher proportion of seniors, and that can contribute to higher costs. Geography is also important; the challenges of urban delivery versus rural community care can drive variations in costs across the country.”
One constant of health care in Canada, regardless of the province, is the public-private partnership. The CIHI puts the split in spending at 70/30, with governments contributing the lion’s share. Where the money goes also varies between the two sides.
“When we talk about government funds, you are looking at physician services, doctor and hospital services for the most part,” says Kuchciak. “When you are looking at private sector spend, you are looking at things like pharmaceuticals, as well as dental care or vision care.”
This year’s expected 4% increase in health care expenditure comes as the wider economy has experienced a boost. In October, the IMF raised its forecast for Canada’s economic growth to 3% for 2017. This compares favorably to the other major industrialized nations, including the US, which has a 2.2% forecast.
Loosening the purse strings in times of plenty is common for governments, explains Kuchciak, with history providing plenty of examples.
“In the mid-‘90s, that was a period of government deficits, and a slowdown of health spending,” he says. “That was followed by the late ‘90s and the last decade with a period of reinvestment and growth rates in the 6–7% range. What we will be monitoring going forward is how sustainable are these trends.”
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That outlay represents $6,604 for every Canadian, or 11.5% of the country’s total GDP. Such spending puts Canada at the higher end of the OECD health care expenditure tables, although some way off the world’s top spender – the United States.
“It’s interesting to see that the US spends roughly twice as much per person on healthcare versus Canada,” says Christopher Kuchciak, manager of Health Expenditures at CIHI. “Part of that is how much is paid for by government. Many of the EU countries have a higher proportion of public spend, while the US is more of a 50-50 split.”
When analysing what countries spend on healthcare, Kuchciak identifies demographics, geography and method of delivery as key factors. This goes some way to explaining disparity between the provinces, where health expenditure per person is expected to be $7,378 in Newfoundland and Labrador, $7,329 in Alberta, $6,367 in Ontario and $6,321 in British Columbia.
“We have the Canadian Health Act, but we don’t have one healthcare system,” says Kuchciak. “If you look at the Atlantic provinces, you see a higher proportion of seniors, and that can contribute to higher costs. Geography is also important; the challenges of urban delivery versus rural community care can drive variations in costs across the country.”
One constant of health care in Canada, regardless of the province, is the public-private partnership. The CIHI puts the split in spending at 70/30, with governments contributing the lion’s share. Where the money goes also varies between the two sides.
“When we talk about government funds, you are looking at physician services, doctor and hospital services for the most part,” says Kuchciak. “When you are looking at private sector spend, you are looking at things like pharmaceuticals, as well as dental care or vision care.”
This year’s expected 4% increase in health care expenditure comes as the wider economy has experienced a boost. In October, the IMF raised its forecast for Canada’s economic growth to 3% for 2017. This compares favorably to the other major industrialized nations, including the US, which has a 2.2% forecast.
Loosening the purse strings in times of plenty is common for governments, explains Kuchciak, with history providing plenty of examples.
“In the mid-‘90s, that was a period of government deficits, and a slowdown of health spending,” he says. “That was followed by the late ‘90s and the last decade with a period of reinvestment and growth rates in the 6–7% range. What we will be monitoring going forward is how sustainable are these trends.”
Related stories:
Healthcare expenditures exceeding economic growth, says report
PEI is the last Atlantic province standing in healthcare negotiations
