Health spending to reach $192 billion in 2010: report
The Canadian Press
Published Thursday, October 28, 2010 11:46AM EDT
TORONTO - Total health-care spending in Canada this year is predicted to reach almost $192 billion, up almost five per cent over 2009, says a report by the Canadian Institute for Health Information.
The 155-page report, released Thursday, says that figure translates into about $5,600 for each man, woman and child in the country.
"Over the last 10 years, we've seen the growth in health-care spending over and above population growth and inflation," said Chris Kuchciak, manager of health expenditures for CIHI. "However, what's different this year is that the growth rate in 2009 and 2010 seems to be decelerating."
Taking inflation and population growth into account, actual per-capita health-care spending is expected to rise by just 1.4 per cent this year, Kuchciak said from Ottawa.
"The growth rate of 1.4 per cent is actually the lowest growth rate in the last 13 years."
Kuchciak said a number of factors are likely behind the shrinking growth rate in health spending, including belt-tightening by provinces in response to the 2009 recession.
A similar squeeze on spending occurred during the mid-1990s, a period of restraint when the growth in health spending was either flat or negative, he said, noting that the trend was reversed in the late '90s when governments made a concerted effort to boost allocations to health.
"So there were significant investments in health care. But now fiscal positions have changed and we see that growth rate decelerating."
Robert Evans, an economist in the Centre for Health Services and Policy Research at the University of British Columbia, said the turn-around in what was quite rapid growth in per-capita health spending is good news.
"It's slowed way back down," Evans said from Vancouver. "And that's not terribly surprising because we've seen this in the past, where we have had relatively rapid periods of escalation and then you get into a fiscal crisis and provincial governments get themselves organized and start putting on the clamps."
"And that's what seems to be happening."
The report shows health-care spending is expected to account for 11.7 per cent of Canada's gross domestic product in 2010, down from 11.9 per cent in 2009, but above the 10.7 per cent share of the GDP in 2008.
Kuchciak said hospitals, prescription and over-the-counter drugs, and doctors' services remain the three biggest-ticket items.
Spending on hospitals is expected to reach $55.3 billion for 2010, up about six per cent over last year; drugs are predicted to account for an estimated $31.1 billion, a rise of almost five per cent over 2009; and spending on physicians is tagged at $26.3 billion, nearly seven per cent more than last year.
At 29 per cent, hospitals still account for the biggest slice of the health-care spending pie, said Kuchciak. "That's actually declined over the years. Twenty-five, 30 years ago, hospitals accounted for over 40 per cent of health-care spending."
"What we've seen over time is a growth in the share attributable to drug spending -- that's been growing -- but also in the last four years, physician spending has actually outpaced the growth of drugs and hospitals."
This year, drug costs are expected to carve out 16 per cent of health-care spending, while physician services are predicted to take up almost 14 per cent.
"Yes, physician spending has grown faster than the other two categories," Kuchciak said. "We know there are more physicians today than there were years ago. There's more demand for the use of physician services as well as compensation."
"Those are factors that could play into that increase in spending."
The report also says governments' share of health-care spending this year is expected to reach $135.1 billion, while private-sector spending -- which includes both private insurance and out-of-pocket expenses -- will reach an estimated $56.6 billion.
For more than a decade, public- and private-sector health spending in Canada has been growing at about the same rate, with the public sector accounting for about 70 per cent of the total health-care bill and the private sector for the rest.
While Canadians over age 65 account for less than 14 per cent of Canada's population, CIHI found they consume almost 44 per cent of all health-care dollars spent by provincial and territorial governments. In 2008, the latest year for which data is available, the provinces and territories spent an average of $10,742 per senior, compared with $2,097 on those aged one to 64 years old.
For Canadians age 80 and older, health spending averaged $18,160 per person, more than three times the roughly $5,800 spent per senior under age 70.
However, the report shows that the share spent on those 65-plus has not changed significantly over the past decade.
"While it is true that care is costlier for people who are 65 and older, we have not seen a rise in the proportion we spend on seniors," said Jean-Marie Berthelot, CIHI vice-president of programs. "An aging population may have an impact on health-care spending, but so far the average expenditure on seniors has not risen faster than for younger Canadians."
Evans said he is puzzled by the finding that the proportion of health dollars spent on seniors has not grown appreciably, since that sector of the population is certainly increasing in size relative to that of other age groups.
While many have referred to Canada's aging population as a "grey tsunami," Evans argues the phenomenon is more like a grey glacier -- slow-moving but powerful enough to remake the health-care landscape.
"Although I'm saying that a glacier is not a tsunami, it is going on," he emphasized. "And over 10 years, there certainly should be an increase in the proportion spent on elderly people because they do make up a higher proportion of the population."
"And also we know the utilization rates (of health services) are rising faster among seniors than among the rest of the population."