Health spending will tick up again in 2015, as it has every year since 1975, but the rise in spending will be modest, according to a new report by the Canadian Institute for Health Information.
Health spending is projected to grow by $3.4 billion this year, reaching $219.1 billion, says. That amounts to $6,105 per Canadian -- about $35 more per person than last year.
That is a slow increase, says CIHI, which is a not-for-profit, independent organization that collects and analyzes information on health care in Canada.
Health care spending is likely to grow by less than the rate of inflation and population growth combined.
While health care dollars are spent on many things, the three biggest costs are:
- hospital spending, which accounts for almost 30 per cent of spending
- medications, which accounts for almost 16 per cent of spending
- physician costs, which is responsible for 15.5 per cent of costs
Hospital spending has grown slowly since the late 1990s. Medication spending has also slowed – in part because of generic pricing control policies, expiring patents, and fewer new drugs emerging on the market. But CIHI warns that the slowdown in medication spending is likely temporary and that expensive new drugs will likely begin to appear again.
Physician spending growth has outpaced other areas of spending since 2007, due in part to surges in the supply of physicians.
In terms of footing the bill, approximately 71 per cent of health spending in 2015 will come from public-sector funding -- almost all of it from provincial and territorial governments.
The other 29 per cent will come from private spending: 12 per cent from private insurance; 14 per cent from out of pocket expenses for patients; and 3 per cent from other sources.
The public sector share of health spending has remained relatively stable since 1997, at approximately 70 per cent. But out-of-pocket health costs per person have increased -- from $278 in 1988 to $844 in 2013. That’s an approximately 4.5 per cent annual growth rate.
