Health spending increasing less than inflation and population
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October 29, 2013—Canada will spend roughly $6,000 per person on health care this year. Indeed, the country’s expenses in this area are continuing to rise but at a slower pace, according to the Canadian Institute for Health Information (CIHI).
Total health spending growth has slowed each year since 2011. It is expected to rise by 2.6% in 2013—less than half the average growth of 7% per year between 2000 and 2010.
“After a period of significant growth in the last decade, we’re starting to see things slow down,” said Christopher Kuchciak, CIHI’s manager of health expenditures. “Spending continues to increase across the board, but at a slower pace than in previous years. This trend is due in large part to Canada’s modest economic growth and government efforts to balance budgets.”
CIHI’s report National Health Expenditure Trends, 1975 to 2013 is Canada’s most complete source of information on how dollars are spent on health care.
Drugs’ share of health spending declines
Canadians are expected to spend about $35 billion on medications in 2013, up 2.4% from 2012.
Over the last three years, both the public and private sectors have experienced less dramatic rates of growth in drug spending compared with the previous decade, resulting in a decline in drugs’ share of health spending. This slower pace of growth is mainly attributed to
- A decline in the number of new drugs coming onto the market;
- The impact of generic pricing; and
- Patent expirations.
The pace of growth for hospital and physician services is also slowing. In 2013, spending on hospitals is expected to reach more than $62 billion (up 2.6% from last year) while spending on physicians is forecast at $31 billion (up 3.6% from last year).
The public/private split
The public sector pays for about 70% ($148 billion) of health care in Canada. The remaining 30% ($63 billion) comes from private sources such as health insurance and individuals’ out-of-pocket expenses. This split has been fairly consistent since 1997.