What are the current trends in hospital spending?

Slower growth in hospital expenditures since 2010

Year Average annual growth/annual growth
2003-2004 to 2010-2011 6.4%
2011-2012 4.2%
2012-2013 3.5%
2013-2014 2.8%
2014-2015 2.9

Note: Total net expenses (hospital expenses net of recoveries) for 2003–2004 to 2014–2015 in Canada (excluding Quebec and Nunavut). Source: Canadian MIS Database, Canadian Institute for Health Information.

Note
Total net expenses (hospital expenses net of recoveries), 2003–2004 to 2014–2015, Canada (excluding Quebec and Nunavut).

Source
Canadian MIS Database, Canadian Institute for Health Information.

 

Highlights

  • Hospital spending accounts for the largest share of total health spending by the public sector, at a forecast 37.7% in 2016.
  • As public facilities, hospitals have no profit motive. Instead they attempt to maximize health care delivery within their funding envelope. During the current period of fiscal restraint, growth in hospital funding has slowed and institutions have had to reduce the growth in their expenditures accordingly.
  • Hospitals have responded by changing how they deliver care. Less-complex cases that were once treated in hospital are increasingly treated on an outpatient basis, leading to an increase in the complexity of both inpatients and outpatients. Over time, this has led to a large overall increase in ambulatory and community visits, while inpatient activity has seen only modest growth.
  • Compensation is a significant cost driver, accounting for more than 60% of hospital budgets. Hospitals have had to manage the growth in health personnel and wage rates, as the demand for services continues to rise.