Health spending is projected to be $214.9 billion in 2014, continuing a modest growth trend
This chapter examines health care spending trends and economic growth patterns. The forecast for 2014 health spending is $214.9 billion, or $6,045 per person.
- Total health spending is expected to increase by 2.1% this year—low in comparison to the average annual increase of 7% from 2000 to 2010.
- After accounting for inflation and for population changes, health spending is expected to decrease by 0.8% in 2014.
- Overall, health expenditure is expected to represent 11% of Canada’s gross domestic product (GDP) in 2014, a share that has fallen gradually in the past few years—down from an all-time high of 11.6% in 2010.
The health spending split between public and private sectors unchanged for more than a decade
This chapter explores the sources of finance and the distribution of expenditure for different aspects of health care spending.
- At the pan-Canadian level, hospitals and physicians were financed mainly by the public sector, while drugs and other professionals were financed primarily by the private sector.
- Since 1997, the public-sector share of total health expenditure has remained relatively stable at around 70%. In 2012, the public sector spent $145.1 billion on health care, accounting for 70.6% of total health expenditure. The public-sector share is forecast at $148.6 billion for 2013 and $151.5 billion for 2014, accounting for 70.6% and 70.5% of total health spending, respectively.
- In 2012, the private sector spent $60.3 billion on health care. Annual growth rates are forecast to be 2.5% and 2.6% in 2013 and 2014, respectively. Both are higher than public-sector annual growth rates, which are forecast at 2.4% and 2.0%, respectively.
Slower growth in spending on hospitals, drugs and physician services
Health dollars are used to purchase health care goods and services, to provide capital investment, to administer public and private insurance plans as well as public-sector health programs, and to fund research. The 3 largest components of health care spending are hospitals, drugs and physician services, representing more than 60% of total health expenditure. This chapter examines where health expenditure dollars are spent in Canada.
- In 2014, spending on hospitals—the largest component of health care spending—is forecast to have grown by 2.1% from 2013 to reach $63.5 billion, reflecting 29.6% of total health expenditure. This is the lowest rate of growth since the late 1990s.
- Spending on drugs, the second-largest category, is forecast to have grown by 0.8% from 2013 to reach $33.9 billion in 2014. This is the slowest-growing category among the 3 largest categories of health expenditure.
- During the same period, spending on physicians is forecast to have increased by 4.5%, reaching $33.3 billion, which represents 15.5% of total health care spending. This is the second-lowest rate of growth since the late 1990s, down from 4.9% last year.
Variations in provincial/territorial spending on health
This chapter examines how much the provinces and territories spend on health care and the variations across the jurisdictions.
- In 2014, Newfoundland and Labrador and Alberta are forecast to have spent more per person on health care than the other provinces, at $6,953 and $6,783, respectively.
- Quebec and British Columbia are forecast to have the lowest health expenditure per capita in 2014, at $5,616 and $5,865, respectively.
- In 2014, total health expenditure as a percentage of provincial GDP is forecast to range from 8.0% in Alberta to 16.3% in Prince Edward Island. For the territories, the health expenditure–to-territorial GDP ratio is forecast at 19.4% for Nunavut, 12.7% for Yukon and 10.3% for the Northwest Territories.
Health spending highest on seniors and infants
Spending on health care varies by age group and sex. Similar to previous years, per capita health care spending by provincial and territorial governments was highest for seniors and infants. This chapter examines provincial and territorial government health expenditure, after adjusting for population age and sex profiles.
- In 2012, the latest available year for data broken down by age group, Canadians younger than age 1 cost the health care system an estimated $10,487 per person, whereas those 80 and older cost $21,054 per person.
- Alberta and the territories have lower-than-average percentages of their populations older than 65, which accounts for their increases in per capita expenditure when standardized to the national population. Ontario shows little difference between actual and standardized expenditure, due to its large share of the total population.
Health spending as a share of total program spending stable on average since 2005
This chapter explores the relationship between the provincial/territorial government fiscal position (as expressed by the level of revenues) and its health expenditures.
- Around 40% of total provincial/territorial government program expenditures were allocated to health care in 2013.
- Provincial and territorial government health expenditures are forecast to reach $140.8 billion in 2014.
Health spending slows in Canada and other OECD countries
This chapter compares health care spending in Canada with that in other OECD countries in 2012, both on a per capita basis and in relation to GDP. It discusses the mix between public and private funding and looks at 3 major types of services and goods (hospital services, drugs, physicians’ services).
- In 2012, Canada was among the top quartile of spenders in the OECD with regard to total health expenditure per capita.
- The public-sector share of total health expenditure in Canada (70.1%) was below the OECD average (73.3%).
- In per capita terms, Canada was among the top spenders for drugs (US$771) and physicians’ services (US$684), and near the OECD average for hospital services (US$1,310).