Canadian healthcare spending slows

Figures released by the Canadian Institute for Health Information (CIHI) show that the pace of growth in Canadian healthcare spending is slowing.

The CIHI report, National Health Expenditure Trends, 1975 to 2012, indicates that total healthcare spending in Canada is expected to reach $207 billion in 2012, averaging $5,948 per person. Hospitals (29.2%), drugs (15.9%) and physician services (14.4%) continue to account for the largest shares of that spending. But growth rates for each of those spending categories are shrinking. In 2012, hospital spending in Canada will grow by 3.1%, while payments to physicians will increase by 3.6%. These will be the lowest rates of growth since the late 1990s. Additionally, the growth rate for drug spending will fall to 3.3% in 2012, which is down from 4% last year and continues a 10-year downward trend for drug spending rates.

Overall, the proportion of Canada’s gross domestic product spent on healthcare will reach 11.6% this year—down from 11.7% in 2011 and the all-time high of 11.9% in 2010.

“Provincial and territorial governments today are focused on controlling healthcare costs,” said John Wright, CIHI president and CEO. “Unlike in the past, they’re not cutting programs as much as looking at improving productivity, reducing overhead, controlling compensation and seeking value-for-money initiatives.”

Provincial and territorial governments are forecast to spend $135 billion in 2012, accounting for 65% of Canada’s total health expenditure. Spending per person is expected to be highest in Newfoundland and Labrador and Alberta, at $5,190 and $4,606, respectively. Quebec and British Columbia are expected to have the lowest health expenditure per capita, at $3,513 and $3,690, respectively.

Other highlights

  • Health system decision-makers will face the challenge of finding appropriate care for older Canadians that balances access, quality and appropriateness of care on the one hand and cost on the other. In 2010, the latest available year for data broken down by age group, per capita spending for seniors increased with age: $6,223 for those ages 65 to 69; $8,721 for those 70 to 74; $12,050 for those 75 to 79; and $20,113 for those 80 and older.
  • For more than a decade, the public sector has accounted for about 70% of the total healthcare bill and the private sector for 30%.
  • Among 30 countries in the Organisation for Economic Co-operation and Development (OECD) that had comparable accounting systems in 2010, the latest year for which data is available, spending per person on healthcare remained highest in the United States (US$8,233). Canada was in the top quartile of countries in terms of per person spending on health, spending US$4,445; this amount was similar to those for several other OECD countries, including Denmark (US$4,464), Austria (US$4,395) and Germany (US$4,338).