Canada's health bill -- 148,000,000,000 dollars: Spending rate hits 31-year high

Meagan Fitzpatrick, CanWest News Service

OTTAWA - What's your health worth? According to the annual report on national health expenditures by the Canadian Institute for Health Information, the answer $4,548.

That's what per capita spending in Canada is expected to reach by the end of 2006, according to the report released Tuesday.

The CIHI forecasts the grand total of health-care spending will be $148 billion this year -- up about $8 billion from 2005 -- and will represent 10.3 per cent of Canada's gross domestic product.

That figure marks the highest level seen in 31 years.

The increase translates into a growth rate of 5.8 per cent, slightly lower than the estimated annual growth rate of 6.4 per cent in 2005.

Still, it's the 10th consecutive year where health-care spending is set to outpace inflation and population growth, the study found.

"This sustained period of growth may be due, in part, to new public money flowing into health-care delivery from federal-provincial accords," said Graham Scott, chairman of the CIHI's board of directors, in a release.

"However, while health-care spending continues to grow, it now appears to be growing at a slightly slower rate."

Sharon Sholzberg-Gray, president and CEO of the Canadian Healthcare Association, said the report should give a boost to Canadians' confidence in the health-care system.

"What it tells us is that the health system is sustainable," she said.

"It tells us that our spending is not out of control compared to growth in GDP, it's not out of control compared to other countries, but certainly we want to make sure that we get value for money and that we run as efficient and effective a system as we can," she said.

Sholzberg-Gray was also happy to see more re-investment in public-sector health care after years of decline in the 1990s, but said there is still much work to be done to play catch-up.

Wait times and access to services are areas that need to be targeted and Sholzberg-Gray would also like to see a focus on a national pharmaceutical strategy to combat the rising cost of drugs.

In addition to the total price tag for health care, the CIHI examined what governments and Canadians are spending, what and who the dollars are being spent on, and how Canada compares with other countries.

The public- and private-sector shares of total health care spending have remained fairly stable over the past decade at a 70/30 ratio, but for the first time in three years, public-sector spending is expected to grow slightly faster than the private sector.

Private-sector spending is mostly insurance and out-of-pocket expenditures.

Public-sector spending is expected to reach $104 billion this year, while private-sector spending will total an estimated $44 billion.

Health care is most costly at the beginning and the end of life, the report showed.

"One of the consistent long-term trends is that we spend most of our health-care dollars on the very young and the very old. This is a trend that has become consistent over time," Scott told a reception in Ottawa where the report was released.

"What is perhaps more interesting, is that the portion we spend on seniors has remained relatively stable over the last few years ... this is despite the fact that as we all know, the number of seniors has radically increased."

In 2004, the most recent year for which data are available, provincial and territorial governments spent $7,565 on every person under the age of one and $8,969 on those aged 65 and over.

Seniors consumed more than 45 per cent of all provincial government health spending, while comprising 13 per cent of the population, the study said.

Hospitals take up the biggest piece of the spending pie, followed by drugs -- prescribed and non-prescribed medication -- and then physicians.

Hospital expenditures as a share of total health spending have decreased over the last 30 years, the report noted, and drugs are taking up a bigger share.

Compared to other countries, Canada is among the top spenders in the world, the CIHI said.

The most recent data from 2004 ranked Canada fifth for per capita spending among 21 countries in the Organization for Economic Co-operation and Development, behind the United States, Luxembourg, Switzerland, and Norway.

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