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National Health

Expenditure Trends

1975 to 2019

Production of this document is made possible by financial contributions from

Health Canada and

provincial and territorial governments. The views expressed herein do not necessarily represent the views of Health Canada or any provincial or territorial government. Unless otherwise indicated, this product uses data provided by Canada's provinces and territories.

All rights reserved.

The contents of this publication may be reproduced unaltered, in whole or in part and by any means, solely for non-commercial purposes, provided that the

Canadian

Institute for Health Information is properly and fully acknowledged as the copyright owner. Any reproduction or use of this publication or its contents for any commercial purpose requires the prior written authorization of the Canadian Institute for Health Information. Reproduction or use that suggests endorsement by, or affiliation with, the Canadian Institute for Health Information is prohibited. For permission or information, please contact CIHI:

Canadian Institute for Health Information

495 Richmond Road, Suite 600

Ottawa, Ontario K2A 4H6

Phone: 613-241-7860

Fax: 613-241-8120

cihi.ca copyright@cihi.ca

ISBN 978-1-77109-869-4 (PDF)

© 2019 Canadian Institute for Health Information

How to cite this document:

Canadian Institute for Health Information. National Health Expenditure Trends,

1975 to 2019. Ottawa, ON: CIHI; 2019.

Cette publication est aussi disponible en français sous le titre Tendances des dépenses nationales de santé, 1975 à 2019.

ISBN 978-1-77109-870-0 (PDF)

Table of contents

About this report ...........................................................5

Overview of health spending in

Canada ..........................................6 International comparisons ...................................................10 ....................................12

Health expenditure by use of

funds ............................................16 Health expenditure in the provinces and territories ................................19 Analysis .................................................................24

Appendix A: Health expenditure data

in brief .....................................33 References ..............................................................45 4

National Health Expenditure Trends, 1975 to 2019

Key findings

National Health Expenditure Trends, 1975 to 2019 — the Canadian Institute for Health Information's 23rd annual health expenditure trends publication — provides detailed, updated information on health expenditure in Canada. Total health expenditure is expected to reach $264.4 billion or $7,068 per Canadian in 2019
It is anticipated that, overall, health expenditure will represent 11.6% of Canada's gross domestic product in 2019. In 2019, total health expenditure is expected to rise by 3.9%, a slight increase in the rate of growth compared with earlier in the decade Between 2014 and 2019, health spending per capita is estimated to increase in real the prospects of higher government revenues in the next few years, which may lead to sustained health spending increases in the near future.

Provincial per capita health expenditures vary

In 2019, total health expenditure per capita is expected to range, for example, from $8,190 in Newfoundland and Labrador to $6,953 in

Ontario and $6,548 in

British Columbia.

Physician expenditure growth fastest among 3 largest health spending categories Hospitals (26.6%), Drugs (15.3%) and Physicians (15.1%) are expected to continue to account for the largest shares of health dollars (close to 60% of total health spending) in 2019. Physician expenditures are expected to grow by an estimated 4.4% in 2019.

Spending on hospitals

in 2019 is estimated to grow by 3.0%, while drug spending growth is forecast at 2.7%. Canada's per capita health care spending among the highest internationally Among 36 countries in the Organisation for Economic Co-operation and Development (OECD) in 2018, the latest year for which comparable data is available, spending per person on health care remained highest in the United States (CA$13,722). Canada's per capita spending on health care was among the highest internationally, at CA$6,448 — less than in the Netherlands (CA$6,855) and Australia (CA$6,488), and more than in France (CA$6,436) and the United Kingdom (CA$5,275). 5

National Health Expenditure Trends, 1975 to 2019

About this report

National Health Expenditure Trends, 1975 to 2019 provides an overview of how much is spent on health care annually, in what areas money is spent and on whom, and where the money comes from. It features comparative expenditure data at the provincial/territorial and international levels, as well as Canadian health spending trends from 1975 to the present. Companion products to the National Health Expenditure Trends, 1975 to 2019 report are available on

CIHI's website at www.cihi.ca/en/nhex:

National Health Expenditure Trends, 1975 to 2019

- Data Tables (.xlsx)

National Health Expenditure Trends, 1975 to 2019

- Methodology Notes (.pdf)

National Health Expenditure Trends, 1975 to 2019

- Infographics (.pptx) Health Expenditures in the Provinces and Territories - Provincial and Territorial (.pptx) (.pptx) How Canada Compares Internationally: A Health Spending Perspective (.pptx) components may not add to the total. Please send feedback and questions to the National Health Expenditure Database (NHEX) team at nhex@cihi.ca. The Canadian Institute for Health Information (CIHI) expresses its gratitude to the National Health Expenditure Expert Advisory Group for its advice and constructive comments related to national health expenditures: Richard Plain, PhD, University of Alberta (retired)

Hu Lu, PhD, Health Canada

Claudia Sanmartin, PhD, Statistics Canada

Jeremiah Hurley, PhD, McMaster University

Martin Demers, ministère de la Santé et des Services sociaux du Québec

Livio Di Matteo, PhD, Lakehead University

Colin Busby, Research Director, Institute for Research on Public Policy Kimberlyn McGrail, PhD, University of British Columbia Michael Hunt, Director, Spending, Primary Care and Strategic Initiatives, CIHI

Brent Diverty, Vice President, Programs, CIHI

6

National Health Expenditure Trends, 1975 to 2019

Overview of health spending

in

Canada

Total health expenditure is expected to

amount to $7,068 per Canadian in 2019 Health spending in Canada is projected to reach $264.4 billion in 2019, representing 11.6% of Canada's gross domestic product (GDP). This amounts to $7,068 per Canadian. Total health expenditure growth in 2019 is forecast to be 3.9% (Figure 1). Figure 1 How much will we spend on health in 2019? 1975

100 billion

$264.4 billion $7,068 per person 11.6% of GDPgrowth 3.9

200 billion

CurrentConstant ($ 1997)Forecast

Source

National Health Expenditure Database, Canadian Institute for Health Information. 7

National Health Expenditure Trends, 1975 to 2019

Preliminary estimates for 2018 and 2019

NHEX contains actual expenditures from 1975 to 2017. To improve the timeliness of the data, health expenditures are forecast for the latest 2 years, 2018 and 2019, so that a time series is available up to the current year. Provincial/territorial government-sector health spending forecasts are based on the Main Estimates and budgets published earlier in the year and are reviewed by the jurisdictions prior to publication. Forecasts for the private sector are based on an econometric analysis of time series trends.* In the National Health Expenditure Trends report, preliminary estimates for 2018 and 2019 are identified in the data tables by the letter "f." These preliminary estimates are subject to revision when actual data becomes available in subsequent years. Therefore, users should exercise caution when interpreting trends. For quality assurance, monitoring of the performance of forecasts is done annually. One component of this analysis is a comparison of preliminary estimates with actuals when the data becomes available. For example, for the 2016 data year, actual provincial/territorial government health expenditures in Canada were 0.7% higher than the 1-year-ahead preliminary estimate and 1.9% higher than the 2-year-ahead preliminary estimate. A recent report by the C.D. Howe Institute found that "over the NHEX reports' 20-year history, the later numbers on average have shown provincial and territorial health expenses growing 0.8 percent annually faster than the preliminary estimates."

1 (p. 2)

Note * See the Methodology Notes for more information.

Health as a share of GDP has trended upward

It is anticipated that, overall, health expenditure will represent 11.6% of Canada"s GDP in

2019. The trend over the last 40+ years shows that when there is more economic growth,

there is more health care spending. 8

National Health Expenditure Trends, 1975 to 2019

Figure 2 Total health expenditure as a percentage of GDP, Canada,

1975 to 2019

Y ear A ctualForecast

6%7%8%9%10%11%12%

S hare of GDP Note

Source

National Health Expenditure Database, Canadian Institute for Health Information.

1975 to early 1990s: Health expenditure grew during this period. Total health expenditure

the ratio of total health expenditure to GDP increased sharply, from 6.8% in 1979 to 8.1% 1992
(Figure 2).

Mid-1990s:

slowly than GDP between 1993 and 1997. Consequently, the health-to-GDP ratio fell each year in that period, reaching 8.7% in 1997. Late 1990s to 2010: Major investments were made in health care. Health expenditure grew faster than or close to GDP from 1998 to 2010, with the result that the health-to-GDP ratio trended upward. It peaked at 11.6% in 2010.

2010 to 2014: Following the 2009 recession, governments focused on restraining program

the growth in the overall economy. As a result, the health-to-GDP ratio fell to 10.9% in 2014.

2014 to 2019: This has been a period of emerging growth. The health-to-GDP ratio is

estimated to be

11.6% in 2019.

9

National Health Expenditure Trends, 1975 to 2019

Total health expenditure in 2019 is expected

to rise by 3.9%, a slight increase in the rate of growth compared with earlier in the decade Between 2010 and 2014, health spending per capita decreased, in real terms, similar to the experience during the mid-1990s (Figure 3). This was mainly due to Canada's modest Since 2014, health spending per capita has increased in real terms by an average of 1.4% per year. Figure 3 Total health expenditure per capita, annual growth rates after inflation,* Canada, 1976 to 2019 Y ear Ac tualForecastAAG -2%0%2%4%6%8%10%

Growth rate

AAG rate,

1975 to 1991

= 2.7%AAG rate,

1996 to 2010

= 3.3% AAG rate,

1991 to 1996

= -0.5%AAG rate,

2010 to 2014

= 0.0%AAG rate,

2014 to 2019

= 1.4% Notes * Calculated using constant 1997 dollars.

AAG: Average annual growth.

Source

National Health Expenditure Database, Canadian Institute for Health Information. 10

National Health Expenditure Trends, 1975 to 2019

1975 to 1991: This was a period of sustained growth in health spending. The average

annual growth rate was 2.7%, with a spike of spending growth in the early 1980s. Mid-1990s: Total health expenditure declined by an annual average rate of 0.5% during this Late 1990s to 2010: This period of reinvestment in health care saw health spending increase by an average rate of 3.3% per year.

2010 to 2014:

an annual average rate of 0.01%.

2014 to 2019: This has been a period of emerging growth, and health spending per capita

is estimated to increase in real terms by an average of 1.4% per year.

International comparisons

Canada is among the highest spenders in

the OECD Among 36 Organisation for Economic Co-operation and Development (OECD) countries in

2018, the latest year for which comparable data is available, spending per person on health

care remained highest in the United States (CA$13,722). Canada's per capita spending on health care was among the highest internationally, at CA$6,448

— less than in the

Netherlands (CA$6,855) and Australia (CA$6,488), and more than in France (CA$6,436) and the United Kingdom (CA$5,275). Although Canada is above the OECD average in terms of per-person spending on health care, the public-sector share of total health expenditure is below the OECD average (Figure 4).

i. Total health expenditure in National Health Expenditure Trends reports includes capital expenditures as well as expenditures

health expenditure for Canada in OECD reports, which excludes these expenditures, as well as expenditures for social

services and pastoral care in hospitals. ii.

measured (FISIM). Statistics Canada removed the FISIM from the GDP estimate provided to the OECD. In addition, there is

a time lag between both Statistics Canada's revision of the Canadian GDP and CIHI's revision of national health expenditure

data and its publication in OECD reports. 11

National Health Expenditure Trends, 1975 to 2019

Figure 4 How does Canada's health spending compare?

Per person

($CA)

Public

Private

2018
(year of most recent available data) $5,175

8.8% of GDP

OECD average $6,488

9.3% of GDP

Australia

$5,275

9.8% of GDP

United Kingdom

$6,448

10.7% of GDP

Canada

$7,061

11.0% of GDP

Sweden

6 ,436

11.2% of GDP

France

$7,760

11.2% of GDP

Germany

$6,855

9.9% of GDP

Netherlands

$5,085

9.3% of GDP

New Zealand

$13,722

United States*

16.9% of GDP

49%51%84%16%83%17%

84%
16%

70%30%82%18%

69%31%77%23%

73%27%

79%21%

Notes

For the United States, the public- and private-sector shares are for 2017, and the public-sector share of total health spending

excludes compulsory private insurance expenditures.

The public-sector share of total health spending is the sum of expenditures for government schemes and compulsory

health insurance.

Total current expenditure (capital excluded). Expenditure data is based on the System of Health Accounts.

Source

Organisation for Economic Co-operation and Development. OECD Health Statistics 2019. 2019. 12

National Health Expenditure Trends, 1975 to 2019

Total health expenditure by source

of finance

About 70% of total health expenditure in 2019

will come from public-sector funding includes payments by governments at the federal, provincial/territorial and municipal levels and by workers' compensation boards and other social security schemes. Private-sector Provincial and territorial government spending on health is expected to account for

65.1% of total health expenditure in 2019.

Another 5.3% will come from other parts of the

public sector: federal direct government, municipal government and social security funds. Since 1997, the public-sector share of total health expenditure has remained relatively stable at around 70%.

iii. National health expenditures are reported based on the principle of responsibility for payment rather than on the original

source of the funds. It is for this reason that federal health transfers to the provinces/territories are included within the

provincial government sector, since it is the responsibility of provincial/territorial governments to expend federal transfers

on health services. 13

National Health Expenditure Trends, 1975 to 2019

It is estimated that private-sector spending

will account for 30% of total health expenditure in

2019. The private sector is made up of 3 spending categories, the largest of which is

expected to be out-of-pocket spending (14.4%), followed by private health insurance (12.3%) and non-consumption (2.9%) (Figure 5).

Figure 5 Who is paying for these services?

The public-private split has been

fairly consistent since the early 2000s.

20002005

201020172019

Forecastedfor

70%30%30%

30%30%70%

70%70%

30

Private

Out of pocket: 14.4%

quotesdbs_dbs31.pdfusesText_37

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