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Provincial/territorial government health spending expected to reach $91.4 billion in 2005–2006, reports CIHI

Growth in government health spending continues to outpace GDP

In this release:

Health spending as a proportion of provincial GDP | Per capita spending | Health spending as a proportion of program spending | Health spending by category of service | National Health Expenditure Database | About CIHI | Figures and Tables | Report | Contact

November 2, 2005—A new report on provincial and territorial government health spending released today by the Canadian Institute for Health Information (CIHI) shows continued growth in health care spending by provincial and territorial governments. Today’s report, Preliminary Provincial and Territorial Government Health Expenditure Estimates, 1974–1975 to 2005–2006, reveals that provincial and territorial governments are expected to spend $91.4 billion in 2005–2006, an increase of 7.5% over the previous year. Provincial and territorial government health spending is estimated to have reached $79.9 billion in 2003–2004 and $85.0 billion in 2004–2005, reflecting annual growth rates of 7.7% and 6.4%, respectively. After removing the effects of inflation, health care expenditures in constant 1997 dollars are projected to reach $75.7 billion in 2005–2006, reflecting a real growth rate of 4.7%.

“This report offers a first look at health care spending over the past year,” says Glenda Yeates, President and CEO of CIHI. “The estimated 7.5% growth in expenditures maintains the trend observed over the past eight years.”

Health spending as a proportion of provincial GDP

Overall, health care spending as a share of provincial GDP in 2005–2006 is forecasted to reach 6.7%. This ratio is expected to be highest in Prince Edward Island (8.9%), New Brunswick and Manitoba (both at 8.6%) and lowest in Alberta (5.2%). “Since 1996–1997, the provincial and territorial government ratio of health expenditures to GDP has steadily increased from 5.8% to 6.7%. However, this is lower than the highest ratio of 6.9%, experienced in 1992–1993,” says Geoff Ballinger, Manager of Health Expenditures at CIHI.

Per capita spending

Average health care spending per capita by provincial and territorial governments, in current dollars, is expected to reach $2,845 in 2005–2006, an increase of 7.2%. Per capita expenditures have increased on average 6.5% per year since 1997–1998. The five years prior to this period saw average increases of 0.06% per year. The highest per capita spending on health among the provinces in 2005–2006 is projected to be in Alberta ($3,298), Newfoundland and Labrador ($3,184) and Manitoba ($3,128), while the lowest is forecasted in Quebec ($2,449), Prince Edward Island ($2,682) and New Brunswick ($2,847).

Health spending as a proportion of program spending

Over the past three decades, provincial and territorial governments have allocated an increasing proportion of their total program expenditures to health care. Between 1974–1975 and 1995–1996, the proportion spent on health increased by four percentage points, from 28.3% to 32.3%. The share increased more rapidly between 1995–1996 and 2003–2004 to reach 39.0%—a rise of almost seven percentage points in eight years. The newest estimates show a slight drop, to 38.7% in 2004–2005. Ontario (44.4%), Nova Scotia (42.5%) and Manitoba (42.1%) are estimated to have had the highest proportion of health expenditures as a percentage of government program expenditures in 2004–2005. Quebec (31.2%), Prince Edward Island (34.2%) and Newfoundland and Labrador (36.7%) are expected to show the lowest proportion.

Health spending by category of service

In 2005–2006, provincial and territorial governments are expected to allocate 61.9% of health expenditures to programs associated with services covered by the Canada Health Act (hospitals and physician services). Hospital expenditures are expected to account for 42.3% of provincial and territorial government health expenditures, a drop of over eight percentage points since 1985–1986. Physician services account for 19.6%, while 10.5% will go to institutions other than hospitals. Drugs have experienced the most significant gain in share, reaching 9.1% overall—more than five percentage points above the 3.8% recorded 20 years ago.

National Health Expenditure Database (NHEX)

The preliminary data released today were compiled from CIHI’s National Health Expenditure Database, Canada’s most comprehensive source of information on health care financing and spending. These estimates will be finalized as additional information becomes available and will be presented in National Health Expenditure Trends, 1975–2005, a comprehensive review of national total health expenditures, to be released in December 2005.

Provincial and territorial government estimates are based on information obtained from provincial and territorial public accounts. The provincial/territorial government sector includes health spending from provincial and territorial government funds, federal health transfers to the provinces and territories and provincial government health transfers to municipal governments. Where appropriate, data are reported in both current and constant dollars. Current dollars measure actual expenditures in a given year. Constant dollars remove the effects of inflation to measure expenditures based on price levels prevailing in a base year. In this release, constant or real dollars refer to amounts in 1997 prices.

About CIHI

The Canadian Institute for Health Information collects and analyzes information on health and health care in Canada and makes it publicly available. Canada’s federal, provincial and territorial governments created CIHI as a not-for-profit, independent organization dedicated to forging a common approach to Canadian health information. CIHI’s goal: to provide timely, accurate and comparable information. CIHI’s data and reports inform health policies, support the effective delivery of health services and raise awareness among Canadians of the factors that contribute to good health.

Figures and Tables

• Table 1. Provincial/Territorial Government Health Expenditure, by Province/Territory and Canada, 1974–1975 to 2005–2006—Current Dollars (Table F.1.1.1 in the report)
  
  
• Table 2. Provincial/Territorial Government Health Expenditure, by Province/Territory and Canada, 1975–1976 to 2005–2006—Constant Dollars (Table F.1.1.6 in the report)
  
  
• Table 3. Provincial/Territorial Government Health Expenditure, by Province/Territory and Canada, 1974–1975 to 2005–2006—Current Dollars (per Capita) (Table F.1.1.2 in the report)
  
  
• Table 4. Provincial/Territorial Government Health Expenditure, by Province/Territory and Canada, 1975–1976 to 2005–2006—Constant Dollars (per Capita) (Table F.1.1.7 in the report)
  
  
• Table 5. Total Provincial/Territorial Government Health Expenditure as a Percentage of (Provincial/Territorial) GDP, by Province/Territory and Canada, 1974–1975 to 2005–2006—Current Dollars (Table F.1.1.3 in the report)
  
  
• Table 6. Total Provincial/Territorial Government Health Expenditure as a Proportion of Total Provincial/Territorial Government Programs, by Province/Territory and Canada, 1974–1975 to 2004–2005—Current Dollars (Table F.1.1.4 in the report)
  
  
• Table 7. Provincial/Territorial Government Health Expenditure by Use of Funds, Canada, 1974–1975 to 2005–2006—Constant Dollars (Table F.2.1.2 in the report)

Report

• Information about: National Health Expenditure Trends, 1975-2005

Contact

Jill Oviatt
(613) 241-7860, ext. 4310
Cell: (613) 612-3914
media@cihi.ca

Leona Hollingsworth
(613) 241-7860, ext. 4140
Cell: (613) 612-3915
media@cihi.ca

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