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Health Care Spending to Reach $130 Billion This Year; per Capita Spending to Hit $4,000Spending up, but rate of increase lowest in last seven years, reports CIHI
December 8, 2004—Canada’s health care spending is expected to reach $130.3 billion in 2004, a 5.9% increase over last year, and the lowest annual growth rate since 1997. The Canadian Institute for Health Information (CIHI) released these figures today in its annual report on Canada’s health expenditure. In 2002, health care spending was $114 billion and is estimated to have reached $123 billion in 2003, for annual increases of 7.3% and 7.9%, respectively. “Health expenditure grew less rapidly in 2004,” says Graham W. S. Scott, Chair of CIHI’s Board of Directors. “While our current estimates may have to be adjusted upward slightly as a result of new spending arising from the recent First Ministers Agreement, our projections indicate that growth in health spending will be in line with overall growth in the economy.” Total Health Expenditure and Gross Domestic ProductBased on recent estimates of the nation’s gross domestic product (GDP), CIHI projects that the ratio of health expenditure to GDP will remain at 10.1% in 2004, unchanged from 2003. In 2002, the last year for which comparable data are available, Canada ranked fourth among G8 countries in total health expenditure as a percentage of GDP. The United States, at 14.6%, ranked first, followed by Germany (10.9%) and France (9.7%). Canada, at 9.6%, ranked fourth, followed by the United Kingdom, Italy, Japan and Russia. Per Capita Spending—Provincial and Territorial ComparisonsTotal health expenditure per person in Canada is expected to reach $4,077 in 2004 (current dollars), an increase of 5% from 2003. Adjusted for inflation and growth in the population, per capita expenditure is expected to increase by 1.2%, substantially less than the growth rates (3.7% to 5.7%) recorded since 1998. Total health expenditure per capita varies across the country and is much higher in the territories than in the provinces, due to the higher costs of serving relatively small populations spread across large geographic areas. Among the provinces, Manitoba is expected to spend the most per person on health this year, with total per capita health expenditure at $4,406 (current dollars), followed by Alberta ($4,275) and Ontario ($4,274). The lowest expenditure per capita is projected to be in Quebec ($3,667), New Brunswick ($3,865) and Prince Edward Island ($3,926). Public and Private SectorsThe proportion of health care spending between the public and private sector is expected to remain the same for the second year in a row. After reaching 30.3% of health care spending in 2002, the proportion of private sector spending is estimated to have decreased slightly to 30.1% for 2003 and 2004. Public sector spending is expected to reach $91 billion, a projected annual increase of 5.8%, while spending by households and private insurance firms (the private sector) is expected to reach $39 billion, for an annual increase of 6.1%. Categories of Total Health SpendingHospitals remain the largest component of health care spending at $38.9 billion in 2004, accounting for just under 30% of total health expenditure. However, the proportion of hospital spending has declined steadily over the last three decades, from a high of 45.2% in 1976. “One interesting finding from this year’s data is that, for the first time in 22 years, hospital spending as a proportion of overall expenditure did not decline,” says Glenda Yeates, President and CEO of CIHI. “Two other trends continued, however: the proportion spent on physician services again declined slightly (from 13.0% to 12.9%), while the proportion spent on drugs continued to increase, rising from 16.3% to 16.7%.” The major categories reported in the national health accounts include hospitals, other institutions, physicians, other professionals, drugs, capital, public health and administration and other health expenditure. National Health Expenditure DatabaseThe data released today are from CIHI’s latest report, National Health Expenditure Trends, 1975-2004, which provides an overview of health care spending trends from 1975 to 2002, as well as forecasts for 2003 and 2004. The report draws upon data compiled from CIHI’s National Health Expenditure Database, Canada’s most comprehensive source of information on health care financing and spending. The estimates are based on the latest available information, and are subject to revision when more recent and complete data are produced. Estimates for 2003 and 2004 are based on a combination of health expenditure as reported in provincial and territorial government budgets, and forecasts of spending in the private and other public sectors based on recent trends. Estimates of GDP for 2004 are derived from Statistics Canada and Conference Board of Canada data published in October 2004. For further details on data sources and estimation methods, see the methodological notes of CIHI’s National Health Expenditure Trends, 1975–2004. Where appropriate, the National Health Expenditure Trends, 1975-2004 provides data in both current and constant dollars. Current dollars measure actual expenditure in a given year. Constant dollars remove the effects of inflation to measure expenditure based on price levels prevailing in a base year. In this release, the term “constant dollars” refers to amounts in 1997 prices. Real growth rates measure annual changes of data reported in constant dollars. Canadian Institute for Health InformationThe Canadian Institute for Health Information (CIHI) is an independent, pan-Canadian, not-for-profit organization working to improve the health of Canadians and the health care system by providing quality health information. CIHI’s mandate, as established by Canada’s health ministers, is to coordinate the development and maintenance of a common approach to health information for Canada. To this end, CIHI is responsible for providing accurate and timely information that is needed to establish sound health policies, manage the Canadian health system effectively and create public awareness of factors affecting good heath. Tables/ChartsReport
ContactJill Oviatt Leona Hollingsworth |
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Page last updated December 7, 2004 |
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