Canada’s health care costs have increased by 4% over last year, totalling approximately $242 billion in 2017. This is according to a new report released by the not-for-profit organization, Canadian Institute for Health Information (CIHI). The 2017 increase in health care costs is slightly above the average annual increase of 3.2% seen since 2010 and equates to about $6,604 per Canadian, $185 more per person than last year.
CIHI estimates that health care costs will represent 11.5% of Canada’s gross domestic product in 2017. Hospitals will account for the largest percentage of health care spending in Canada at 28.3%. Drug costs and physician services continue to round out the top three, at 16.4% and 15.4% respectively.
Hospitals, drugs and physician services have been the top three health care costs in Canada since 1997, so these figures are no surprise. However, the report did reveal that drugs are now the fastest growing cost, rising by 5.2% in 2017. This is above the increase in hospital costs of 2.9% and physician services spending at a 4.4% increase.
Michael Hunt, Director of Health Spending and Strategic Initiatives at CIHI, attributes rising pharmaceutical costs to more expensive drugs entering the market in recent years, including biologics. Biologics are drugs made from biological substances, like living organisms, including cells and tissues, and can be gene based. They are more complex and expensive to manufacture than drugs that are made from chemicals. Biologics are used to treat chronic inflammatory diseases, such as arthritis, Crohn’s disease and psoriasis. An expensive drug used to treat hepatitis C was introduced in Canada in 2014, also contributing to the rise in drug costs.
The increase in overall health care spending is partly due to Canada’s aging population, with an increase of about 1.5% spent on senior care. Data shows that spending is typically greater in provinces with a higher population of seniors, such as Newfoundland and Labrador, which has a high senior population and one of the highest health care costs at $7,738 per person in 2017, representing a 3.9% increase.
The most significant health care spending across the country is seen in the more sparsely populated regions of northern Canada, with the average cost per person at $14,400 in the three Territories, double the Canadian average.
Since the early 2000s, the percentage of costs being paid from the private sector vs. the public sector has stayed around the same, at 70% of health expenditures being paid for by the public sector and 30% by the private.
The CIHI report also compares spending across the 35 countries that make up the Organisation for Economic Co-operation and Development (OECD). It notes that internationally, Canadian health care spending is above the average OECD cost of $4,826 per person per year. The U.S. tops the list with an average cost of $11,916 per person.
Canada spent $1,012 per person on medications in 2015, which is the last time significant international data was compiled. This is less than the United States, which spent $1,457 per person, but more than every other country in the OECD except Switzerland. Canada also spent significantly more on medications than the OECD average of $709 per person.
http://www.cbc.ca/news/health/cihi-health-costs-canada-report-prescriptions-pharmacare-1.4390945
http://cliniquecme.com/en/drug-costs-rising-fast-in-canadian-health-care-spending-report-finds/
https://www.cihi.ca/en/total-health-spending-in-canada-reaches-242-billion
https://www.cihi.ca/en/where-is-most-of-the-money-being-spent-in-health-care-in-2017
