National Health Expenditure Trends, 1975 to 2011 – Canadian Institute for Health Information (CIHI) – 3 November 2011

Posted on November 4, 2011. Filed under: Health Economics | Tags: |

National Health Expenditure Trends, 1975 to 2011 – Canadian Institute for Health Information (CIHI) – 3 November 2011

“Total spending on health care in Canada is expected to grow by more than $7 billion this year to reach a forecast $200.5 billion in 2011. This amounts to roughly $5,800 per Canadian, about $150 more per person than last year, according to a new report released today by the Canadian Institute for Health Information (CIHI).

National Health Expenditure Trends, 1975 to 2011, one of two CIHI reports released today, shows that growth in health care spending is slowing down. Spending is expected to increase by 4.0% in 2011 over last year—the lowest annual growth rate seen in the last 15 years. In contrast, average annual growth in health care spending between 1998 and 2008 was 7.4%.

While health care spending continues to rise faster than inflation and population growth, it is expected to grow more slowly than the overall economy this year. Spending on health care is forecast to reach 11.6% of Canada’s gross domestic product (GDP) in 2011, a slight decrease from the historic peak of 11.9% in 2009 and 2010. ”

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“CIHI is also releasing another major study today, called Health Care Cost Drivers: The Facts. The report examines the key factors that contributed to the $200-billion milestone. It focuses on public-sector health care spending between 1998 and 2008—a boom period when annual health expenditure in Canada more than doubled—and identifies issues to monitor in the future.

The study shows that in Canada, as in many countries in the Organisation for Economic Co-operation and Development (OECD), there was a tendency to spend more on health care during a period of economic growth and higher income. From a fiscal policy perspective, the period from 1998 to 2008 saw a reduction in the interest that governments in Canada had to pay on outstanding debt, which allowed them to divert resources to overall program spending and tax reduction. The major cost drivers of public-sector health care spending in the past decade were compensation of health care providers, increased use of services and an evolution in the types of services provided and used.”

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