Canada’s health care spending expected to reach 10% of GDP

Canada’s health care spending expected to reach 10% of GDP – Health

OTTAWA — Canadian health care spending is expected to reach $121.4 billion or about 10 per cent of Canada’s Gross Domestic Product with hospitals being the largest component of the cost followed by prescription drugs says a recently released report from the Canadian Institute for Health Information.

Although health expenditures rose very little from 2002 (4.5 per cent) to 4.6 per cent in 2003, and are lower than annual increases of 5 per cent from 1996 to 2001, the increase in health spending for 2003 still matches the all-time high reached in 1992 for heath expenditures as a percentage of the GDP.

But Canada’s increasing health care costs are no exception when compared to 12 other OECD countries, whereby Canada ranked fourth in the proportion of the GDP spent on health care. In addition, Canada spent 9.7 per cent of the GDP on health in 2001, falling behind the u.s. at 13.9 per cent, Switzerland at 11.1 per cent and Germany at 10.7 per cent.

Dr. Jeremiah Hurley, a health economist and advisor to CIHI noted that this year’s figures “illustrate several noteworthy trends. Capital spending in particular has increased significantly, more than doubling in the past seven years–1996 to 2003–reflecting major investments in high-tech equipment like MRI’S and CT scanners, as well as new buildings.”

As well, Hurley notes that “hospital expenditures continue to rise at lower rates than other categories. Over the past 27 years, hospitals have decreased from 45 per cent of total health spending to 31 per cent while drugs have nearly doubled, to over 16 per cent.”

The CIHI also reports that about 70 per cent of Canada’s health expenditures is financed by the public sector, including federal and provincial governments, while the remaining 30 per cent is funded by the private sector, including individuals and private insurance firms.

Although the overall balance. between private and public financing has been virtually stable during that past few years, the balance varies greatly by category with 90 per cent of hospital and physician costs being funded by the public sector while more than 60 per cent of prescription and non-prescription drug costs being financed by the private sector.

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