Canada's health-care spending is expected to reach its highest level ever - $171.9-billion this year, or $5,170 per person - growing faster than the economy and outpacing inflation and population growth, new figures show.
The Canadian Institute for Health Information study, released yesterday, found health spending is expected to reach 10.7 per cent of the country's gross domestic product, attaining highest-ever status in that category and leaving the country's beloved medicare vulnerable to cuts at a time of economic turmoil.
"It is going to raise questions for Canada and other countries as to how much do we really want to spend on health care," said Glenda Yeates, president and chief executive officer of the Canadian Institute for Health Information.
Canada's spending on health care, as reflected by a percentage of the GDP, has had year-over-year double-digit status since 2002.
The first time it reached 10 per cent was in 1992, during a recession. After that, provinces went into cost-containment mode. Nurses were laid off; medical schools were closed, as were some hospitals. Provincial governments managed to squeeze the system, dropping health-care spending to 8.9 per cent of the GDP in the years 1996 and 1997.
But that fiscal prudence came at a cost. Waiting times grew, many Canadians could not - and still cannot - find a family physician due to decreased medical-school enrolment, and nurses were run off their feet as the system starved itself of their services.
Less talked about are the positive effects of that fiscal tightening: Hospitals were forced to become more efficient, which they did in spades by greatly reducing how long patients stayed in their institutions.
The lingering sentiment, however, is that Canada's health-care system, while deeply cherished, carries a high price tag.
In actuality, when figures are adjusted for inflation and population growth, spending is expected to grow by 3.4 per cent in 2008 - similar to annual growth rates in recent years.
And when Canada is compared to the rest of the world, it is hardly a big spender.
No one pays more for health care than the United States, a country that spent $6,714 (U.S.) per person, according to 2006 Organisation for Economic Co-operation and Development figures, the latest available.
Following the U.S. were Norway ($4,520 U.S.), Switzerland, ($4,311 U.S.) and Luxembourg ($4,303 U.S.). Canada was in fifth place, spending $3,678 (U.S.) per person in 2006 - similar to the amounts seen in Austria, Belgium, France and Germany.
"It's clear there's no one magic solution no one country has found," Ms. Yeates said. "I think all countries will be looking for new ways to provide care that meets their values in a way they can afford."
Erin Strumpf, a professor of health economics at McGill University, said the numbers are not alarming; in fact, they fall in line with a trend seen in other countries.
"Why are we spending so much and why are costs going up faster than the general economy?" Dr. Strumpf asked rhetorically in a telephone interview from Montreal. "It's innovation and medical care, things that expand the capabilities of medicine that are primarily driving growth in health-care costs."
Whether Canada should spend a lower share of GDP on health, she said, is a question about how we value improvement in health care compared to spending in other areas. What Canadians should focus more on, Dr. Strumpf said, is what medical treatments are most effective to ensure "we get the most bang for our buck."
Health-care spending can be neatly divided into three categories: hospitals, drugs and physicians.
Hospitals make up the largest component of spending, comprising 28 per cent and projected to tally $48.1-billion this year.
After that is pharmaceuticals, which include prescribed and non-prescribed drugs, accounting for 17.4 per cent of health-care spending, or $29.8-billion.
Payments to physicians represent Canada's third-largest share of health spending, projected to make up 13.4 per cent of total spending, or $23-billion this year - a share that has remained relatively stable since 1999.
