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Nurses waiting outside the isolation room help the team working inside the room of a COVID-19 patient inside the intensive care unit of Humber River Hospital in Toronto on April 15, 2021. The COVID-19 crisis led to a massive increase in costs, according to a new report.CARLOS OSORIO/Reuters

The pandemic will push health care spending to more than $300-billion in 2021, according to a new report that found health spending rose more than 12 per cent from 2019 to 2020, the highest level seen in decades.

The findings are part of a new report published Thursday by the Canadian Institute for Health Information, which provides a sobering look at the impact COVID-19 has had on the country’s already stretched health system.

The CIHI report shows that health care costs in Canada were relatively stable from 2015 to 2019, with growth of about 4 per cent every year. But the COVID-19 crisis led to a massive increase in costs, according to CIHI.

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“Every province and territory spent more on health per capita in 2020 than they did in 2019,” said Brent Diverty, vice-president of data strategies and statistics at CIHI. “It’s not unexpected that COVID and the health system management of the pandemic was expensive, but now we’re able to quantify it.”

CIHI used provincial and territorial budgets to estimate health spending levels for 2021. The projections are typically close to what is actually spent, Mr. Diverty said.

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A nurse runs with equipment needed to treat a COVID-19 patient at the Humber River Hospital in Toronto on April 20, 2021. COVID-19 treatments, vaccines and public-health expenditures such as contact tracing are all part of the spending surge occurring during the pandemic, the report says.CARLOS OSORIO/Reuters

Hospitals, drugs and physicians continue to make up the three biggest areas of health-related spending in Canada, making up a combined 52 per cent of the country’s health care costs, according to CIHI. But a new area of spending related to COVID-19 is expected to account for about 7 per cent of total health spending in 2021.

COVID-19 treatments, vaccines and public-health expenditures such as contact tracing are all part of the spending surge occurring during the pandemic, the report says.

It’s unclear whether those high levels of spending will continue as the worst of the pandemic wanes in most parts of Canada.

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Residents 18 and older, who live in COVID-19 hot spots, line up for a special vaccination clinic at Downsview Arena in Toronto on April 21, 2021.CHRIS HELGREN/Reuters

Don Drummond, an economist and Stauffer-Dunning Fellow at Queen’s University who has written public-policy reports on health reform, said the health system will eat up whatever money is thrown at it. The pandemic has presented a unique opportunity for governments to think differently about how health care should look in the future, he said. Instead of simply spending money on more beds and treatments, Prof. Drummond said decision-makers should think about how to achieve the best outcomes for patients and work backward from there.

One of the best examples where this can be achieved is long-term care, he said. Typically in Canada, an individual lives at home until their health declines to the point where they need hospitalization or full-time care, which is incredibly costly and also severely restricts an individual’s quality of life.

In other countries, such as Denmark, Prof. Drummond highlighted the fact there are programs in place to provide in-home support to seniors to help them live independently as long as possible. Meal preparation, in-home nursing and other forms of help are a fraction of the cost of long-term care beds, but few in Canada seem willing to have that discussion, Prof. Drummond said.

He said too many Canadians are complacent when it comes to the country’s health care system because of the tendency to compare outcomes with the U.S. But experts have long been calling attention to serious problems in Canada’s health system, such as the fact that there is no universal coverage for prescription drugs – which means some people can’t afford their medication. Canadians also typically have to contend with long wait times for specialist appointments, among other problems.

Prof. Drummond said Canadians should compare this country with parts of the world where the focus is on promoting health, preventing illness and allowing people to age in place instead of relying too heavily on hospitals and long-term care homes.

He said the tragedy of COVID-19 in long-term care homes across the country should be a wake-up call for dramatic reform. Instead of building more beds that seniors don’t want to end up in, the health system should find creative ways to let them live at home or in a home-like setting where they can get support they need.

“People want to age in place,” Prof. Drummond said. “Home care can be done for $50 to $100 a day.”

Mr. Diverty said the CIHI report shows that spending on home care and other forms of non-hospital-based care is on the rise in Canada. Spending on virtual care has also increased, which is important because that can provide patients with flexibility in accessing health care.

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