National Health Expenditure Trends 1975 to 2008

Highlights
• Total health expenditure in Canada, in current dollars,[i] was estimated at $151.3 billion in 2006, and is forecast to have reached $161.6 billion in 2007 and $171.9 billion in 2008.
• After adjusting for inflation, total health care spending grew at an average annual rate of 3.8% between 1975 and 1991. From 1991 to 1996, total spending on health care edged up by the rate of 0.9% per year. It increased by 4.9% annually from 1996 to 2006. The real growth (based on constant 1997 dollars) in health care spending in Canada is expected to be 3.8% in 2007 and 4.3% in 2008.
• Total health care spending as a percentage of gross domestic product in Canada fell each year between 1993 and 1997, to reach 8.9% in 1997. Health expenditure has grown faster than GDP since 1998, with the result that the total health expenditure– to-GDP ratio reached 10.5% in 2006. The ratio is forecast to be 10.6% in 2007 and 10.7% in 2008.
• Since 1997, the public-sector share of total health expenditure has remained relatively stable at around 70%. It accounted for 69.9% of total expenditure in 2006 and is forecast to account for 70.1% in 2007 and 70.0% in 2008.
• In 2006, private health insurers and households (the private sector) spent $45.5 billion. Private-sector expenditure is forecast to reach $48.4 billion in 2007 and $51.6 billion in 2008. Prescribed drugs and dental care are the greatest components of total private health spending.
• From 1988 to 2006, private insurance expenditure grew more rapidly than out-ofpocket expenditure and non-consumption expenditure. Private insurance firms increased their share of private-sector expenditure from 29.2% to 40.0%, while the out-of-pocket expenditure proportion dropped from 58.1% to 48.6%.
• In 2006, at the national level, the categories hospitals and physicians were mainly financed by the public sector, while drugs and other professionals were financed primarily by the private sector.
• Hospitals have traditionally occupied a prominent place in health care provision. In the mid-1970s, hospitals accounted for approximately 45% of total health expenditure. During the past 30 years, the share of hospitals in total health expenditure has fallen. In 2008, hospitals made up the largest component of health care spending, accounting for 28.0% of total health expenditures. Since 1997, drugs have accounted for the second-largest share. In 2008, drugs accounted for 17.4% of total health expenditure, while physicians are expected to make up the third-largest share, with 13.4%.
• Administration expenditure includes public- and private-sector spending. In 1975, administration accounted for 2.9% of total public-sector expenditure and 2.5% of total private-sector expenditure. While the share gradually declined in the public sector to 2.4% in 2006, the private-sector share rose to 6.2%.
Total health expenditure per capita in Canada was estimated at $4,633 in 2006 and is forecast to be $4,900 in 2007 and $5,170 in 2008.
• Total health expenditure (including public and private sectors) per capita varies among the provinces. In 2008, Alberta and Manitoba are forecast to spend more per person on health care than any other province, at $5,730 and $5,555, respectively. Quebec and British Columbia are forecast to have the lowest expenditure per capita at $4,653 and $5,093, respectively.
• Provincial and territorial government health expenditures account for almost 65% of total health expenditures in Canada and more than 90% of expenditures by all levels of government. Provincial and territorial government health expenditures during the current year, 2008, are forecast to reach $110.7 billion.
• Provincial and territorial governments’ health expenditure per capita averaged $3,330 in 2008. The highest per capita spending among the provinces is projected to be in Newfoundland and Labrador ($3,962) and Alberta ($3,817), while the lowest is forecast to be in Quebec ($3,006) and Ontario ($3,270).
• Total health expenditure as a percent of provincial GDP ranged from 6.9% in Alberta and 8.8% in Newfoundland and Labrador to 14.6% in Nova Scotia and 15.3% in Prince Edward Island in 2008. Among the territories, the ratio of health expenditure to GDP is 9.4% for the Northwest Territories, 14.9% for the Yukon and 26.8% for Nunavut in 2008.
• In 1993, health expenditures were equivalent to 32.7% of total provincial and territorial government program expenditures (total expenditure less debt charges). Health expenditures decreased as a percent of government expenditures during the next two years. In 2007, following strong growth of health expenditures combined with more modest rates of growth in total program expenditures, the share of program expenditures allocated to health increased to 39.2%.
• In 2006, the latest available year for data broken down by age group, health care spending by provincial and territorial governments was highest for infants and seniors. Canadians younger than the age of 1 cost an estimated $7,891 per person. From youths age 1 to adults age 64, spending averaged less than $3,700 per person. There was a pronounced increase in per capita spending in the senior age groups: $5,369 for age group 65 to 69, $7,382 for 70 to 74, $9,987 for 75 to 79 and $17,121 for age 80 and older.
• Canada continues to rank among the world’s top 10 health spenders when compared to other countries in the Organisation for Economic Co-operation and Development (OECD). Among 25 countries with similar accounting systems, the U.S. maintained its rank as the highest per capita spender on health care (US$6,714) in 2006, the latest year for which data are available. Canada ranked fifth in per capita spending (US$3,678).

Footnote:
i. All figures are in current dollars (unadjusted for inflation) unless otherwise stated.

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