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Canada’s health spending growth ‘modest,’ remains below pre-pandemic levels: CIHI

Growth in Canada’s health spending increased slightly but has remained below pre-pandemic levels and is expected to reach $344 billion in 2023, new data from the Canadian Institute for Health Information says.

That’s about $8,740 per person, CIHI’s national health expenditure trends report said Thursday.

The institute’s health-care spending data includes money spent by the public sector, private sector and money paid by individuals.

The projected total for 2023 is a rise of about $9 billion from last year, but still well under the year-over-year growth seen before the COVID-19 pandemic.

Between 2015 and 2019, health-care spending increased by an average of 4.3 per cent per year. The pandemic drove a sharp 13.2 per cent rise in 2020, followed by a 7.8 per cent increase in 2021.

But in 2022, the annual growth in health spending decreased to 1.5 per cent — and has risen by a “modest” 2.8 per cent in 2023, said Christopher Kuchciak, manager of health expenditures at CIHI.

“(It’s) very much a pullback from the COVID pandemic receding,” Kuchciak said.

“We had that surge in emergency response and so this is returning to pre-pandemic levels of growth.”

Health-care spending varies widely between provinces and territories based on the needs of the populations, as well as population growth, Kuchciak said.

Factors that influence spending include the number of seniors and whether health care is delivered in urban versus rural environments, he said.

Health-care spending in 2023 is about $8,245 per person in Ontario, while it is $23,652 in Nunavut, the report said.

Growth in spending ranged from lows of 0.4 per cent in Quebec and 0.7 per cent in Ontario to highs of 7.7 per cent in Prince Edward Island and 9.8 per cent in Nunavut. Yukon saw the sole decrease in growth of 0.3 per cent.

Provincial and territorial governments pay about 65 per cent of health-care costs, which includes money from federal transfers, Kuchciak said.

Another five per cent of public sector spending comes through federal government health care responsibilities — including Indigenous communities and people serving in the military — and municipally-funded services, such as local public health.

Private insurance companies pay about 12 per cent of health-care costs, while out-of-pocket medical expenses — such as uninsured prescriptions — make up another 15 per cent. About two per cent of health-care spending includes things like private donations to hospitals and even parking fees, Kuchciak said.

In terms of where the money goes, hospitals get about a quarter of the health-care spending pie, the report said.

About 14 per cent is spent on physicians.

Spending on both hospitals and physicians continues to increase as they try to catch up on surgical backlogs and wait times that emerged amid the pandemic, the report said.

Drugs account for about 14 per cent of health-care spending.

Several other health-care services, including long-term care homes, dental care, vision care and vaccines make up the rest of the pie.

The coming years are likely to bring more increases in health-care spending, Kuchciak said, because of both population growth and inflation, especially when it comes to staffing.

“Health care is provided by people,” he said, noting that many doctors and nurses are locked into contracts, but those will come up for renegotiation.

“The current environment is modest growth, but the outlook (is) certainly the conditions are for more higher growth in the future.”

This report by The Canadian Press was first published Nov. 2, 2023.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

Nicole Ireland, The Canadian Press