While health spending continues to climb in Canada, it’s growing at a slower rate, as debt-saddled provinces try to cut the fat, a new report has found.
In its annual report, the Canadian Institute for Health Information (CIHI) reported Canada will spend 11.6% of its gross domestic product on health care this year, down from 11.7% in 2011. And that, itself, was a drop from an all-time high of 11.9% of its GDP in 2010.
“Provincial and territorial governments today are focused on controlling health-care costs,” John Wright, president of the Canadian Institute for Health Information (CIHI), said in a statement with the report, released Tuesday.
That reduced spending is a trend that only likely continue as health transfers to provinces is cut by the feds. The federal government announced in 2011 that provinces will continue get 6% a year until 2016-17. But after that, transfers will be pegged to nominal GDP and may only increase 3% a year.
But the slower growth doesn’t necessarily mean Canadians aren’t getting the treatment they need, CIHI noted.
“Unlike in the past, they’re not cutting programs as much as looking at improving productivity, reducing overhead, controlling compensation and seeking value-for-money initiatives,” said Wright.
Provinces are finding these savings by paying less for doctors, drugs and hospitals, the report found.
In 2012, hospital spending will grow by 3.1%, while payments to physicians will increase by 3.6% - both marking the lowest rates of growth since the late ‘90s.
Physician salaries have been a major factor in growing health spending over the last decade. Doctors are in high demand as more are required to meet the needs of Canada’s growing and aging population.
“Compensation is one area of focus for some jurisdictions as they wrestle with controlling their health spending,” said Jean-Marie Berthelot, vice president of programs at CIHI.
The growth rate for drug spending will fall to 3.3% in 2012, down from 4% last year, according to the report. Spending in this area has been declining for the last decade as major brand-name drugs come off their patents and hospitals can buy cheaper generic alternatives.
Total spending on Canadian health-care for 2012 will reach $207 billion, with 65% of that coming from provinces and territories. That amounts to about $5,948 per person - a number that varies by province.
Newfoundland and Labrador spends the most per person, at $5,190. Alberta is second at $4,606.
Quebec and British Columbia are expected spend the least, at $3,513 and $3,690 per person, respectively.
“Provincial spending can be affected by differences in population health-care needs, health-system structure and health-personnel compensation,” said Berthelot.