Price of care

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It started out as a simple question: how much do Canadians spend on health care?

The simple answer: a lot.

But the numbers are complicated, and to help navigate through the labyrinth that is health-care spending, The National called on University of Toronto business professor Joe D'Cruz for help. Health-care spending is one of his specialties.

"In 2003, Canadians spent a total of $121 billion on health care," he said. "That represents about 10 per cent of the total amount of money spent in the country."

For a family of four, D'Cruz says, it works out to about $16,000. It's an amount that's growing as a percentage of the Gross Domestic Product – or the total value of goods and services Canada produces.

The numbers D'Cruz analysed come from a report by the Canadian Institute for Health Information called National Health Expenditure Trends, 1975-2003.

"In 1975, health-care spending in Canada was seven per cent of GDP," D'Cruz said. "By 2003, health-care spending had gone up to 10 per cent of GDP. That's a very significant change over a fairly long period of time."

The costs are rising because of new technologies, new drugs and an aging population.

Compared to other countries with similar economies, Canada's spending is in the ballpark, according to a report from the Organization of Economic Co-operation and Development. The latest figures on what countries spend on health care come from 2002, when Canada spent 9.6 per cent of GDP on health care:

* France 9.7%.

* Germany 10.9%.

* Denmark 8.8%.

* Sweden 9.2%.

At the high end of the scale is the United States, which spent 14.6 per cent of GDP on health care.

Canada's spending trend has been steadily on the rise: between 1975 and 1991 it grew by an average 3.8 per cent per year.

...

"The key thing about health care is the rate of increase in health-care costs to government, because the cost of health care to government is increasing at all levels at a faster rate than the increase of any government's revenue," said Janice McKinnon, a former Saskatchewan finance minister and a professor of public policy at the University of Saskatchewan.

"In the long term, if something is increasing at a faster rate than the increase in government revenue it's not sustainable. Eventually it will be 100 per cent of your budget, particularly if you have a downturn in the economy."

...

"We're spending more on drugs than we're spending on doctors in this country," D'Cruz said. "Drugs used to be nine per cent of the total spend in 1975 and drugs have now gone up to 16 per cent. Drugs have become the second most important component of health-care spending in this country."

...

"The trend line in Canada is a very dramatic one and it's not sustainable with our taxation levels," McKinnon said. "If you compare us to European countries, one of the difficulties is they don't live next door to the United States. They are able to sustain higher levels of health spending, higher levels of education spending, higher levels of environment spending because they can have higher taxes. If our tax levels get too out of line, we lose people, we lose companies to the United States."

http://www.cbc.ca/news/background/healthca...riceofcare.html