Health Care Financing in Canada

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Health Care Financing in Canada

• Pols 321 Lecture 4

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Topics

• Federal-Provincial Financial Arrangements
• Distribution of Health Care Expenditures
• Reform Trends

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Federal-Provincial Financial Arrangements
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EPF The beginning of the end...

• effectively ended the 50/50 cost sharing
  arrangements
• put hospitals, medical care and post secondary
  education under one funding formula
• combination of tax points and cash (tied to
  growth in GNP and population)
• federal government reduced cash transfers by GDP
  -2 in 1986/87, GDP -3 in 1989/90, and froze the
  transfers in 1990/91

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Canada Health Act

• Ottawa introduces the Canada Health Act
• retains the five principles
• consolidates the two previous pieces of
  legislation
• penalizes the provinces for allowing
  extra-billing by reducing EPF payments
• came before an election

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CHST

• rolls CAP and EPF into a single block fund
• places a ceiling for 1996/97 of 26.9 billion
• 1997/98 and beyond to be determined through
  negotiations
• CHA principles and CAP residency requirements
  continue to apply

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CHST ( billion)
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Distribution of Health Care Expenditures
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Public vs. Private
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Registered Nursing Workforce, Canada, 1980 to 2007
Registered Nursing Workforce, Canada, 1980 to
2007                                           
                                                  
                                                  
                                                  
                  
NotesIn 1988, the decrease is largely attributed
to a substantial increase in the number of
employment status Not Stated records in the
Ontario data for that year.In 2000, the increase
is partially attributed to the identification of
comparatively fewer duplicates in the Ontario and
Quebec data that year.In 2003, the increase is
partially attributed to methodological changes in
the submission of data that year. SourceRegulated
Nursing Database, Canadian Institute for Health
Information
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Registered Nursing Workforce, by Jurisdiction and
Canada, 2003 to 2007
  2003 2004 2005 2006 2007 Change2003-2007
N.L. 5,430 5,452 5,496 5,515 5,574 2.7
P.E.I. 1,373 1,377 1,443 1,428 1,435 4.5
N.S. 8,498 8,602 8,733 8,790 8,843 4.1
N.B. 7,186 7,375 7,526 7,680 7,726 7.5
Que. 62,494 63,455 63,827 64,014 64,955 3.9
Ont. 85,187 86,099 89,429 90,061 90,978 6.8
Man. 10,034 10,628 10,811 10,902 10,825 7.9
Sask. 8,503 8,481 8,549 8,480 8,669 2.0
Alta. 24,037 25,600 26,355 26,752 27,527 14.5
B.C. 27,711 28,289 27,814 28,840 30,059 8.5
Y.T. 290 283 302 324 322 11.0
N.W.T./Nun. 672 930 957 1,033 1,048 56.0
Canada 241,415 246,571 251,242 253,819 257,961 6.9
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Licensed Practical Nursing Workforce, by
Jurisdiction and Canada, 2003 to 2007
  2003 2004 2005 2006 2007 Change2003-2007
N.L. 2,719 2,710 2,698 2,639 2,598 -4.5
P.E.I. 619 628 606 599 623 0.6
N.S. 3,022 3,058 3,127 3,174 3,160 4.6
N.B. 2,429 2,556 2,633 2,646 2,734 12.6
Que. 14,831 15,472 16,293 17,104 17,492 17.9
Ont. 25,730 24,467 24,458 25,084 26,126 1.5
Man. 2,417 2,415 2,590 2,652 2,671 10.5
Sask. 2,056 2,131 2,194 2,224 2,381 15.8
Alta. 4,766 5,051 5,313 5,614 5,986 25.6
B.C. 4,391 4,811 4,884 5,412 5,791 31.9
Y.T. 60 53 56 60 59 -1.7
N.W.T. 98 91 101 92 88 -10.2
Canada 63,138 63,443 64,953 67,300 69,709 10.4
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Nurse Practitioner Workforce, by Jurisdiction and
Canada, 2003 to 2007
  2003 2004 2005 2006 2007
N.L. 55 61 66 89 96
P.E.I. - - - -
N.S. 23 30 37 61 72
N.B. 6 14 19 24 29
Que. - - - 1 1
Ont. 494 536 590 639 731
Man. - - 31
Sask. - 42 74 88 99
Alta. 73 106 130 156 176
B.C. - - 35 50
Y.T. - - - - -
N.W.T./Nun. 5 12 19 16 42
Canada 656 801 943 1,129 1,346
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Reform Trends
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Trends Hospitals (1984-91)

• Total number of beds declined from 7.0 to
  6.5/1000 (2.9 in 2007)
• Alberta - government targeted 2.4/100. Capital
  Health actually achieved 1.4(1.6)/1000.

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Trends Hospitals (cont.)

• Nationally (1986/87-1994-95)
• 1994/95 - 901 public, 22 private and 55 federal
• total approved beds 156,547 (98 public)
• Number of hospitals fell by 14 or from 6.6 4.1
  beds/1000 (11). (actually a 30 declined in
  staffed beds) 2.9 in 2007
• Average annual growth in operating expenses was 8
  (-2.4 between 1991/92 and 1994/95)

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Trends Hospitals (cont.)

• Outpatient vs. Inpatient (1986/87,1993/94)
• outpatient days increased by 15
• inpatient days declined by 17
• day surgery increased by 37
• visits to emergency wards increased by 1
• Alberta ratio of outpatient visits to inpatient
  days increased by 130

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Trends Hospitals (cont.)

• Factors contributing to growth in costs
• wage and price inflation (national and sector
  specific
• economic downturn
• unionization
• professionalism
• increasing population aging
• rising costs per admission (intensity of
  servicing/technology, decreasing productivity)

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Trends Physicians (1984-1991)

• increased at at annual rate of 2
• cost of services/patient increased by 10
  annually (1979/80, 1990/91)
• 10 reduction in medical school enrollment
• increasing service intensity
• declining utilization
• cost per patient increased at 10/annum (50
  attributable to GPs)

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Trends Pharmaceuticals (1987/91)

• Total expenditures increased by 55.(gt 10/annum
  (not including drugs dispensed in hospitals)
• new drugs are more costly than existing drugs
• cost or volume?
• Price, volume and quantity have all increased

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Summary

• Cost drivers
• economy-wide wage and price inflation accounts
  for 50
• population growth 10
• aging 5
• wage and prices (health) 20
• inpatient/outpatient
• higher service intensity 5
• lower productivity 10

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Summary

• Proportion of private vs. public has been
  relatively stable over time although there is a
  definite downward trend in percentage of public
  expenditures
• Definite upward trend in percentage of total
  public expenditures devoted to health care
• Upward trend in health expenditures as a
  percentage of GDP

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Internet Sources

• http//secure.cihi.ca/cihiweb/dispPage.jsp?cw_page
  home_e
• http//www.fin.gc.ca/access/fedprov-eng.asp