Health-care costs in Canada expected to hit $331 billion this year: report

Canada is expected to hit $331 billion in health spending in 2022, according to new estimates, but the steep increase in spending caused by the pandemic seems to be sliding down — despite COVID-19 hospitalization rates exceeding those of 2021.

The Canadian Institute for Health Information (CIHI) released their annual National Health Expenditure Trends report on Thursday, laying out their estimates for how much money is going toward health in Canada.

In 2022, Canada will spend around $8,653 on average per Canadian, according to CIHI, with total health expenditure representing 12.2 per cent of Canada’s gross domestic product (GDP), down from the high of 13.8 per cent in 2020.

Before the pandemic, health spending was increasing steadily by around four per cent per year from 2015 to 2019. This growth rate jumped up to a 13 per cent increase in funding in 2020, largely attributed to the pandemic, followed by another seven per cent increase in health spending in 2021.

But after two years of COVID-19, this trend appears to have dropped off significantly. According to CIHI’s estimates, total health expenditure is expected to rise by only 0.8 per cent in 2022.

“Despite a levelling off in 2022, growth in health care spending in Canada continues to be driven by ongoing factors such as an aging population, population growth and use of health services,” Ann Chapman, director of Spending and Primary Care at CIHI, said in a press release. “The strain on budgets because of the pandemic is putting pressure on health system recovery efforts.”

Health spending normally grows alongside the economy, sometimes outstripping it. COVID-19 spurred an unprecedented increase in health spending in 2020.

CIHI is a not-for-profit organization that works with federal, provincial and territorial partners to aggregate and present data on health care management, research and policy within Canada.

The expenditure report includes estimates for 2022 and 2021, as well as finalized figures for health care spending in 2020.

BREAKING DOWN THE PRICE TAG

When looking at total health expenditure, what services does that large sum of $331 billion represent?

Hospitals, physicians and drugs are the largest categories of spending, representing more than 50 per cent of total health spending in 2022.

Nearly one quarter of all health spending in 2022 went into our hospitals, while physicians and drugs both represent 13.6 per cent each.

This means hospitals cost Canadians around $2,084 per person in 2022.

“Growth in hospital spending is expected to accelerate due to efforts to clear surgical and other backlogs,” the release stated.

In 2020, spending on physicians dipped by 3.6 per cent, due to many forms of care being deferred out of fear of patients contracting COVID-19.

This category rebounding in 2021 and 2022, now reaching the second-largest share of health spending.

Spending on drugs is projected to increase 5.4 per cent in 2022, as the number of claims for specialty drugs continues to grow, along with higher costs per person for medication addressing chronic issues.

CIHI also looked at who is paying for the services Canadians are receiving. The public sector is projected to account for 72 per cent of total health expenditures in 2022, with the private sector accounting for 28 per cent.

Around 14 per cent of all health spending in 2022 will be out-of-pocket costs.

From 2000-2019, the public vs. private split has remained fairly steady at 70 per cent public, 30 per cent private.

COVID SPENDING PLUMMETS EVEN AS HOSPITALIZATIONS RISE

A new spending category was introduced in 2021 called COVID-19 Response Funding, which encompasses government-budgeted funding related to COVID-19 treatment, contact tracing, vaccinations, medical goods and other related expenses.

In 2021, according to CIHI’s estimates, this category made up 9.9. per cent of all health care spending in Canada, but it is projected to make up only 4.4 per cent of total health spending in 2022.

Federal, provincial and regional governments spent $29.3 billion in Canada on the pandemic in 2020, then around $32.5 billion in 2021, according to CIHI.

But pandemic-related spending was slashed in half for 2022, with governments only spending around $14.5 billion.

COVID-19 funding per-person in 2022 is also expected to have dropped sharply to nearly half of what it was in 2020, going from $770 per person to $376.

This comes despite COVID-19 fatalities nearly doubling in total since October of last year.

According to the federal government, when looking at weekly numbers of COVID-19 cases, the top ten weeks with the largest number of hospitalizations all occurred this year, not in 2020 or 2021.

And although hospitalizations have fallen since the Omicron surge in January 2022, which caused the largest spike in cases in Canada across the entire pandemic, Canada is still seeing more hospitalizations this fall than we did last year.

According to data from the Public Health Agency of Canada, Canadian hospitals saw an average of about 4,700 hospitalizations a day due to COVID-19 between Sept. 15 and Oct. 15, 2022,. During the same period last year, the average was just 2,000 per day.

According to CIHI’s breakdown, the largest chunk of money allocated to COVID-19 Response Funding went to COVID-19 treatment costs in 2022, at 34 per cent. Around 20 per cent was put toward vaccinations.

COAST TO COAST

Health spending varies dramatically as a “per-person” figure depending on where you are in Canada due to a number of factors including salaries for health-care professionals, the services being offered and how remote a population is. The territories have the highest per-person cost for health, partially due to residents requiring to be flown elsewhere for specialty services.

This is the projected breakdown for 2022, according to CIHI.

Ontario: $8,213 per person; 0.3 per cent increase

Quebec: $8,701 per person; 1.8 per cent decrease

Manitoba: $8,417 per person; 1.0 per cent decrease

Saskatchewan: $8,954 per person; 0.03 per cent decrease

Alberta: $8,545 per person; 3.5 per cent decrease

British Columbia: $8,790 per person; 2.4 per cent increase

Newfoundland and Labrador: $9,894 per person; 1.5 per cent increase

Prince Edward Island: $8,531 per person; 2.3 per cent increase

Nova Scotia: $9,536 per person; 5.0 per cent increase

New Brunswick: $8,010 per person; 0.9 per cent increase

Yukon: $15,884 per person; 1.2 per cent increase

Northwest Territories: $21,946 per person; 2.3 per cent decrease

Nunavut: $21,978 per person; 8.3 per cent decrease

Compared to other countries, Canada has one of the higher per-person spending levels on health care. Out of 38 countries, Canada’s per capita spending in 2020 (the most recent year which comparable data is available for) was among the highest, under Germany and the Netherlands, but above Sweden and Australia.