Canada - World Health Organization Regional Office for Europe

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Health systems in transition Canada
3.1 Health expenditure
Of the total of C$200 billion spent on health care in 2011, almost 43% was
directed to hospital and physician services. If medically necessary, these
services are defined as “insured services” under the Canada Health Act.
Almost 30% was spent on private health care services, a large proportion
of which was for dental and vision care services as well as over-the-counter
pharmaceuticals and privately paid prescription drugs. An additional 23.5%
was spent by governments on health infrastructure and publicly funded or
subsidized non-medicare services. Finally, 3.5% was devoted to direct federal
services including benefits for special populations such as First Nations living
on reserves and Inuit residing in northern land claim regions, as well as health
research and the regulation of medicines (CIHI, 2010b).
Table 3.1
Trends in health expenditure in Canada, 1995–2010 (selected years)
1995 2000 2005 2010
THE $US PPP per capita 2 054.1 2 518.9 3 441.9 4 478.2
THE as % of GDP 9.0 8.8 9.8 11.3
Public health expenditure as % of GDP 6.4 6.2 6.9 8.0
Public health expenditure as % of THE 71.2 70.4 70.2 70.5
Private expenditure on health as % of THE 28.8 29.6 29.8 29.5
Private expenditure on health as % of total
government spending
40.4 42.1 42.4 41.9
OOP payments as % of THE 15.9 15.9 14.6 14.7
OOP payments as % of private expenditure on health 55.2 53.7 49.1 49.7
PHI as % of THE 10.3 11.5 12.6 12.8
PHI as % of private expenditure on health 35.8 38.8 42.3 43.3
Source: Calculated based on OECD (2011a).
Note: THE, total health expenditure; OOP, out-of-pocket; PHI, private health insurance.
As shown in Table 3.1, Canada has experienced rapid growth in THE in
recent years, whether measured by per capita increases in spending or as a
percentage of economic growth. Real annual growth in THE reached a
peak in the late 1970s and the early 1980s, then declined precipitously in the
early to mid-1990s only to rise again by the end of the 20th century. From
the early 1990s until 1997, health expenditure growth, particularly public
sector health expenditure growth, was substantially below GDP growth as
a consequence of major funding constraints by provincial health ministries,
producing a real (inflation-adjusted) decline in public health care spending
(Tuohy, 2002). Throughout this period of public restraint, the growth in private
health spending outstripped public health spending. By the end of the 1990s,