Canada - World Health Organization Regional Office for Europe

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66 6.0 5.0 4.0 3.0 2.0 1.0 Health systems in transition Canada To gain a fuller appreciation of the link between economic growth and health spending, it is worthwhile comparing the Canadian experience with all higher income OECD countries for which comparable data are available. As can be seen in Fig. 3.5, total health spending exceeded economic growth (location above the 45 degree line) in almost all these countries between 1998 and 2008. Overall, this relationship speaks to the fact that health care is, to a considerable extent, what economists call a superior good. As national incomes go up over time, governments tend to spend progressively more of these increases on health care relative to other goods and services. This observation is consistent with a series of empirical studies conducted by Gerdtham & Jönsson (2000) in which higher income was found to be the single most important factor determining higher levels of health expenditure in higher income countries. Fig. 3.5 Average growth in government health expenditure per capita and GDP per capita, 1998–2008 Growth (%) Source: CIHI (2011b). Belgium United States Denmark United Kingdom Australia Japan Switzerland France Germany Norway New Zealand Austria Spain Canada Sweden Iceland 45 Degree line 0.0 Ireland 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Finland Average annual real growth in GDP per capita (%) 0.07
Health systems in transition Canada 67 To understand the underlying health cost drivers, it is essential to separate health spending by service programmes or functions, and then examine the impact of health-specific inflation, increased utilization and ageing. From the 1980s until the mid-2000s, prescription drugs were the fastest growing category of health expenditure, and most of this growth was due to a combination of increased utilization, the introduction of new drug therapies and higher prices. In this respect, Canada has had among the highest generic drug prices in the world (perhaps in part due to the lack of generic price regulation at the national level). In contrast, factory gate prices of branded prescription drug are regulated by the PMPRB while CADTH provides provincial governments with a centralized drug assessment and review process for new prescription drugs (Romanow, 2002; McMahon, Morgan & Mitton, 2006). Since 2005, there has been an acceleration in spending on physicians driven more by increases in remuneration than volume. Hospital expenditures have also grown rapidly due mainly to increases in staffing levels, compensation and the increased use of advanced technologies, including advanced diagnostics. In sharp contrast, the growth in prescription drug spending in recent years has been largely due to increases in utilization as opposed to price, due to the maturing of patents as well as a slowing in the rate of new drugs coming on the market relative to previous periods (CIHI, 2011b). 3.2 Sources of revenue and financial flows The principal source of health system finance is taxation by the F/T/P governments (see Fig. 3.6). Since medicare services are exempt from patient payment at the point of service, they are entirely financed by government revenues mainly at the provincial level. The sources of funding for other health goods and services are derived from a combination of taxation, OOP payments and PHI. The vast majority of PHI comes in the form of employment-based insurance that employees are required to take on as part of a given package of remuneration and benefits. Social insurance forms the smallest portion of health funding and is largely used for health benefits for workplace injuries or ailments available under workers’ compensation schemes in the provinces and territories (see section 3.3.2).
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Health Systems in Transition Gregor
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Contents Preface . . . . . . . . .
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Preface The Health Systems in Trans
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Acknowledgements The HiT on Canada
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List of abbreviations Abbreviations
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List of tables and figures Tables p
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Abstract Canada is a high-income co
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The European Observatory on Health
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Canada - World Health Organization Regional Office for Europe

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