Canadian Health Care is Unsustainable as Currently Organized

Canadian Health Care is Unsustainable as Currently Organized

OTTAWA, March 9, 2004 – Health care in Canada—which costs more than its counterparts in most developed countries and achieves only middle-of-the-pack results—requires an annual increase of $5 billion just to maintain existing services, The Conference Board of Canada says in a new report released today.

"Health care, as currently funded and delivered, is unsustainable. It is taking up an ever-increasing share of our financial resources, while its outcomes consistently show room for improvement when compared with other developed countries," said Glen Roberts, Director of Health Programs.

"Health care now consumes 32 per cent of provincial and territorial revenues. That share will rise to 44 per cent in 2020, even before the demographic wave of baby boomers begins to wash onto the shore of the health care system. This funding crunch also does not account for emerging factors, such as addressing wait times for care and patient safety, that could further escalate costs."

The report, Understanding Health Care Cost Drivers and Escalators, includes a benchmarking analysis comparing Canada's performance to that of 23 other Organisation for Economic Co-operation and Development (OECD) countries, using a range of 24 health-related indicators. Canada ranks 13th overall, well behind elite performers Switzerland, Sweden and Germany. Yet Canada is the sixth-highest public spender on health care and the third-highest total spender among the OECD countries.

Health care expenditures are forecast to increase by 5.3 per cent annually, or $5 billion, just to deal with structural factors over which the system has minimal control. Inflation accounts for $2 billion alone in additional costs this year. Population growth and an aging population will increase expenditures by approximately $800 million each, and meeting demand for health services from both consumers and providers will require an additional $800 million.

Prescription drugs and home care are two escalators of increasing costs. Pharmaceutical drug costs are rising annually by 9.3 per cent, or $500 million. Governments may need to examine options to control drug costs in the future, such as cost sharing, co-payments and provider incentives on the demand side, and volume purchasing as an alternative on the supply side.

Home care costs, which are projected to increase by 8.7 per cent annually, will require governments to assess the appropriateness of institutional care compared to home care, and balance outcomes with costs.

Overall, health care will continue to consume a greater share of public funds if the current conditions persist.

"Health care in Canada needs a new vision, one focused on making Canada's population the healthiest in the world. This will require a balance of investments in health, health care and the broader determinants of health, such as education and environmental stewardship," said Roberts.

The report was prepared for Alberta Health and Wellness as an independent, third party study of the health care systems. It is available at www.conferenceboard.ca.

For more information contact:Brent Dowdall, Media Relations, Tel: (613) 526-3090 ext. 448E-mail: corpcomm@conferenceboard.ca