Growth of health care spending in Canada slowing down, report says

OTTAWA - Growth in health-care spending is forecast to continue to slow this year, largely because of a sluggish economy and budgetary deficits, says a newly released report.

The report, from the Canadian Institute for Health Information, says health-care spending is expected to increase by 3.4 per cent this year, after rising at an average of seven per cent a year during the period from 1998 to 2008.

That would make 2012 the year with the lowest rate of growth since the mid-1990s.

"We're in a period of more modest economic growth times these days," Christopher Kuchciak, CIHI's manager of health expenditures, said in an interview.

"With slower growth, as well as government budget deficits that we see across the country, the focus seems to be nowadays more on cost control and cost containment."

The report shows health-care costs have doubled in the past decade, and are expected to reach $207 billion this year — up from $200 billion last year.

One of the biggest drivers of the rising costs in recent years has been the fees paid to physicians. However, the report says payments to physicians are expected to increase by 3.6 per cent this year, while hospital spending is forecast to grow by 3.1 per cent — the lowest rates of growth since the late 1990s.

The growth rate for drug spending is also expected to be down from last year. The slowdown is part of a decade-long trend that's likely a result of fewer drugs coming onto the market, blockbuster drugs coming off patent and provinces and territories putting in place generic price controls, the report says.

Kuchciak said this latest slowdown in growth stands in contrast to the mid-1990s, when people worried about fewer hospital beds and staff.

"There was that period in the mid-90s when we saw that cost constraint and budget deficit and cost-control measures," he said.

"It looks like we're entering another period where money is tight and people are looking at cost-effective ways — rather than going back to the mid-90s, when there were more drastic measures taking place."

The provinces and territories are expected to spend $135 billion on health care this year. The report says spending varies across the country. Spending per person is highest in Newfoundland and Labrador and Alberta, and lowest in Quebec and British Columbia.

The report notes an aging population was responsible for just 0.9 per cent of the cost increases between 2000 and 2010.

"We hear a lot about this grey tsunami ... that's just going to swamp the health-care system," Kuchciak said.

"But what we're seeing is, really, population aging is more like a glacier. It moves, but it moves slowly and the health-care system can evolve. And we do see steps being taken by those policy-makers and decision-makers to evolve and change the way they deliver health care in order to control those costs."