canadian medicare presentation at hofstra university

Canadian Medicare Financing & Spending

Presented by Steven A. Rohinsky

Hofstra University MHA Program

Financing

Medicare

Financed by Provincial and Federal Governments

75% Financed through the Public Sector

25% Financed through the Private Sector

Funded through the revenue generated by taxing personal and corporate income.◦ Each Province has different Provincial tax Laws

Funding also through user Premiums◦ Premiums differ from Province to Province

Financing

Medicare Funding

Federal Government ensure “Basic Needs” are paid for.◦ Hospitals◦ Physicians◦ administration

Added benefits given by provincial government, Employer and Private insurers.◦ Eye Care ◦ Dentistry ◦ Home care (including Rehab unless done in hospital)◦ Prescription Drugs

Financing

Medicare

What are governments and Canadians spending?

Where is the growth? What are we spending it on? Whom do we spend it on? How does Canada compare?

Health Spending in Canada

Financing

Spending on health care by Governments and Canadians is projected to be: $148 billion- a 5.8% increase from 2005 10.3% of GDP $4,548 per person

2006 Health Care Spending Highlights

Financing

Components of Growth in Total Health Spending 2006

0.9%

2.1%

2.8%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Increase Due toInflation

Increase Due toPopulation Growth

Real Increase inHealth Spending

5.8%

Financing

**Health Care Spending Outpacing Inflation and Population Growth

2.8% 2.8%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

1976 78 80 82 84 86 88 90 92 94 96 98 00 02 04 2006

Year

ActualForecast

1976-2004 Average (2.5%)

Total Health Expenditure per Capita, Annual Growth Rates in Constant $1997

Source: Canadian Institute for Health Information.

Financing

Total Health Expenditure per Capita (in US$)

Total Health Expenditure % of GDP

Public Share of Total Health Expenditure

Public-sector Health Spending per Capita (in US$)

Canada $3,165 9.9% 69.8% $2,210

U.S. $6,102 15.3% 44.7% $2,727

Note: All numbers represent 2004 data. Spending per capita was converted to U.S. dollars using purchasing-power parities for GDP.

Source: OECD Health Data 2006, October Edition.

Financing

Canada vs. United States

Total Health Expenditure as a Proportion of GDP

8.9%

8.3%

10.0% 10.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

1975 78 81 84 87 90 93 96 99 02 05

Year

ActualForecast

2006

Sources: Canadian Institute for Health Information; Statistics Canada.

Financing

Source: Canadian Institute for Health Information. Note: Data are for 2004.

Non-Consumption

3%

Out-of-Pocket15%

Private Health Insurance

12%

Public Sector

Private Sector

P/T Government

Sector64%

Municipal Government

Sector1%

Social Security Funds

1%

Federal Direct Sector

4%

Who Spends What?

Financing

Public / Private Split

70.8%75.1%

29.2%24.9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Public Sector SharePrivate Sector ShareForecast

77.0%

70.3%

23.0% 29.7%

(% share)

Public- and Private-Sector Shares of Total Health Expenditure


2006

Financing

What Are We Spending It On?

Capital4.1%

Public Health 5.8%

Other Health Spending

6.4% Other Institutions

9.4% Other Professionals 10.6%

Physicians 13.1%

Drugs 17.0%

Hospitals29.8%

Total health expenditure forecast for 2006 = $148 billion

Administration 3.9%


Financing

Changing Look of the Health Care System


13%

9%

60%9%

9%

Hospitals and Physicians

LTC

Other Professionals

Drugs

Other Expenditures

20%

17%43%

11% 9%

Hospitals and Physicians

LTC

Other Professionals

Drugs

Other Expenditures

1976 2006

Financing

Annual Growth on Selected Services in 2006 vs. Average Annual Growth of the Previous 10 Years

5.7%

5.8%

7.1%

6.0%

4.8%

4.8%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

Other Professionals

Hospitals

Other Institutions

Drugs

Physicians

Total HealthSpending

Note: Average annual growth in brackets.


(6.6%)

(5.1%)

(5.5%)

(8.9%)

(5.7%)

(6.3%)

Financing

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

Que. P.E.I. N.L. N.B. B.C. N.S. Sask. Ont. Man. Alta.

Public Private

Y.T.: $6,669N.W.T: $7,300Nun.: $10,285

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000


$per capita Canada $4,548

Total Health Expenditure, Per Capita, Provinces and Territories, 2006


Financing

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000


Public Private

PublicY.K.: $5,297N.W.T: $6,545Nun.: $9,792

Private$1,372$755$493

Total Health Expenditure, Per Capita, Provinces and Territories, 2006


Financing

10.7%

13.1%

10.6%

6.9%

10.8% 10.3%

13.6%

9.8%

13.5%13.2%

10.8%

0%

2%

4%

6%

8%

10%

12%

14%

16%

N.L. P.E.I. N.S. N.B. Que. Ont. Man. Sask. Alta. B.C. Canada

Y.K.: 13.3%N.W.T: 7.6%Nun.: 27.5%

Total Health Expenditure as a Proportion of GDP, 2006


Financing

Total Provincial/Territorial Government Health Expenditures, Per Capita

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

<1 1–64 65+ Total

1998 2004

Age GroupSource: Canadian Institute for Health Information.

Financing

Distribution of Provincial/Territorial Government Health Expenditures by Age Group

3% 3%

54% 53%

43% 44%

0%

10%

20%

30%

40%

50%

60%

1998 2004

<1 1–64 65+


Financing

How Does Canada Compare?

Financing

Health spending is rising◦ …but not as quickly as it was◦ …and the public/private split is still close to 70/30

Spending highest for babies and seniors◦ Proportion spent on seniors has remained

relatively stable On the world stage

◦ Canada is among the world’s top 12 health spenders in terms of health care spending per person

◦ Canada is on par with over half of comparable OECD countries in terms of health care spending as a proportion of GDP

◦ Canada’s public share is less than many comparable countries

Health Spending in Canada

Financing

canadian medicare presentation at hofstra university

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