Health Care Financing in Canada Pols 321 Lecture 4

Topics Federal-Provincial Financial Arrangements Distribution of Health Care Expenditures Reform Trends

Federal-Provincial Financial Arrangements

EPF: The beginning of the end... effectively ended the 50/50 cost sharing arrangements –put hospitals, medical care and post secondary education under one funding formula –combination of tax points and cash (tied to growth in GNP and population) –federal government reduced cash transfers by GDP -2 in 1986/87, GDP -3 in 1989/90, and froze the transfers in 1990/91

Canada Health Act Ottawa introduces the Canada Health Act –retains the five principles –consolidates the two previous pieces of legislation –penalizes the provinces for allowing extra- billing by reducing EPF payments –came before an election

CHST rolls CAP and EPF into a single block fund places a ceiling for 1996/97 of $ 26.9 billion 1997/98 and beyond to be determined through negotiations CHA principles and CAP residency requirements continue to apply

CHST ( $ billion)

Distribution of Health Care Expenditures

Public vs. Private

Registered Nursing Workforce, Canada, 1980 to 2007 Notes In 1988, the decrease is largely attributed to a substantial increase in the number of employment status Not Stated records in the Ontario data for that year. In 2000, the increase is partially attributed to the identification of comparatively fewer duplicates in the Ontario and Quebec data that year. In 2003, the increase is partially attributed to methodological changes in the submission of data that year. Source Regulated Nursing Database, Canadian Institute for Health Information Registered Nursing Workforce, Canada, 1980 to 2007

Registered Nursing Workforce, by Jurisdiction and Canada, 2003 to % Change N.L.5,4305,4525,4965,5155,5742.7% P.E.I.1,3731,3771,4431,4281,4354.5% N.S.8,4988,6028,7338,7908,8434.1% N.B.7,1867,3757,5267,6807,7267.5% Que.62,49463,45563,82764,01464,9553.9% Ont.85,18786,09989,42990,06190,9786.8% Man.10,03410,62810,81110,90210,8257.9% Sask.8,5038,4818,5498,4808,6692.0% Alta.24,03725,60026,35526,75227, % B.C.27,71128,28927,81428,84030,0598.5% Y.T % N.W.T./Nun ,0331, % Canada241,415246,571251,242253,819257,9616.9%

Licensed Practical Nursing Workforce, by Jurisdiction and Canada, 2003 to % Change N.L.2,7192,7102,6982,6392, % P.E.I % N.S.3,0223,0583,1273,1743,1604.6% N.B.2,4292,5562,6332,6462, % Que.14,83115,47216,29317,10417, % Ont.25,73024,46724,45825,08426,1261.5% Man.2,4172,4152,5902,6522, % Sask.2,0562,1312,1942,2242, % Alta.4,7665,0515,3135,6145, % B.C.4,3914,8114,8845,4125, % Y.T % N.W.T % Canada63,13863,44364,95367,30069, %

Nurse Practitioner Workforce, by Jurisdiction and Canada, 2003 to N.L P.E.I.----* N.S N.B Que.---1† Ont Man.--**31 Sask Alta B.C.--*3550 Y.T N.W.T./Nun Canada ,1291,346

Reform Trends

Trends: Hospitals ( ) Total number of beds declined from 7.0 to 6.5/1000 (2.9 in 2007) Alberta - government targeted 2.4/100. Capital Health actually achieved 1.4(1.6)/1000.

Trends: Hospitals (cont.) Nationally (1986/ ) –1994/ public, 22 private and 55 federal –total approved beds: 156,547 (98% public) –Number of hospitals fell by 14 % or from beds/1000 (11%). (actually a 30% declined in staffed beds) – 2.9 in 2007 –Average annual growth in operating expenses was 8 % (-2.4 % between 1991/92 and 1994/95)

Trends: Hospitals (cont.) Outpatient vs. Inpatient (1986/87,1993/94) –outpatient days: increased by 15% –inpatient days declined by 17% –day surgery increased by 37% –visits to emergency wards increased by 1% –Alberta: ratio of outpatient visits to inpatient days increased by 130%

Trends: Hospitals (cont.) Factors contributing to growth in costs: –wage and price inflation (national and sector specific –economic downturn –unionization –professionalism –increasing population aging –rising costs per admission (intensity of servicing/technology, decreasing productivity)

Trends: Physicians ( ) # increased at at annual rate of 2% cost of services/patient increased by 10% annually (1979/80, 1990/91) 10% reduction in medical school enrollment increasing service intensity declining utilization cost per patient increased at 10%/annum (50% attributable to GPs)

Trends: Pharmaceuticals (1987/91) Total expenditures increased by 55.(%> 10%/annum (not including drugs dispensed in hospitals) new drugs are more costly than existing drugs cost or volume? Price, volume and quantity have all increased

Summary Cost drivers: –economy-wide wage and price inflation accounts for 50% –population growth 10% –aging 5 % –wage and prices (health) 20% –inpatient/outpatient –higher service intensity 5% –lower productivity 10%

Summary Proportion of private vs. public has been relatively stable over time although there is a definite downward trend in percentage of public expenditures Definite upward trend in percentage of total public expenditures devoted to health care Upward trend in health expenditures as a percentage of GDP

Internet Sources w_page=home_ehttp://secure.cihi.ca/cihiweb/dispPage.jsp?c w_page=home_e eng.asphttp:// eng.asp