Province expected to spend nearly $42 billion on health care in ’23

By Al Beeber - Lethbridge Herald on November 2, 2023.

Herald photo by Al Beeber A person walks into Chinook Regional Hospital last week. A report by the Canadian Institute for Health Information says Alberta is expected to spend about $41.9 billion on health care in 2023.

LETHBRIDGE HERALDabeeber@lethbridgeherald.com

A report released Wednesday shows Alberta is expected to spend about $41.9 billion on health care this year.

The Canadian Institute for Health Information says this amounts to around $9,000 per Albertan.

The report says Canada as a whole is expected to spend $344 billion on health care this year which is an increase of 2.8 per cent – or $9 billion from 2022 – with more than half of that spending going directly to hospitals, physicians and drugs.

Health spending in the country last year slowed with a 1.5 per cent growth rate after stronger rates of growth of 7.8 per cent in 2021 and 13.2 per cent in 2020. This growth is attributed to the national response to the COVID-19 pandemic.

The CIHI report says efforts to clear surgical backlogs and wait times because of the COVID-19 pandemic are driving growth in spending in the hospitals and physicians categories. Hospital expenditures this year are expected to increase 4.1 per cent this year while physician spending growth is estimated at 6.9 per cent.

“Health spending growth has slowed since the peak of the pandemic,” said Ann Chapman, director of Spending and Primary Care at CIHI in a press release. “Staffing shortages in hospitals, the increased need for both hospital and physician services, contract renewals in an environment of persistently high inflation and population aging may be key drivers of health spending in the coming years.”

CIHI says the growth in health spending this year and in 2022 hasn’t kept pace with inflation and population growth. It says this may be due in part to high inflation rates that haven’t been seen since the 1980s, noting that all economic sectors including health care, have been impacted by price inflation. It says because health care service prices are negotiated and locked into multi-year contracts, health inflation will tend to lag behind inflation in the general economy.

“During the first two-and-a-half years of the pandemic, about 743,000 (13 per cent) fewer surgeries were performed in Canada (not including Quebec) compared with before the pandemic. As a result, hospital spending grew modestly, at 2.1 per cent in 2020. Efforts to reduce backlogs and wait times, along with delayed demand for hospital services, contributed to a rebound in spending growth. Hospital expenditures are projected to increase by 11.1 per cent in 2022 and 4.1 per cent in 2023,” says CIHI.

“In 2020, physician spending decreased by 3.7 per cent. This was due in large part to the deferral of care (e.g., delaying routine visits for chronic illnesses, laboratory tests and screenings) because of the pandemic.

“As services gradually resumed, growth in physician spending recovered. Physician spending growth was 6.4 per cent in 2021 and is estimated to be 9.5 per cent in 2022 and 6.9 per cent in 2023. Continued increases in the need for physician services and inflationary pressure during contract renewals will be key drivers of physician expenditures in the future,” it notes.

Total drug spending is expected to increase 4.1 per cent this year. CIHI says that drugs used to treat cystic fibrosis and diabetes, specifically the drugs Trikafta and Ozempic, were the top contributors to the growth in public drug program spending last year.

Among 38 countries in the Organization for Economic Co-operation and Development, Canada’s ratio of health spending to Gross Domestic Product was 12.3 per cent in 2021. The U.S. had the highest ratio of 17.4 per cent. Canada’s ratio was comparable to the United Kingdom at 12.4 per cent and France which had the same ratio as Canada.

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