Canada’s high level of health-care spending not producing high performance

With continued and rapid spending increases across the country, the majority of Canadian governments are projected to run deficits in 2023. With health care as the largest area of spending for provinces, it comes as little surprise that new data from the OECD rank Canada’s health-care spending among the highest in the developed world.

In 2021 (the latest year of available data), the OECD reported that total (public and private) health-care spending in Canada reached 12.3 per cent of the economy. When compared to 29 other wealthy countries with universal health-care systems, Canada ranked as the third-highest spender, behind only the United Kingdom (at 12.4 per cent) and Germany (12.9 per cent).

While growth in inflation-adjusted health-care spending in 2022 is expected to slow, taxpayers will be on the hook for continued spending increases through higher taxes imposed either today or in the future. Moreover, this spending situation is unlikely to improve as the country continues to age. As the senior population increases in Canada, there will be significant upward pressure on provincial health-care budgets because seniors use more health-care resources than other age groups. In fact, according to the Canadian Institute for Health Information (CIHI), while seniors comprised 18 per cent of the population in 2019 they consumed 45 per cent of all provincial public-sector health-care spending.

Despite these mounting pressures, higher health-care spending hasn’t translated into better performance. This is especially obvious when Canada is compared to other wealthy countries with universal health care.

Consider a recent report with data from 2020, which shows that despite Canada ranking as one of the highest spenders among wealthy countries with universal health care, it lagged on the availability of physicians, hospital beds, MRIs and other technologies. Specifically, Canada ranked 28th out of 30 countries (with 2.8 physicians per 1,000 people); 23rd out of 28 countries for hospital beds (with 2.2 per 1,000 people); 26th of 29 countries on MRIs (with 10.3 per million people); and 27th out of 30 countries for CT scanners (with 15.0 per million people).

Canada’s high level of spending also did not translate into faster access to services. In 2020, Canadians ranked 10th of 10 countries in terms of access to specialist visits in less than four weeks (at 38 per cent) and scheduled surgeries in less than four months (at 62 per cent). Canada has also consistently ranked poorly compared to other universal health-care countries on these waits for care, which means the 2020 results are not anomalous due to COVID.

Despite this underperformance, Canada continues to have one of the most expensive health-care systems in the world. Canada must look beyond its borders and learn from other high-performing health-care systems if it wants so see improvements here at home.