Health care spending in Canada saw an increase of nearly $100 billion in a 20-year span, according to a new report released by the Canadian Institute for Health Information.

Canada spent an estimated $130 billion on health care in 2004, up from $37 billion in 1984, the year Parliament passed the Canada Health Act to discourage extra billing by physicians and hospital user fees, the CIHI reports.

Together, population growth and health sector inflation account for more than half this increase, the CIHI says.

During the two-decade span, Canada's population increased by 6.2 million people, explaining 14 per cent of the increase, or $13 billion.

Health sector inflation accounts for another 45 per cent of growth in health spending since 1984, or $42 billion.

"In addition to population growth and inflation, changing patterns of practice, as well as new drug therapies and other innovations, help to explain why Canada now spends more on health care than we did two decades ago," Jennifer Zelmer, CIHI Vice President of Research and Analysis said in a statement Wednesday.

Private-sector spending

According to CIHI, private-sector spending on health care reached $34.5 billion in Canada in 2002.

Individual Canadians paid nearly half of that total out-of-pocket cost, an estimated $17 billion, while private insurance covered the rest.

Between 1998 and 2002, out-of-pocket spending by Canadians rose nearly 28 per cent, while spending by private health insurance companies saw an increase of 51 per cent.

The bulk of out-of-pocket spending by Canadians in 2002 went to the following:

• Dental care ($3.4 billion)
• Prescribed drugs ($2.9 billion)
• Nursing homes and other institutions ($3.0 billion)
• Vision care ($2.0 billion)

At 15 per cent of total health expenditure in 2002, Canada's out-of-pocket spending ranks in the middle of other Organisation for Economic Co-operation and Development (OECD) countries.

The ranking is similar to that of the United States at 14 per cent, but greater than France and Germany at 10 per cent, and less than Italy (20 per cent) and Japan (17 per cent).

Funding breakdown

According to the report, Canada funds hospital and physician services almost entirely through taxes.

The public-sector share of spending for these services was 93 per cent and 98 per cent, respectively, in 2003.

In contrast, the percentage of public funding for physician services was lower in France (74 per cent) and Germany (85 per cent) in 2003.

Meanwhile, public funding for hospitals in Germany at 84 per cent in 2003 was also lower than in Canada.

However, France's public funding at 92 per cent was comparable to Canada's.

"When considering the balance of public and private spending in the health system, it is important to consider what the system does and does not cover when compared to others," Glenda Yeates, CIHI President and CEO said in a release.

"The public/private question is much more complex than the overall funding split, given that each country has made its own decisions as to where to allocate public funds."

The report also shows that 70 per cent of Canada's total health spending came through the public sector in 2003, less than in the United Kingdom (83 per cent), Germany (78 per cent) and France (76 per cent).

However, Canada's public share of health spending was more than that of the United States (45 per cent) and the Netherlands (62 per cent).

Regional differences in healthcare costs

• Canadian households reported spending an average of $268 out-of-pocket on prescription drugs in 2003. The average among the provinces varied from $200 in Ontario to $427 in Prince Edward Island. Residents in the territories reported the lowest average out-of-pocket spending.
• In a 2003 Statistics Canada survey, 65 per cent of home care recipients in Manitoba said they had some or all of their care covered by public funding, compared to 42 per cent in British Columbia.
• Ontario and the Northwest Territories cover flu shots for all residents. All jurisdictions except Prince Edward Island pay for flu shots for some residents. Most cover at-risk individuals, seniors and health care workers.