Cost of public health care for Canadian families soared by 70% over two decades: report

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Canada’s public health-care costs skyrocket over past two decades says new report
A new report pegs the cost of public health care at nearly $13,000 a year for the average Canadian family. The Fraser Institute says those costs have skyrocketed over the past two decades. Abigail Bimman takes a look at why – Jul 31, 2018

The average Canadian family is expected to pay $12,935 for public health care through taxes this year – and that’s nearly 70 per cent higher than when the data was first made available in 1997.

This according to a new report from the Fraser Institute, which also pegs the average health care cost for single Canadians at $4,640, more than double what it was two decades ago.

“I think a lot of Canadians know they’re paying something for health care, but many don’t know how much they’re paying,” said Bacchus Barua, associate director of the Centre for Health Policy Studies at the Fraser Institute.

“That’s because we never see a bill for health care services, we don’t really have a dedicated health insurance tax and that creates a sort of situation where there’s a misconception that Canadian healthcare is free, which it obviously isn’t.”

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Barua says the report aims to give Canadians spending specifics so they can have more informed conversations about how well the health care system is serving them.

“I think it gives you a very different idea about how you’re assessing whether the system, the wait times, the doctors, the hospitals are actually in line with how much you’re paying.”

Sondra Gilson is well aware that healthcare costs money — and she’s happy to pay into the system.

“Definitely not free, just included in everything else that we pay for.”

The Ottawa mom of two young girls didn’t flinch when Global News told her her family of four is expected to pay $12,935 in healthcare taxes this year.

“I don’t really like to think on a yearly basis,” Gilson said. “I just think when it comes time that somebody needed some major health care, it’s there for us.”

Compared to all other OECD nations, Canadians pay a little more than average.

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‘Doctor in a box’ is changing Canadian health care

Based on 2017 data, Canada’s per capita health care costs are in line with Australia and the United Kingdom. We pay considerably less than Switzerland, and less than half as much as Americans shell out.

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“We’re within range,” said Michael Hunt, director of spending, primary care and strategic initiatives at the Canadian Institute for Health Information.

As for the large increases in health care spending over time, Hunt says they can be better understood by breaking down those expenditures into the three biggest categories: hospitals (28.3 per cent), doctors (15.4 per cent) and drugs (16.4 per cent).

In hospitals, Hunt says 70 per cent of costs come from the human resources department.

“People do get pay increases. Physicians and drugs, it’s about services, times the cost of a service, so we do see some increases in services overall,” Hunt said.

In the drug realm, innovation and new pharmaceuticals drive up spending. Hunt points to new anti-viral treatments for Hepatitis C as an example.

“There’s good reasons why we see increases in expenditures over time.”

While there’s much talk and concern about an aging baby boomer population or even a “grey tsunami,” Hunt says the aging population only accounts for about one per cent in overall health care spending increases.

If the increases are relatively easy to explain, value for dollar is tougher to quantify.

READ MORE: Canada will study national pharmacare. Here’s how other jurisdictions do it.

“At this point in time, Canadian health is probably quite reasonable and life expectancies are similar to the rest of the world. I don’t think we really answer the value for money question. I don’t think anybody can really answer that precisely,” said Hunt.

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The Fraser Institute hopes its new report will take a stab at that by providing information that sparks a conversation.

“We can have different discussions about whether the sort of overcrowding that we see in hospitals is actually in line with the amount of money that we’re spending.”

“We’ve followed a long policy of ‘throw more money at the problem’ and one of the ways that governments can do it is by hiding how much money they’re actually putting into the system, or how much money the average family is actually paying,” Barua said.

Hunt says we can expect costs to continue to climb, even though efforts are being made to reduce them, by purchasing generic drugs and cutting hospital stays, as examples. CIHI will release a new report on health care spending increases this fall.



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