Paying More, Getting Less 2005

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If recent trends in the annual growth rates for provincial public health-care expenditure and total provincial government revenue from all sources are used to project future growth in these measures, it becomes evident that health-care financing as it is currently structured in Canada is not financially sustainable. Health spending has been growing faster on average than revenue in all provinces for a long time and has also outpaced inflation and economic growth. This has resulted in health care taking up an increasing share of provincial revenue over time.

The analysis of this paper shows that if provincial governments continue to pursue policies that lead to the same rates of growth in health spending and revenue that have been observed in the recent past, public health-care expenditure will soon exceed their capacity to pay. Based on the most recent five-year trends, in seven out of 10 provinces public health spending is on pace to consume more than half of total revenue from all sources by the year 2022, two thirds by the year 2032 and all of provincial revenue by 2050. And, these projections do not take into account the added pressures from an aging population that will further accelerate the growth of provincial health spending as a percentage of total revenue and cause these sustainability dates to occur much earlier.

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