Paying More, Getting Less 2006

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This study is The Fraser Institute's third annual report on the financial sustainability of provincial public health insurance. Every year the data are updated and new projections generated. This year's analysis again uses the most recent five-year trends in the annual growth rates for total provincial public expenditure on health care and total provincial government revenue from all sources to project future growth in these measures. The results confirm 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, despite higher tax burdens in each of the provinces as well as government policies that restrict access to medically necessary goods and services.

The analysis in this study show 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 expenditures will soon exceed the capacity of governments to pay for them. Based on the most recent five-year trends, public health spending in six of 10 provinces is on pace to consume more than half of total revenue from all sources by the year 2020, two thirds by the year 2035, and all of provincial revenue by 2050. Last year, public spending on health care in seven of 10 provinces was on pace to consume more than half of total revenues by 2022, two thirds by the year 2032, and all of provincial revenue by 2050.

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