• Spending overview
• Policy overview
• Diseases overview

Spending overview

Total healthcare expenditure reached an estimated 10.7% of GDP in 2008, continuing a gradual upward trend. By OECD standards, Canada's healthcare spending is still high relative to GDP. After falling during the early 1990s, the share of public-sector spending in total healthcare expenditure has levelled out at about 70%.

Healthcare spending is expected to stabilise over the next five years as a share of GDP, reflecting greater cost consciousness of consumers during the current downturn and government measures to cut down costs to improve fiscal sustainability. The expected turn to a general government deficit for fiscal year 2009/10 (April-March), and a further deterioration in 2010/11, will raise pressure on the government to look for spending constraints, including in the healthcare sector. In the longer term, however, overall healthcare spending should rise substantially as a result of the ageing of the population.

Policy overview

Canada's healthcare system is primarily publicly funded and privately delivered. National health policy is promulgated from the federal government, which sets the general parameters for the public health service and provides the bulk of the funding. Under the system, all medically necessary inpatient and physician services (excluding drugs) are funded by the Medicare system. The sale of private insurance coverage for basic insured services is prohibited, as Medicare has been given a monopoly role. This means that patients wanting to receive preferred treatment in hospitals would have to pay out of pocket. This is intended to ensure equity in access to healthcare. The system leaves much of the population without full public coverage for all of their prescription drug treatment needs. As a result, a burgeoning market for supplementary private insurance has built up. This market is set to grow, given that provinces are highly restrictive when it comes to agreeing reimbursement for new, high-cost drugs.

Canadians are both proud of and attached to their publicly funded system. Given the massive support for the provision of healthcare that is free at the point-of-delivery, any federal government will find it politically difficult to put a greater share of expenditure on consumers, even if this might be desirable to increase incentives for consumers to cut back on unnecessary treatments.

The Canadian healthcare system is, however, at a crossroads. The current system, which demands that all "medically necessary" treatment be funded by the public sector, will come under increasing pressure at the provincial level. Reform of the Canada Health Act is unlikely during the next 5 years, but movement among the provinces to expand the role of the private sector is inevitable. As the public purse struggles to fund the cost of ever-increasing demand for treatment, so demand for supplementary private insurance will grow. However, a complete overhaul that would allow the provision of private basic insurance remains unlikely.

Diseases overview

Average life expectancy at birth has risen from 77.6 years in 1990 to an estimated 81.2 years in 2008 and is projected to rise further to 81.6 years by 2013. Cancer and heart disease account for more than one-half of all deaths, followed by cerebrovascular diseases, chronic lower respiratory diseases and accidents.

Canada's performance on lifestyle factors is mixed. On the one hand, tobacco consumption has fallen substantially. On the other hand, the incidence of obesity (which with a long time lag is associated with health problems such as diabetes, cardiovascular diseases and asthma) is growing. Given that the decline in tobacco use was to a large extent brought about by public policy measures, including awareness campaigns, there are also plans to tackle other lifestyle health threats by public policy measures.

In February 2009, the Canadian Heart Health Strategy and Action Plan, which was set up in 2007, presented recommendations to the government to spend money on awareness and education measures. The recommendations aim at reducing obesity by 20% by 2015 and cut deaths from cardiovascular disease by 25% by 2020. There are also government strategies for cancer and diabetes.

The main prospect for disease trends is that age-related diseases are likely to continue to grow in importance, given the prospective further rise in the average age of the population, both because baby boomers are coming into their years and because of the continued increase in life expectancy.