The Sustainability of Canadian Provincial Government Health Spending: An Expenditure Category Approach

Similar documents
Is There a Roemer s Law for Physicians? Physician Numbers As a Driver of Provincial Government Health Spending

Meeting the Care Needs of Canada s Aging Population.

Health Care Expenditures and Cost Drivers in Canada

LABOUR FORCE STATISTICS REPORT MAY 2018

LABOUR FORCE STATISTICS REPORT APRIL 2018

LABOUR FORCE STATISTICS REPORT OCTOBER 2018

LABOUR FORCE STATISTICS REPORT AUGUST 2018

CANM-CAMRT JOINT ANNUAL CONFERENCE MARCH 22-24, 2018 VANCOUVER, B.C.

Provincial Government Health Spending and Value for Money: An Overview of Canadian Trends,

COMMON DETERMINANTS AND COST- DRIVERS OF PROVINCIAL GOVERNMENT HEALTH EXPENDITURES

151 Slater Street, Suite 710 Ottawa, Ontario K1P 5H , Fax September, 2012

Fiscal Federalism in Canada

ALBERTA FORECAST HOW LONG WILL IT LAST?

April An Analysis of Saskatchewan s Productivity, : Capital Intensity Growth Drives Strong Labour Productivity Performance CENTRE FOR

Selected Demographic and Economic Characteristics of the Aboriginal Population in Saskatchewan

April An Analysis of Prince Edward Island s Productivity, : Falling Multifactor Productivity Dampens Labour Productivity Growth

April An Analysis of Nova Scotia s Productivity Performance, : Strong Growth, Low Levels CENTRE FOR LIVING STANDARDS

An overview of recent macroeconomic developments in Canada

Budget Paper B FINANCIAL REVIEW AND STATISTICS

CONSUMER PRICE INDEX REPORT NOVEMBER 2017

April 2011 CENTRE FOR LIVING STANDARDS. CSLS Research Report i. Christopher Ross THE STUDY OF

The National Physician Database: Data and Reports 2006 National Meeting on Physician Compensation Vancouver, British Columbia, Canada

The Current and Future Contribution of the Aboriginal Community to the Economy of Saskatchewan

CONSUMER PRICE INDEX REPORT OCTOBER 2017

ISBN Legal deposit Bibliothèque nationale du Québec, Publication date: October Web site:

Provincial Debt Summary

Physician Services Analysis

Comparing Alberta s Economic and Fiscal Performance with Other North American Energy Jurisdictions

ECON 361: Income Distributions and Problems of Inequality

CHAPTER 4: GROWTH, UNEMPLOYMENT, AND INFLATION

Unless otherwise indicated, this product uses data provided by Canada s provinces and territories.

TAXING QUESTIONS ABOUT PROPERTY TAXATION

North American Economic Outlook: Gradual Though Sustained Recovery

The Budgetary Process Supporting the Pre-election Report

June Decentralization, Provincial Tax Autonomy and Equalization in Canada

Edmonton Real Estate Forum. Ron Gilbertson President and CEO Edmonton Economic Development Corporation

Recent Trends in Saskatchewan s Labour Market: Implications for PSE

Tobacco tax policy in Ontario

Submission to the Minimum Wage Review Committee Labour Standards Nova Scotia Department of Environment and Labour

THE QUÉBEC ECONOMIC PLAN NOVEMBER 2017 UPDATE TABLES AND CHARTS

THE QUÉBEC ECONOMIC PLAN. March The Generations Fund BUDGET Québec Is Repaying Its Debt

North American Economic Outlook: Climbing Out of Recession

January 12, Minimum Wage Review Committee Report

Usage of Sickness Benefits

TAX FACTS What s Inside. Quick Estimates. RRSP, RPP and DPSP Limits. Top Personal Rates for CPP, EI and QPIP Rates

LABOUR MARKET TRENDS IN SASKATCHEWAN

Budget Paper D TAXATION ADJUSTMENTS

Releases. New products and studies 8

Discussion paper. Personal. Income. Tax Reduction. Gouvernement du Québec Ministère des Finances

Consultations. Board s Excessive Price Guidelines

Some provinces now face the downside of tight labour markets

A STATISTICAL PROFILE OF WOMEN IN THE SASKATCHEWAN LABOUR MARKET

Summary Public School Indicators for the Provinces and Territories, to

Model of Long-Term Health Care Cost Trends in Canada

CCHS and NPHS An improved Health Survey Program at Statistics Canada

Household Credit Analysis

Early, But Fundamentally Correct

Canadian Fiscal Federalism and the Dual VAT

Provincial Taxation of High Incomes: What are the Impacts on Equity and Tax Revenue?

Québec s Economy and Public Finances

Hold the Applause: Why Provincial Restraint on Healthcare Spending Might Not Last

An Evaluation of the 1977 Canadian Firearm Legislation: Robbery Involving a Firearm

North American Economic Outlook: Will the Recovery Be Sustained? U.S. Economic Outlook:

D.B.S. MEMORANDUM. Dominion Bateau of Statistics, Ottawa, Canada. FThNCLL ST ISi IC OF iiunicii-'l GOViU1ENTS. SUMMaRY OF

Canada In a Messy World By Avery Shenfeld, Chief Economist & Managing Director

ECONOMIC GROWTH AND THE PUBLIC SECTOR: A COMPARISON OF CANADA AND ITALY, 1870 TO 2013

DELIVERING DIVIDENDS OF A STRONG ECONOMY

Appendices BUDGET '97 BUILDING ALBERTA TOGETHER

Challenges Facing Canada in the Areas of Productivity, Innovation, and Investment 1

December 8, Minimum Wage Review Committee Report

The Oil Shock: How Shocking Is It? By Avery Shenfeld, Chief Economist & Managing Director

Debt Statistics 1997/98

FINANCIAL STATISTICS OF PROVINCIAL GOVERNMENTS 1956

Alberta back in the saddle: to lead all provinces in growth in 2017

Debt Management Branch & Capital Markets Funding for the Province of BC. May 2018

The R Word. Benjamin Tal Senior Economist. April 2008 Economics & Strategy

Jobs for Today and Tomorrow

Retirement: Ready or Not? Benjamin Tal. F o r e c a s t

BC ECONOMIC BACK DROP AND DEMOGRAPHICS

PROPERTIES OF SUCCESS NOV 17, 2008 Q INSTITUTIONAL INVESTOR PRESENTATION

February 22, Minimum Wage Review Committee Report

IMBA CONFERENCE April 2011

MRF 2004 RESOURCE LIMITED PARTNERSHIP

THE FEASIBILITY OF REGIONALLY DIFFERENTIATED FISCAL POLICIES

Federal Fiscal Balances and Redistribution in Canada,

When and How Much. Robert Clark Natural Resources Canada

The Impact of the CHST on Interprovincial Redistribution in Canada

Strong Fiscal Management Pays Dividends

Fiscal Needs and the CHST Per Capita Division Rule

The Fiscal Sustainability of Canadian Publicly Funded Healthcare Systems and the Policy Response to the Fiscal Gap

Agricultural Property TaxConcessionsand GovernmentTransfers toagriculture. October 2000

Employment Insurance. EI Monitoring and Assessment Report CEIC E

HOUSING MARKET OUTLOOK Canada Edition

FINANCIAL STATISTICS OF PROVINCIAL GOVERNMENTS

John Jacobs May Time for a Real Raise: The Nova Scotia Minimum Wage

Understanding Drug Formulary Listing Decisions in Canada: a Logistic Model. Charles Thompson Candidate, MSc. University of Ottawa

CANADA. LuS kot NE PA 1:41 STATISTICAL REPORT ON THE OPERATION OF THE UNEMPLOYMENT INSURANCE ACT APRIL 1961

DEPARTMENT OF ECONOMICS THE UNIVERSITY OF NEW BRUNSWICK FREDERICTON, CANADA

Federal Transfer Programs to the Provinces

I Summary of Estimates (First Analysis) 1963

Transcription:

The Sustainability of Canadian Provincial Government Health Spending: An Expenditure Category Approach Livio Di Matteo, Economics, Lakehead University Presentation Prepared for the Meetings of the Canadian Economics Association, Ottawa, June 2-5, 2011

Outline Introduction Recent trends in government health expenditure What is health expenditure sustainability Concept and measures Evidence on total government health spending An expenditure category approach Some health care expenditures are more sustainable than others

Introduction Recent Trends in Government Health Expenditure

Trends in Provincial Government Health Expenditure Recent trends show an acceleration in the expenditure curve Rising share of provincial government budgets devoted to health

Health Spending is Rising 4000 Real Per Capita Provincial Government Health Spending: 1975-2010 3500 1997 dollars 3000 2500 2000 1500 1000 500 NFLD&L PEI NS NB QUE ONT MAN SASK ALTA BC 0 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976 1975

Recent Growth Rates Higher than 1990s 20.00 Growth Rates of Real Per Capita Provincial Government Health Expenditures: 1975-2010 15.00 NFLD&L 10.00 PEI NS Percent 5.00 0.00-5.00 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Average Median NB QUE ONT MAN SASK ALTA BC -10.00-15.00

Increases Also Depend on Province 250 Ranked Percent Growth in Real Per Capita Provincial Government Health Expenditures: 1975-2009 200 150 100 50 203 175 174 132 131 123 112 101 89 88 0 NFLD NB NS SASK MAN PEI ALTA ONT BC QUE

What is health expenditure sustainability?

Defining Sustainability Sustainability a term with many dimensions: Maintaining a quality health care system Fair access to health care Being able to pay for equitable access and quality Fiscal sustainability means having the money to pay for what you want to do both at present and in the future Marchildon et. al., (2004: 3) the sufficiency of resources over the long term to provide timely access to quality services that address Canadians evolving health needs. Fiscally sustainable health spending is where the health needs of all members of the population both current and future can be met with current tax and expenditure settings.

Measures Is H/GDP ratio rising? Is H/G ratio rising? Compare expenditure growth rates (h) to resource base growth measures (r): Growth of real per capita provincial government health expenditures Growth of real per capita income Growth of real per capita total provincial government revenues Growth of real per capita federal cash transfers If h>r, there is a sustainability problem.

Rising share of GDP 14.0 Provincial Government Health Spending as a Share of GDP: 1981-2010 12.0 10.0 8.0 6.0 4.0 2.0 0.0 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2010 Percent NFLD&L PEI NS NB QUE ONT MAN SASK ALTA BC

Rising share of government spending 50.0 Provincial Government Health Spending as a Share of Program Spending: 1975-2010 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2010 percent NFLD&L PEI NS NB QUE ONT MAN SASK ALTA BC

Is It Simply A Revenue Problem? Real Per Capita Provincial Government Revenue(1997$) Provincial Revenue to GDP (%) 12000 40.0 10000 35.0 NFLD & L 30.0 NFLD & L 8000 PEI NS 25.0 PEI NS NB NB 6000 QUE 20.0 QUE 4000 ONT MAN SASK ALTA 15.0 10.0 ONT MAN SASK ALTA 2000 BC 5.0 BC 0 0.0 1975 1985 1995 2005 2015 1970 1980 1990 2000 2010

Canadian Provincial Growth Rates: 1965-2008 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 4.2 4.3 2.4 2.4 3.1 3.0 3.5 3.6 Average Median Real Per Capita Health Real Per Capita GDP Real Per Capita Federal Transfers Real Per Capita Provincial Revenues

Criticisms of this approach to sustainability Figures for 1965-2008 include the first decade of public health care: atypical upward spending bias due to start-up Only looks at provincial government health spending from a total perspective one needs to break the spending down by categories as well as province. The best answer to the question of whether Canadian health care spending is sustainable is: It depends

An expenditure category approach

Distribution of Public Sector Health Expenditures in Canada: 2010 5% 9% 9% 1% Hospitals 2% 8% Other Institutions Physicians 37% Other Professionals 19% 10% Drugs Capital Public Health Administration All Other Health

Framing the Issue: Expenditure Category Approach 16.00 Average Annual Growth Rates for Resource Indicators & Government Health Expenditures for Canada's Provinces: 1976-2008 Percent 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 GDP PROV REV FED CASH TRN PG HEALTH EX Hospitals Other Inst Physicians Other Prof Drugs Capital Public Health Administration All other health Category

Hospitals 1600.00 Real Per Capita Provincial Government Hospital Expenditure 1400.00 1200.00 1000.00 800.00 600.00 NFLD PEI NS NB QUE ONT MAN SASK ALTA BC 400.00 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Hospital Growth 160 140 120 100 80 60 40 20 0 152 Ranked Percent Growth in Real Per Capita Provincial Government Hospital Expenditures: 1975-2009 124 104 61 60 60 52 44 33 22 NFLD NB NS PEI MAN BC ALTA SASK ONT QUE

Ranked Hospital Spending 2,500 2,000 1,500 Nominal Per Capita Provincial Government Hospital Spending ($): 2010 2,211 1,979 1,907 1,749 1,736 1,616 1,569 1,559 1,287 1,265 1,000 500 0 NFLD ALTA NB MAN NS PEI SASK BC ONT QUE

What are the key drivers for health expenditure by category? Regression approach Pooled provincial times series and cross-sections H it =f(z it ) H it =a o + a 1 Z 1t + a 2 Z 2t + a 3 Z 3t + a n Z nt + u it

Dependent Variables Rhltpgc Real per capita provincial government health expenditures in 1997 dollars. Deflated using the Government Current Expenditure Implicit Price Index. By Categories: rpghospc, rpgothinstc, rpgphysc, rpgothprofc, rpgdrugsc, rpgcapitalc, rpgpubhltc, rpgadminc, rpgothhltc

Independent Variables

Estimation Technique Very simple first approach Log-Linear model Ordinary Least Squares used on pooled time-series data

Discussion of Results-1 Time trend a major and significant positive influence for all categories except other institutions, public health and capital. Annual increases ranges from 1.6% (other health professionals) to 10.6%(drugs). Real per capita income is a positive and significant determinant of total provincial government health as well as the specific categories of hospitals, physicians, capital and administration. Real per capita transfers are a positive and significant determinant of total spending, as well as hospitals, other institutions, physicians and administration. However, transfers are negatively and significantly related to other professional health spending.

Discussion of Results-II Population variable negative and significant effect on real per capita provincial government health spending for total health spending, hospitals, other institutions, physicians, administration and all other health. Economies of scale? Population is positive and significant for the categories of other professionals and public health where it appears that more people drives up per capita costs.

Discussion of Results-III For hospitals, expenditures are positively and significantly related to the proportion of population aged 65 to 74 but negatively and significantly related to the proportion aged 75 years and over. Physicians will see an expenditure impact from the growing proportion of population aged 65 years and over but the effect of those aged 75 years and over is not statistically significant. Pattern of rapidly rising costs in the 65 to 74 year age category and then reductions with increases in the proportion aged 75 years and over also effects drugs and administration.

Discussion of Results-IV Debt interest variable was negative and significant for total health spending, hospitals, physicians, drugs, and public health suggesting that the fiscal dividend from balanced budgets and lower interest rates was directed into health but specifically into these expenditure categories.

Is Provincial Government Health Spending Sustainable? It depends on: Economic growth and its effect on per capita GDP and transfer payments Provincial debt/fiscal situations Population size Policy responses to cost increases Technological extension (and perhaps joint effects with aging?) What province you live in: Most sustainable: Ont, BC, Que Least sustainable: Nfld, NB, NS What category of health spending you are looking at: Most sustainable: Hospitals, Physicians, Other Prof Least sustainable: All other Health, Capital Drugs

Questions?