5.0 Provincial and Territorial Government Health Expenditure by Age and Sex

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1 5.0 Provincial and Territorial Government Health Expenditure by Age and Sex CIHI has been collecting actual utilization data since 1996 from national and provincial/territorial administrative databases for the major categories of service delivered by provincial and territorial governments. The estimates for five major categories hospitals, physicians, drugs, other institutions and other professionals are presented in the Series E data tables of this report. 5.1 Standardization for Age and Sex Similarities in provincial and territorial government per capita health expenditures arise in large part because of universal coverage for medically necessary hospital and physician services under the Canada Health Act. However, each jurisdiction has different population age and sex profiles, which could lead to systematic differences in total expenditure (even if per capita expenditure were virtually the same for each age and sex group). Standardizing expenditure to a common population distribution provides a means of measuring differences that result from utilization and prices. Total provincial/territorial government expenditure per capita, standardized for age and sex, is compared in Table 7. The data shows both actual and standardized expenditures from 2008 to 2011 (the latest year for which age sex data is available). Standardized expenditures were calculated by multiplying the male and female population of Canada in each of 19 age groups by the expenditure per capita for each age group in each province and territory and dividing the product by the population of Canada. Percentage differences between actual and standardized expenditure tend to be most pronounced in Alberta and the territories. Alberta and the territories have lower-than-average percentages of their populations older than 65, which accounts for their increases in per capita expenditure when standardized to the national population. Ontario shows little difference between actual and standardized expenditure, due to its large share of the total population. Most other provinces show lower expenditure per capita when data is standardized. 51

2 52 Table 7: Total Provincial/Territorial Government Health Expenditure per Capita, Standardized for Age and Sex, by Province/Territory and Canada, 2008 to 2011 Actual Standardized Percentage Change Actual Standardized Percentage Change Actual Standardized Percentage Change Actual Standardized Percentage Change N.L. 3,930 3, % 4,328 4, % 4,763 4, % 5,061 4, % P.E.I. 3,252 3, % 3,635 3, % 3,920 3, % 4,291 4, % N.S. 3,459 3, % 3,522 3, % 3,836 3, % 4,073 3, % N.B. 3,516 3, % 3,710 3, % 3,887 3, % 4,104 3, % Que. 3,023 2, % 3,215 3, % 3,325 3, % 3,443 3, % Ont. 3,297 3, % 3,479 3, % 3,600 3, % 3,657 3, % Man. 3,672 3, % 3,944 3, % 4,066 4, % 4,194 4, % Sask. 3,694 3, % 3,844 3, % 4,058 3, % 4,287 4, % Alta. 3,845 4, % 3,971 4, % 4,432 4, % 4,486 5, % B.C. 3,333 3, % 3,397 3, % 3,523 3, % 3,618 3, % Y.T. 4,663 6, % 5,360 7, % 5,420 7, % 5,846 8, % N.W.T. 6,374 9, % 6,663 9, % 6,555 9, % 7,200 10, % Nun. 8,500 14, % 9,199 15, % 9,599 15, % 10,235 17, % Canada 3,352 3,352 3,520 3,520 3,691 3,691 3,790 3,790 National Health Expenditure Trends, 1975 to 2013 s National Health Expenditure Database, Canadian Institute for Health Information; Population, Statistics Canada.

3 5.2 Population Aging Canada s population is growing; 6 this growth is a function of changing birth, mortality, immigration and emigration rates. Although these factors are largely outside the control of health system decision-makers, the implications of a growing population in terms of potential demand for health care services in the future need to be considered. Population aging describes a shift in the age structure of the population. Like many industrialized countries, Canada is undergoing a demographic shift. As seen in Figure 32, the largest concentration of the population is in the middle age groups (30s to 50s); however, the baby-boom cohort, Canada s largest population group in recent history, is beginning to turn 65. Figure 32: Age Distribution, Canada, 2000 and 2011 Population, Statistics Canada. One perception is that future demands for health care by an aging population will strain governments ability to fund services covered under the Canada Health Act. However, some Canadian studies suggest that the effects of population growth and aging will be manageable within the context of a growing economy. 53

4 The distribution of provincial/territorial government health expenditure by age and sex xiv is shown in Figure 33. More was spent on seniors health care than on that for other age groups, as is clearly seen in the shape of the curves. More was spent on females age 25 to 34 and age 80 and older than on males of the same age ranges. This is because females tend to have longer life expectancy and because of higher costs during childbearing years. Figure 33: Total Provincial/Territorial Government Health Expenditure, by Age and Sex, Canada, 2011 Note See Table E.1.1. xiv. Missing data was estimated for this analysis. A detailed explanation of the method and data sources used to distribute provincial/ territorial government health expenditure by age and sex is available in the Methodological Notes section of this report. 54

5 As a consequence of the population shift and baby boomers turning 65, there is a concern that an aging population will lead to greater demands for health care services and acceleration in the growth of health spending. However, seniors are a diverse group. As shown in Figure 34, provincial and territorial government health spending varies among the senior age groups. On average, health care spending per person is highest for those age 80 and older. Figure 34: Provincial/Territorial Government Health Expenditure per Capita, by Age Group, Canada, 2011 Older seniors consume more health care dollars largely as a consequence of two factors: the cost of health care in the last few months of life, and the minority of the population with chronic illnesses that tends to require more intensive medical attention with age. Survey data shows a stronger correlation between the presence of multiple chronic diseases and higher utilization of health services than between age and utilization. 55

6 As seen in Figure 32 and Figure 35, while Canadians older than age 65 account for more than 14% of the population, they consume 45% of provincial and territorial government health care dollars. xv However, the share spent on Canadian seniors has not changed much over the last decade or so from 44% in 2000 to 45% in During the same time period, the percentage of seniors in the population grew from 12.5% to 14.5%. Figure 35: Share of Provincial/Territorial Government Health Expenditure, by Age Group, Canada, 2000 and 2011 xv. Program design also plays a small role. For example, most provincial and territorial drug plans target seniors for coverage. 56

7 5.3 Issues to Monitor in Future As the percentage of the population age 80 and older increases, decision-makers will be faced with the challenge of determining the levels of hospital care, long-term institutional care and community care for older Canadians that balance access, quality and appropriateness of care on the one hand and cost on the other. Figure 36 shows that the effects of aging have varied slightly across categories in the provincial/territorial government sector and that aging is not the dominant factor. Aging contributed an average annual rate of growth of only 0.6% to physician spending and contributed 2.2% per year on average to the growth in spending on other institutions. Figure 36: Contribution of Aging to Average Annual Growth for Hospitals, Physicians, Drugs and Other Institutions, Canada, 2000 to

8 Even though population aging has been a very modest cost driver overall (contributing an annual average growth of only 0.9%), the effects of population aging vary across Canada. As can be seen in Figure 37, there is a noticeable east west gradient in Canada, in which the impact of aging is more significant in the Atlantic region and Quebec than in Ontario and Western Canada. The different demographic profiles across provinces/territories are a product of numerous factors, including immigration and interprovincial migration. The influx of workingage individuals into a province or territory usually lessens the importance of population aging as a health care cost driver. Figure 37: Contribution of Population Growth and Aging to Average Annual Growth in Provincial/Territorial Government Health Spending, by Province/Territory and Canada, 2000 to

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