The sustainability of public health expenditures: evidence from the Canadian federation

Abstract

The fiscal sustainability of government health expenditures is defined as the gap between growth rates of spending and measures of the resource base. The results show that over the period 1965-2008, real per capita Canadian provincial government health spending has grown at rates that exceed growth in basic measures of the resource base such as per capita gross domestic product (GDP), per capita federal transfers and per capita provincial government revenues. Forecasts of future spending to 2035 using determinant regression and growth rate extrapolation techniques show that Canadian provincial government health spending is projected to continue rising in the future and its share of provincial GDP will rise. While the amount spent on health is ultimately a public policy choice, provincial government health spending also cannot continue growing faster than the resource base indefinitely.

Informing policy makers about future health spending: A comparative analysis of forecasting methods in OECD countries

“…More recent studies, however, have emphasised that the estimation techniques may also explain the variation in empirical results and that using more advanced techniques (e.g. cointegration analysis) may lead to values below 1 [6,48,49].…”

“…Models may forecast expenditures to up to a century ahead to estimate what expenditures would be when a country has gone through its demographic [5] or epidemiological transition. Fiscal sustainability -that is the examination of the potential impact of future public sector spending and revenues -is a concern over the medium term [6] or the long term [7]. Most of the models that we reviewed use a long-term horizon, ranging from 30 years to 75 years.…”

Changing healthcare capital-to-labor ratios: evidence and implications for bending the cost curve in Canada and beyond

“…The Canadian Institute for Health Information (CIHI) recently produced a report on health care cost drivers within Canada, but found that the role of capital and technological change difficult to quantify (CIHI 2011b). This paper builds on the earlier work of Di Matteo and Di Matteo (1998) and Di Matteo (2010) to examine the determinants of Canadian provincial government health expenditures with a new focus on the capital-to-labor ratio as an important determinant not examined in this earlier work. The study utilizes data from Statistics Canada and the Canadian Institutes for Health Information (CIHI) from 1981 to 2009 to examine the association between overallpublic sector combined with private sector-healthcare capital-to-labor ratios and per capita Provincial government health expenditures in each of the ten Canadian provinces.…”

Policy options to contain healthcare costs: a review and classification

“…As health care is a substantial spending post for governments, increases in total health care expenditures could risk for government budget excesses. These can be resolved by containing health costs, increasing taxation (or social contributions) or cutting spending on other government items such as education or infrastructure [15][16][17][18][19]. Increasing debt levels could provide short term relief, but are not sustainable as a permanent solution to health cost growth [20].…”