COVID-19 expected to push Canada’s health spending beyond $300 billion in 2021

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Taking care of your health - Influenza or a bad cold, rest, plenty of fluids is a start to feeling better - Photo - DepositPhotos.com
Taking care of your health - Influenza or a bad cold, rest, plenty of fluids is a start to feeling better - Photo - DepositPhotos.com

OTTAWA – NEWS – “COVID-19 resulted in the single biggest increase in health spending we have ever seen in this country. An aging population and the continued pandemic will no doubt put more strain on our health systems and take up a larger proportion of government budgets. Challenges lie ahead, no doubt — but so do opportunities as improved technologies, pharmaceuticals and models of care can lead to better health outcomes for Canadians,” states David O’Toole, President and CEO, Canadian Institute for Health Information.
Canada is expected to spend a new record of $308 billion on health care in 2021 — that’s over $580,000 every minute. In fact, in the time it took to read that first sentence, Canada’s health care costs were about $70,000 (around $10,000 per second).New data from the Canadian Institute for Health Information (CIHI) shows that total health spending is expected to have increased by more than 12% between 2019 and 2020, a rate of increase we haven’t seen in more than 30 years. This is triple the growth rate experienced from 2015 to 2019, which was steady at approximately 4% per year. This historic spending increase took place alongside a contraction in the economy, both due in part to the ongoing COVID-19 pandemic.

Trends in health care spending

Over the last 45 years, health spending in Canada has continued to climb, and it currently represents approximately 40% of total provincial and territorial budgets. Historically, health spending grew alongside — and at times faster than — the economy. But COVID-19 caused a significant increase in spending due to the immediate need to scale up health systems to respond to the pandemic.

Hospitals, drugs and physicians remain the 3 highest areas of spending and, combined, are expected to represent over 50% of total health spending in Canada in 2021. But a new spending category, referred to as COVID-19 Response Funding, will make up about 7% — or $23 billion — of total health spending. This category includes costs for things like COVID-19 treatment, contact tracing and vaccinations.

In addition to pressures caused by the ongoing pandemic, Canada’s health care systems are also making adjustments to care for an increasingly aging population. While those age 65+ make up just 18% of the total population in Canada, they use approximately 45% of public-sector health care dollars.

Quick facts

  • Total health spending in Canada is expected to reach $308 billion in 2021.
  • Hospitals (25%), drugs (14%) and physicians (13%) are expected to continue to account for the largest shares of health spending in Canada in 2021.
  • The new spending category COVID-19 Response Funding will make up about 7% of total health spending.
  • Seniors represent the largest age group in terms of health care spending, at about 45% of total public health dollars (about $78 billion was spent on their care in 2019).

CIHI also released new information on public drug spending for 2020 that includes spending trends and the drugs that accounted for the highest costs in our health systems.