Transcript Macro-Economic Trends

Canadian Institute for Health Information
1
Health Care Cost Drivers:
Macro-Economic Trends
Perspective
January 27, 2011
2
Overview
• Health spending and overall economic growth:
how do they compare?
• How do Canada’s spending trends compare with those
of other countries in the OECD?
• What are the effects of possible cost drivers?
–
–
–
–
Inflation
Population growth
Aging
Others
• What are the key issues to watch for in the future?
3
General Context
4
Total Health Expenditure Growth Varied
Throughout Three Distinct Periods
Annual Growth Rates, Total Versus Real per Capita
18%
17.8
14%
10%
6%
2%
-2%
Total
Real per Capita (Inflation and Population Adjusted)
Forecast
5
P/T Government Spending on Health:
Three Distinct Periods
Per Capita in Constant 1997 Dollars
$2,800
$2,600
$2,400
$2,200
$2,000
Forecast
$1,800
$1,600
$1,400
$1,200
$1,000
1975
1980
1985
1990
1995
2000
Actual
Forecast
Trend (1975–1992)
Trend (1993–1996)
2005
2010f
Trend (1997–2008)
6
Canada: One of the Highest Growth Rates
in Health Spending Among G7 Countries
Average Annual Growth Rate of Real Total Health
Expenditure per Capita, 1998 to 2008
4.9
5%
4%
3%
2%
2.3
2.4
France
Italy
3.4
3.4
Canada†
United
States
2.6
1.8
1%
0%
Germany
Japan*
United
Kingdom
2008 is the latest year available.
7
Public-Sector Health Expenditure–to-GDP
Ratio Rising Over Time
Public-Sector Health Expenditure as a Proportion of GDP and GDP Growth
16%
14%
12%
8.3
10%
8%
6%
4%
2%
2010f
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
-4%
1978
-2%
1976
0%
-6%
GDP Growth
GDP Growth Forecast
Public-Sector Health Exp. to GDP
Public-Sector Health Exp. to GDP Forecast
8
Total Health Spending as a Share of GDP
Increased in All G7 Countries
Total Health Expenditure as a Share of GDP
18%
16.0
16%
13.4
14%
12%
10.4
10%
8%
9.1
8.7
6.7
7.3
8.1
11.2
10.1
10.2 10.5
France
Germany
9.0
7.7
6%
4%
2%
0%
United
Kingdom
Japan*
Italy
†
Canada
1998
2008
United
States
2008 is the latest year available.
9
Public-Sector Shares Remain Unchanged
Since 2000
Public Share of Total Health Expenditure, Selected Categories,
2000 Versus 2010
100%
99
91
99
91
75
80%
72
60%
35
40%
39
20%
10
7
0%
Hospitals
Physicians
2000
Drugs
Other
Institutions
Other
Professionals
2010f
10
Economic Context
11
Positive Correlation Between GDP Growth
and Total Health Expenditure Growth
Average Growth, 1998 to 2008
Annual Average Real Growth in Total Health Expenditure per Capita
10%
KOR
SVK
TUR
IRL
8%
POL
6%
GRC
GBR
PRT
4%
DNK
ITA
BELNZL
NLD
LUXMEX
USA
CAN
AUS
CZE
FIN
SVN
HUN
SWE CHL
ISL
JPN
FRA
AUT
CHEDEU
2%
ESP
OECD
ISR
NOR
0%
0%
1%
2%
3%
4%
5%
6%
Annual Average Real Growth in GDP per Capita
12
More Economic Growth,
More Spending on Health
Canada, 1976 to 2010
Growth in Total Health Expenditure in Each Year, Current Dollars
20%
81
18%
82
80
16%
76
14%
79
12%
89
10%
0190
91
8%
09
6%
92
86
4%
93
2%
85
99
0208 03
06
05
98
04
07
97
10
96
94
78
77
83
00
88
87
84
Period of Fiscal Restraint
95
0%
-5%
0%
5%
10%
15%
20%
Growth in GDP in Each Year, Current Dollars
13
Findings
14
Population Growth and Aging Account for
Less Than 2% of Growth in Public-Sector
Health Spending
Average Annual Growth Rate, 1998 to 2008
8%
7.4
7%
6%
2.8
Aging
5%
4%
3%
Other
0.8
Pop. Growth
1.0
General Inflation
2%
1%
2.8
0%
15
Inflation Rates Differ Slightly Depending
on the Price Index Used
140
1997 = 100
135
Index
130
125
120
115
110
105
GDP Deflator
Total Health Care
(NHEX)
Gov’t Current Exp.
CPI—Health
100
95
16
Hourly Wage in the Health Sector Relatively
Higher Than in the General Economy
$25
$20
$15
$10
$5
$0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
General Economy
Health and Social Assistance
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P/T Government Health Care Spending
Highest on Seniors . . .
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
1998 Health Care Spending Distribution
2008 Health Care Spending Distribution
1998 Age Distribution
2008 Age Distribution
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. . . But Impact of Population Aging
Minimal Over Time
10%
8%
6%
4%
2%
0%
1998 Health Care Spending Distribution
2008 Health Care Spending Distribution
1998 Age Distribution
2008 Age Distribution
19
The Impact of Aging Does Not Vary by Year
10%
8%
6%
Other
Aging
4%
Pop. Growth
2%
General Inflation
0%
20
Average Growth Rates per Capita for
Older Seniors Are Among the Lowest
8%
Average Annual Growth in P/T Government Health Spending by
Age Group, 1998 to 2008
6%
4%
2%
0%
Spending per Capita by Age Group
Spending per Capita—Average for All Age Groups
21
Population Growth and Aging: Two
Demand-Side Factors With Wide
Variation Across Jurisdictions
Average Annual Growth
3%
1998 to 2008
2%
1%
0%
-1%
Population Growth
Aging
22
Technology: A Likely Important
Supply-Side Factor Responsible
for Health Care Spending Growth
• Technological improvement is one of the factors
responsible for increases in health spending
• The size of its effect is difficult to quantify, but three
general approaches are often used:
– The residual approach (what is left after the quantifiable
factors are accounted for)
– The proxy approach (use of an alternative indicator)
– Case studies (cost–benefit analysis, including changes
in outcomes)
23
Technology in Health Care
• Medical technologies may include
– Robotic devices that facilitate delicate surgical procedures
– Computers that help clinicians in decision-making
– Medical devices (including imaging equipment)
– Pharmaceuticals
– Electronic health records and electronic medical records
• Technological change consists of
– Innovation:
• New products and techniques
– Utilization:
• Changes in clinical practices and demand due to
pharmaceuticals and non-pharmaceutical products
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Technology Could Be One of the Most
Important Components of the Other Factors
• Of the 7.4% average growth in health spending from 1998
to 2008, 2.8% may be attributable to other factors such as
– Technology
– Health-sector price inflation—no ideal measure, but
some measures suggest that it is somewhat higher than
economy-wide inflation
– Level of morbidity, lifestyle changes—no evidence of an
increasing impact on health spending growth. To the contrary,
some even suggest a declining impact (OECD, 2006)
– Fiscal position—allowing governments to implement new or
enhanced programs.
25
Stable Trends in the Shares of Total and
Program Expenditures Over the Last Few Years
Total P/T Government Health Expenditure as a Proportion of Total Program Spending
40%
30%
20%
10%
0%
Health as a Proportion of Provincial Programs (Total Expenditure Less Debt Charges)
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Public-Sector Health Spending Growing
Faster Than Revenues; Still Some
Increases in Other Government Programs
Average Annual Real per Capita Expenditure Growth,
1998 to 2008
3.4
4%
2%
2.0
1.4
1.5
0.6
0%
-2%
-4%
-6%
-5.6
-8%
Revenue
Debt Charges
Health
Trans./Comm.
Education
Social Services
27
Biggest Share of Public-Sector Health
Care Funding Still Goes to Hospitals,
Stable Since Early 2000
50%
40%
Share of Public-Sector Health Expenditure by Use of Funds,
Selected Categories, 1990, 2000 and 2010
47.6
38.2
37.3
30%
20.1
20%
18.8 19.2
11.8
10%
7.6
5.0
9.2
9.0
9.9
2.2
1.7
1.1
0%
Hospitals
Drugs
1990
Physicians
2000
Other
Institutions
Other
Professionals
2010f
28
Growth in Total Health and Drug Spending
in 2010 Lowest in Last 10 Years
Annual Growth in Selected Categories,
2010 Versus AAG for Previous 10 Years
10%
9.9
7.9
8%
4.8
8.0
7.6
6.9
6.7
6.4
6%
7.7
6.1 6.2
5.2
5.6
6.9
7.1
6.1
4.7
5.1
4%
2%
0%
Drugs
Total Health
Spending
Hospitals
Average (1999–2004)
Other
Professionals
Physicians
Average (2004–2009)
Other
Institutions
2010f
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Key Findings
• F/P/T fiscal positions—deficits/future constraint
• Inflation—health-sector concerns
• Impact of technology—increasing
• Categories of spending—physicians taking a larger
share of the total in recent years
30
Future Issues to Keep an Eye On
• Growth in health care spending similar to the rate
of GDP growth
• Population aging having a modest impact on
health expenditures
• Fewer savings from debt service charges and
government deficits having a moderating influence
on the growth of health care spending
• Growth in physician spending
31
Questions?
Thank You
33