If these declines are the result of successful transformative change attempts that control health care spending in a manner that maintains or boosts services and reduces costs, then this is a good thing. If this is simply being accomplished by reducing services, then this is not a good result. Part of the answer may lie in where the declines are occurring. Figures 2 and 3 plot the annual growth rates for real per capita spending from 2011 to 2013 for the main categories of public sector health spending as laid out by the CIHI. The results are interesting.
There have been consistent increases over the last three years in real per capita public sector health spending for physicians, vision care and other professional care. Hospitals saw increases in two out of the last three years. Drugs, administration, research and all other health spending (eg. Home care, etc…) all saw consistent declines across all three years. Capital spending, dental and public health saw decreases in two out of the last three years.
So is there a story here? Well, the biggest declines seem to have occurred in areas that have seen high growth rates over the last few decades of health expenditure growth – especially drugs. Hospitals and physicians, the traditional core of public health care, have actually gotten off lightly from recent restraint even though they still represent the bulk of spending. Hospitals and physicians still account for 60 percent of Canadian public sector health spending. Capital and research have been particularly hard hit but they are politically the easiest ones to hit given that any effects of reducing spending here will materialize over the longer term. If there has been one consistent area of success when it comes to controlling costs it does appear to be public drug spending as the annual growth rate of real per capita spending there has been below 2 percent since 2007 and 2010 to 2013 has seen negative growth each year. My guess is that the decline in real per capita health spending will be short-lived given that the brunt of the decline has been borne by 40 percent of public sector spending – unless the next wave of restraint/reform also affects hospitals and physicians.