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Livio, I suspect the Alberta numbers may have to do with rapid population growth in the face of a relative shortage of health care professionals and hence expenditures in that province. And either they or Sask have the highest nurses wages in the country (see Nick's post...).

The problem I see in the data is that, while health spending eventually goes in the same direction as GDP, it doesn't track the intensity of those changes. For most of the boom years, HC spending rose above GDP, and during the recession it was cut less than declines in GDP. This certainly fits the US story: the economy is in the toilet, and the health care industry continues to party on. I have even heard health care costs put forward as one of the main wedges in slowing employment growth, because business can afford wages for new employees, but not their health care.

I was a student in the 90s when all the big cuts were going through. If you look at the population health and mortality from the period and just after, it's a lesson in how, up to a point, the health care system does suffer when there are cuts, but the health of the population does not.

What happens if you normalize to GDP instead of inflation adjusted dollars per capita?


I think you are right, Livio, that recessions do seem to have an impact on healthcare spending (though lagged). But I'm a bit surprised that there isn't a clearer signal from the 1982 recession, which, IIRC, was bigger than the later ones.

Hi Chris:
Not sure I follow you. Do you mean the ratio of per capita health spending to per capita GDP?

Nick, if you follow the link to Reinhardt's piece and look at chart 4, there is a clear signal in the US in overall NHE for the 1982 recession. I suspect this is the case in the US because NHE is linked not only to personal income and out-of-pocket expenses, but employment generally because of the employment-based health insurance scheme there, and this was more the case in 1982 than it is now. It's also worth noting the Medicaid/care data show that government as a fraction of NHE in the US is nearly 60% and has been so for some time (including pre-Obama)--only about 5-10% less than government NHE fraction in Canada.

The 1982 recession's figures may have been smothered by health-care reform. The Trudeau Government implemented the Canada Health Act in 1984 which outlawed extra billing, enforced by said billing being deducted dollar-for-dollar from a province's health transfers. This was the last time such large-scale payment structure changes were implemented in Canada.

AIUI 1894-1987 was when provinces were in the process of incorporating the expenditures formerly provided extra-billing into the public system.

Shangwen and Determinant: thanks.

Livio: my interpretation of Chris is that he did mean that ratio of health care spending to GDP.

Well, as a share of GDP, public health spending in Canada peaked in 2009 at 8.5% and is estimated to be 8.4% in 2010 and 8.1% in 2011.

Nick is right: I am a non-economist getting the jargon wrong. Your plots were corrected for population and inflation. If instead health-care spending were plotted as a fraction of GDP we would know how we were doing. It seems many important economic variables (debt, deficit, spending, taxation,...) are normalized to GDP. It it were constant (with fluctuations at times of recession or high growth excepted) then it seems it is sustainable. If health care spending is growing faster than GDP then we have an issue.


I should have just googled it: data from '70 to '05 here:



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