This year’s Canadian Institute of Health Information study, Lifetime Distributional Effects of Publicly Financed Health Care in Canada, estimates the effects of publicly funded healthcare and the taxes used to finance it by income groups. The study, based on 2011 data, is novel because it takes life expectancy differences into account, says Michael Wolfson, Canada research chair, Population Health Modelling at the University of Ottawa. Since 2011, the federal government has restructured the Canada Health Transfer (which funds front-line healthcare delivery) and this will increase pressure on many provinces that are already in deficit situations, says Wolfson. “So it is not likely that the public sector portion will stay the same. It is likely to decline, and this will open up more room—or need—for a private sector role,” says Wolfson. The following glimpse of the research findings flag how much private payers and decision-makers will be challenged to help transform the way healthcare is provided in years to come.
- The most affluent Canadians contribute the equivalent of 8% of their average annual income toward publicly funded healthcare, and the least affluent contribute 6%. While tax payments to finance healthcare are higher for more affluent Canadians, differences between income groups are muted when examining costs over a lifetime, rather than in one specific year.
- More than 90% of total hospital and physician expenditures are paid for by governments, while less than half (38%) of total drug spending is financed by the public sector.
- The top income group, or top fifth of the population, has a life expectancy of about five years longer than the bottom fifth.
- Total health expenditures accounted for in the analysis were $81 billion, for a population of 27 million people age 20 and older in the 10 provinces.
- Overall, healthcare spending amounted to more than $200 billion in 2012. Of this amount, more than $140 billion was financed by federal and provincial tax revenues.
- Assuming the patterns observed remain fixed over our lifetimes, Canadians could expect to consume, on average, just over $220,000 in publicly funded healthcare services over a lifetime. To put things in perspective, this figure suggests that if 70% of overall health spending comes from the public purse, overall lifetime spending is about $320,000 per person when private spending is factored in.
