Health Policy and Communications Branch
Health Canada
August 2001
ISBN: 0-662-65942-2 (print publication)
Cat. No.: H21-172/2001 (print publication)
Help on accessing alternative formats, such as Portable Document Format (PDF), Microsoft Word and PowerPoint (PPT) files, can be obtained in the alternate format help section.
The author, André Grenon, is a senior policy analyst with the Health Care System Division, Health Care Strategies and Policy Directorate, Health Policy and Communications Branch, Health Canada.
Thanks must first be given to all those people from the provinces and territories who kindly provided information on public sector health expenditures.
Very special thanks also go to Gary Holmes, Research Analyst, now with the Canada Health Act Division, Health Policy and Communications Branch, and to Barbara E. Woodward, Editor and Writer, Health Care System Division, Health Canada.
Thanks finally to all the members of the peer review who contributed to the refinement of this report:
from Health Canada,
Chantal Maheu, Director, Paul Kasimatis, Senior Analyst, and Sandra-Michèle Bisson, Policy Analyst, Health Care System Division, Health Policy and Communications Branch;
Roger Guillemette, Senior Analyst, Canada Health Act Division, Health Policy and Communications Branch; Anil Gupta, Director, and Jaime Caceres, Senior Analyst, from the Micro Simulation Modelling and Data Analysis Section, and Seamus Hogan, Director, Health Demand and Supply Analysis Section, the Information, Analysis and Connectivity Branch;
and from other organizations,
Over the past decade, there has been a growing concern over the sustainability of the public health care system. There has been a general consensus among all levels of government that the health system needed to be renewed in order to deal with increasing costs caused by several factors, such as technological advances, the introduction of new drugs, recessions and economic slowdowns, the level of remuneration of health personnel and the ageing of Canada's population.
Health Expenditures in Canada by Age and Sex, 1980-81 to 2000-01 is the second report prepared by Health Canada on health expenditures by age and sex, and by category of expenditure, sector of finance and province or territory. This report covers health expenditures over two decades.
This report is part of a number of studies undertaken by Health Canada on the impact of the ageing of our population on health expenditures.
The current report is made up of four sections: trend analysis accompanied by text figures and text tables; definitions; methodology; and statistical tables. A Statistical Annex, including charts and detailed statistical tables, is available on the Health Canada Web site or in print on request. A Methodology Guide is also available in print but on request only.
In this second report, age groups are more detailed and are available in ten-year age groups. As well, estimates for seniors are now available for three sub-groups: 65-74, 75-84 and 85+. The analysis covers seven categories of expenditure: hospitals; other institutions; physicians; other professionals; drugs; home care services; and other expenditures.
Estimates were derived from a new age and sex model of health expenditures. This new model will assist health policy analysts and researchers with the analysis of the impact of the ageing of our population on different categories of health expenditure, and will contribute to the understanding of the cost drivers and pressures on the health care system.
Initial data used to estimate health expenditures by age and sex were extracted from the National Health Expenditure (NHEX) Database maintained by the Canadian Institute for Health Information (CIHI).
However, Health Canada has presented the data on a fiscal year basis to facilitate the analysis of health expenditures from a provincial and territorial government perspective.
A separate estimate was also prepared by Health Canada for home care service expenditures provided by provincial and territorial governments, because CIHI estimates were not available for all the provinces and territories, and did not include, at the time of the study, homemaking services. Health Canada also made a separate, preliminary estimate for private sector home care service expenditures.
Health Canada's health expenditures by age and sex are different from the data appearing in the special analysis of health expenditures by age and sex presented in the Canadian Institute for Health Information (CIHI) 2000 report National Health Expenditure Trends, 1975-2000. Although the age and sex distribution of several categories of provincial and territorial government expenditures is similar, different methods were used to distribute these health expenditures by age and sex. In addition, the CIHI report published in 2000 only provides estimates for the years 1996, 1997 and 1998 and only for provincial and territorial governments.
Caution should be exercised when comparing data between the provinces and territories, either from a per capita or a percentage distribution perspective. In most provinces and territories, the programs and services may cover a different population and provide different benefits. The amount of benefit may also vary according to clinical evaluation, assessment of needs and co-payment charges. Moreover, in many provinces and territories, coverage and terms for programs and services have changed over the years.
Estimates of health expenditures by age and sex developed by Health Canada and based on the National Health Expenditure (NHEX) Database from the Canadian Institute for Health Information (CIHI) show that total health expenditures were $97.6 billion in 2000-01, an increase of $7.2% or 6.5 billion over 1999-2000. Per capita health expenditures were $3,174 in 2000-01.
Text Figure 1
Percentage Distribution of Total Health Expenditures by Age Group and Sex
Canada, 2000-01

Source: Health Canada
Per capita total spending for health increased by 138.0% from 1980-81 ($949) to 1990-91 ($2,259); however, it only increased by 40.5% from 1990-91 to 2000-01 ($3,174). It must be noted that, in real terms, this translates into an increase of 30.8% in per capita total health spending from 1980-81 to 1990-91 and only increased by 17.2% from 1990-91 to 2000-01.
Trends in percentage change of per capita spending hold in all age groups. As an example, per capita spending for people aged 65+ increased by 129.9% from 1980-81 to 1990-91, and then only increased by 33.2% from 1990-91 to 2000-01.
Although reductions in health budgets during the mid1990s are partly responsible for these downward changes in health spending, one must not forget the impact of the use of less costly treatments, such as the use of drug therapy to replace surgical procedures, reductions in the duration of hospital stays and a much larger use of one-day surgery, which all contributed to an increase in productivity.
Text Figure 2
Percentage Distribution of Population by Age Group and Sex
Canada, 2000-01

Source: Statistics Canada
Also, while most provinces and territories have made important investments into non-acute care services, such as home care and community-based services, the reduction of hospital stays may have increased the burden of families and other unpaid caregivers.
It is estimated that 56.2% of total health expenditures in 2000-01 were for females, compared to 43.8% for males. In 2000-01, females made up 50.5% of the total population, compared to 49.5% for males.
Text Figure 3
Per Capita Total Health Expenditures by Age Group and Sex
Canada, 2000-01

Source: Health Canada
In the 0-14 age group, per capita health expenditures were higher for males ($1,476) than for females ($1,395). A possible explanation for this difference is that males are more prone to injury in their early years. Analysis of the National Longitudinal Survey of Children and Youth (1996-97) weighted data show that the number of injuries over a 12-month period for children 0-14 years of age was about 10% higher for males than females.
Females had higher per capita health expenditures than males in the 15+ age groups, with the exception of the 65 to 84 age groups. One reason females in the 65-74 and 75-84 age groups accounted for lower per capita expenditures is that they used fewer hospital and physician services than males in the same age groups.
In 2000-01, 42.7% of total health expenditures were made for seniors aged 65+, compared to 35.0% twenty years ago. Although these figures indicate that the share of seniors aged 65+ increased over the last twenty years, it must be remembered that their share of the population also increased, from 9.4% of the total population in 1980-81 to 12.5% in 2000-01.
In fact, for seniors aged 65+, their share of health expenditures increased less, at 22.0%, than their share of the population, which increased by 33.0%.
Health expenditures for seniors aged 65+, which were $10,834 per capita in 2000-01, increased by 206.4% up from the 1980-81 level, while the population of seniors aged 65+ increased by 67.0% in the same period. In comparison, per capita health expenditures for the 15-24 age group, at $1,872 in 2000-01, increased by 274.4% in the same period, while the population in that age group decreased by 14.2%.
People in the 75-84 age group spent $12,535 per capita for health expenditures in 2000-01, while people in the 85+ age group spent $27,135. Data extracted from the Statistics Canada's 1998-99 National Population Health Survey show that nurse consultations per 1000 population were twice as high for seniors aged 85+ than for persons in the 75-84 age group. While this crude figure is not converted in costs, it gives an indication of the important amount of care received by this segment of the population.
Per capita total health expenditures for older seniors aged 85+ ($27,135 in 2000-01) were approximately eight times higher than per capita total health expenditures for all age groups. The major portion of this amount, 75%, comes from long stays in residential care facilities, such as nursing homes, and the use of palliative care beds in long-term care hospitals.
For the 85+ age group, $10,401 per capita was spent for hospital expenditures and $9,358 for other institutions.
Health expenditures in the public sector were 70.7% of total health expenditures in 2000-01. This is down from the level of 75.2% recorded in 1980-81.
Health expenditures in the private sector were 29.3% of total health expenditures in 2000-01. These expenditures represented 29.8% of total health expenditures in 1999-2000 and 24.8% in 1980-81.
From 1980-81 to 2000-01, the public share of total health expenditures decreased from 75.2% to 70.7%. This drop in the public share occurred in every age group with the exception of the 25-34 age group. The public share of the 25-34 age group has increased since the mid-1990s, probably because of the large amount of money spent on health promotion and prevention for this age group.
| Age Group | 1980-81 | 1990-91 | 2000-01 |
|---|---|---|---|
| 0-14 | 64.9 : 35.1 | 63.8 : 36.2 | 60.2 : 39.8 |
| 15-24 | 78.5 : 21.5 | 77.6 : 22.4 | 66.2 : 33.8 |
| 25-34 | 69.2 : 30.8 | 70.1 : 29.9 | 72.2 : 27.8 |
| 35-44 | 68.1 : 31.9 | 64.9 : 35.1 | 63.6 : 36.4 |
| 45-54 | 70.6 : 29.4 | 65.4 : 34.6 | 61.2 : 38.8 |
| 55-64 | 75.8 : 24.2 | 70.9 : 29.1 | 66.2 : 33.8 |
| 65-74 | 82.9 : 17.1 | 81.5 : 18.5 | 75.1 : 24.9 |
| 75-84 | 84.3 : 15.7 | 84.1 : 15.9 | 80.4 : 19.6 |
| 85+ | 82.0 : 18.0 | 82.4 : 17.6 | 80.6 : 19.4 |
| [65+] | 83.2 : 16.8 | 82.7 : 17.3 | 78.7 : 21.3 |
| Total | 75.2 : 24.8 | 74.2 : 25.8 | 70.7 : 29.3 |
Source: Health Canada
During the early to mid-1990s, provincial and territorial governments began to review extended and other health care services in an effort to curb health spending. Extended and other health care services, rather than insured health services, became the target of review because of regulations that restrict the way insured health services can be administered.
The increased use of one-day surgery and the reduction in the number of days spent in hospital contributed to cost reductions in public sector expenditures for most age groups. These early discharges meant that health care services, such as prescribed drugs provided by publicly funded hospitals, had to be paid by individuals who were released from an institution at an earlier time, or were passed on earlier to the provincial and territorial governments that provided public coverage for such health care services.
Text Figure 4
Per Capita Total Health Expenditures by Province and Sex
Seniors Aged 65+
Canada, 2000-01

Source: Health Canada * Include territories
Several factors affect the ratio of public and private health expenditures: government fiscal restraint; inflation; technological advancements; changes in public coverage of extended health care services, such as dental care and eye examinations; the introduction of and changes to co-payments; the impact of recessions and economic slowdowns on personal spending; consumer preferences toward alternative medicines. The expansion of available services is also a factor; the range of extended health services is growing and therefore a larger market for proprietary health services is emerging.
Some of these factors may also have influenced the ratio of public and private health expenditures for some specific age groups. For example, the 15-24 age group, which experienced a reduction of dental care coverage, and the 45 to 74 age groups with the introduction of deductibles, contributions and copayments for prescribed drugs for seniors.
For seniors aged 65+, the larger share of health expenditures paid by the public sector, compared to other age groups, is explained in part by the wide range of programs and services that provincial and territorial governments offer seniors, particularly access to long-term care facilities, prescription drug benefit plans and extended health care services (see Text Table 1).
From 1980-81 to 2000-01, the 75+ age group experienced only a small shift from public to private health expenditures. This is because most health services provided to seniors aged 75+ are considered medically necessary and are therefore covered under public health insurance. Furthermore, for some people in this age group, hospitalization reduces extended and other health care service costs, such as drug plan premiums, home care services and residential care facilities, whose expenditures are shared by governments and individuals.
Given the numerous factors that influence both public and private health care spending, a more comprehensive model would be required to better estimate the influence of each factor on the public and private sector composition of health expenditures of a specific age group.
As mentioned earlier, per capita health expenditures were $3,174 in 2000-01 in Canada. The territories excepted, Manitoba spent the most at $3,528 per capita and Prince Edward Island spent the least at $2,849 per capita.
For the 0-14 age group, Alberta spent the most at $1,634 per capita in 2000-01, while Prince Edward Island spent the least at $1,217 per capita. Total health expenditures for this age group were $1,437 per capita throughout Canada.
Text Figure 5
Per Capita Provincial Government Health Expenditures by Province and Sex
Seniors Aged 65+
Canada, 2000-01

Source: Health Canada * Include territories
Total health expenditures for seniors aged 65+ were $10,834 per capita throughout Canada in 2000-01. Among the ten provinces, Manitoba at $12,734 per capita spent the most on seniors aged 65+ and Quebec spent the least at $9,388 per capita.
Per capita health expenditures made by the territories are always higher than in any province. As an example, compared to Manitoba, which spent the most among the provinces on seniors aged 65+ at $12,734 per capita, Yukon spent $17,427 per capita and the Northwest Territories spent $30,963 per capita.
One reason for the higher cost in the territories is that they must meet the health care needs of a small population spread across vast regions. For instance, while the average per capita cost of ambulance services is $122 throughout Canada, this expenditure reached a per capita figure of $657 in Yukon and $2,540 in the Northwest Territories for the year 2000-01. The closest province with high per capita ambulance service expenditures is Nova Scotia at $255 per capita in 2000-01.
Another reason for the high per capita amount in the territories is the difficulty of benefiting from economies of density for most of the programs and services offered.
Public sector health expenditures made by provincial and territorial governments represented 64.8% of total expenditures in 2000-01, while health expenditures for other public sector (federal government direct, municipal government and Workers' Compensation Boards) represented 5.9% of total health expenditures, for a total of 70.7% for all the public sector.
In 2000-01, Prince Edward Island had the lowest provincial government health expenditures at $1,842 per capita, while Manitoba had the highest at $2,398. In comparison, throughout Canada, $2,058 per capita was spent.
In general, per capita provincial and territorial government institutional health expenditures begin to increase from age 55 onward, which reflects the increased use of institutional care as people age. In the other categories of provincial and territorial government health expenditures, per capita spending decreases from age 65 on.
Per capita provincial and territorial government health expenditures were highest for seniors aged 65+ in all categories of expenditure, except for the category of other expenditures (public health, health research, capital, etc.), where it was higher for persons aged 15-24.
For seniors aged 65+, in 2000-01, Prince Edward Island had the lowest provincial government health expenditures at $7,074 per capita, while Manitoba had the highest at $10,040. In comparison, provincial and territorial government health expenditures for seniors aged 65+ throughout Canada were $8,172 per capita.
Per capita provincial and territorial government health expenditures vary considerably between the provinces and territories. These variations reflect the unique programs and services delivered by each province and territory, as well as other factors, such as fiscal situation and political decisions.
Specific health needs for specific population segments, such as seniors, children, young mothers, etc., may also be important factors in the delivery of care and services. Two provinces, Manitoba at 13.5% and Saskatchewan at 14.5%, have a larger proportion of seniors aged 65+ than the national average of 12.5%. The larger proportion of seniors in these two provinces means that it is in the interest of these provinces to continue to control costs, like all provinces and territories, and to adapt health care services to the needs of an older population.
Expenditures in a province or territory are also influenced by the density and geographical distribution of its population. A small population dispersed over a large geographical area means that a province or territory cannot benefit from economies of scale and density. As previously noted, this is especially true in the territories.
The financing of health care (block funding, annual budget, etc.), its administration (central, regional) and the level of remuneration of health personnel also have some influence on the level of health expenditures. Finally, public coverage of some care health services (drugs, community-based services, home care and home support services) may make a major difference to the level of health expenditures.
In conclusion, although the level of per capita health expenditures gives some information on the amount of money spent in a province or territory for a particular age group or sex in itself, it cannot be considered as a good indicator of the quality of the care provided in that province or territory.
The main categories of expenditure were analysed to understand the distribution of public and private health expenditures among people of different age groups and between both sexes. These categories are: hospitals; other institutions; physicians; other professionals (mainly dentists); drugs; home care services; and other expenditures.
In 2000-01, hospital expenditures represented 44.0% of provincial and territorial government total health expenditures, while in the private sector, hospital expenditures accounted for 8.5% of total private sector health expenditures. In that same year, the public share of hospital expenditures throughout Canada was 92.0%.
Text Figure 6
Per Capita Health Expenditures by Category and Sector of Finance
Canada, 2000-01

Source: Health Canada
Hospital expenditures in the private sector mainly consist of differential charges for preferred accommodations (private rooms), chronic care copayments, charges for services to non-residents of Canada and to uninsured residents, and charges for services that are not medically necessary, such as plastic surgery.
Hospital expenditures in the private sector were $80 per capita, compared to $906 per capita for provincial and territorial government health expenditures.
Provincial and territorial government hospital expenditures were significantly higher for females at $1,005 per capita than for males at $805 per capita.
In the private sector, hospital expenditures were also higher for females at $89 per capita than for males at $70 per capita. The higher per capita hospital expenditures for women reflect a higher utilization rate in the early age groups.
Text Figure 7
Per Capita Health Expenditures by Category and Sector of Finance
Seniors Aged 65+
Canada, 2000-01

Source: Health Canada
Hospital expenditures for newborns represented about 4% of hospital expenditures for the total population. According to Health Canada estimates, depending on the province or territory, between 50% and 60% of hospital expenditures in the 0-14 age group are made for newborns.
From 1990-91 to 2000-01, per capita provincial and territorial government hospital expenditures increased for all age groups. People in the 85+ age group accounted for the largest increase at $623 per capita (an increase of 7.0%), followed by people in the 65-74 age group at $282 per capita (an increase of 13.6%). The highest increase for males was in the 85+ age group at $998 per capita, while females in the 85+ age group accounted for an increase of $458 per capita.
In 2000-01, hospital expenditures for seniors aged 65+ in the private sector were $354 per capita, compared to $3,960 per capita for provincial and territorial government health expenditures.
In comparison, the younger age groups increased much less in the same period: the 15-24 age group by $25; the 25-34 by $46; the 35-44 age group by about $59; and the 45-54 by $46 per capita.
Text Figure 8
Per Capita Health Expenditures by Category and Sector of Finance
Seniors Aged 85+
Canada, 2000-01

Source: Health Canada
Other institution expenditures are funded 70.5% by the public sector. The private share of other institution expenditures at 29.5% corresponds to the payments for people in residential care facilities, such as nursing homes.
In 2000-01, other institution expenditures represented 9.7% of provincial and territorial government total health expenditures. Those made by the private sector represented 9.3% of private sector total health expenditures. Most expenditures in this category are made for seniors aged 65+.
From 1990-91 to 2000-01, provincial and territorial government other institution expenditures increased from $149 per capita to $200 per capita or 34.2%. In 2000-01, these expenditures were higher for females at $270 per capita than for males at $128 per capita. Females live longer and are therefore more likely to require residential care facility services for a longer period of time.
In 2000-01, per capita provincial and territorial government other institution expenditures for seniors aged 65+ were much higher for females at $1,736, than for males at $902 per capita. The average for both sexes for seniors aged 65+ was $1,380 per capita.
From 1990-91 to 2000-01, private sector other institution expenditures increased from $59 per capita to $87 per capita. In 2000-01, private sector other institution expenditures for seniors aged 65+ were $592 per capita. They were $388 per capita for males and $744 per capita for females.
In recent years, continuing care has evolved, from being provided only in hospitals and residential care facilities, to be more and more provided in assisted living housing, group homes, campuses for seniors and other environments. Although these changes are not captured here, they have had an real impact on the utilization and cost of health care services. It is generally accepted that people who become seniors in the next 20 years will be healthier than seniors are today. Thus it is expected that utilization of health services by seniors will decrease on a per capita basis. To better assess these factors, detailed figures on continuing care expenditures are needed.
Physician expenditures are primarily funded by the public sector. In 2000-01, the public share of physician expenditures was about 99%.
In 2000-01, physician expenditures represented 20.0% of total provincial and territorial government health expenditures. In the private sector, physician expenditures represented 0.6% of total health expenditures. In the same fiscal year, provincial and territorial government expenditures for physicians were $411 per capita, and $6 per capita for the private sector.
Text Figure 9
Per Capita Health Expenditures* by Category and Sex
Seniors Aged 65+
Canada, 2000-01

Source: Health Canada
* Includes private sector and provincial and territorial governments
Per capita provincial and territorial government physician expenditures were $479 per capita for females, $137 higher than for males at $342 per capita. This reflects a higher utilization of physician services by females, especially in the early to mid-age groups. The Statistics Canada National Population Health Survey shows that, in 1998, for the age groups 15 to 34, physician consultations by females per population unit were more than double that for males.
In 2000-01, provincial and territorial government physician expenditures for seniors aged 65+ were $913 per capita, while they were only $13 per capita for the private sector.
From 1990-91 to 2000-01, provincial and territorial government physician expenditures increased by 23.8%, from $332 per capita to $411 per capita. From 1990-91 to 2000-01, physician expenditures increased the most in the 75-84 age group, by $267 per capita, and in the 65-74 age group, by $199 per capita.
On a per capita basis, in 2000-01, Ontario at $1,052 spent the most for seniors aged 65+, and Prince Edward Island at $579 per capita spent the least.
From a percentage distribution perspective, in 2000-01, Nova Scotia at 32.2% had the highest percentage of its physician expenditures going to seniors aged 65+, while Alberta at 22.8% had the lowest percentage. However, when looking at age standardized figures, Nova Scotia at 31.1% spent the most on seniors aged 65+, and Saskatchewan at 26.3% spent the least.
Other professional expenditures include payments for dentists, optometrists and health professionals other than physicians.
In general, public coverage is provided for specific groups, such as children, seniors and people on welfare, and for specific services, such as dental services and eye examinations.
In 2000-01, the public share of other professional expenditures was 10% and the private share was 90%.
In the same fiscal year, expenditures for health professionals other than physicians represented only 1.2% of total provincial and territorial government health expenditures. Private sector expenditures for health professionals other than physicians represented 35.8% of total private sector health expenditures.
In 2000-01, other professional expenditures in the private sector were $333 per capita, compared to $25 per capita for provincial and territorial governments.
From 1990-91 to 2000-01, provincial and territorial government other professional expenditures decreased from $28 per capita to $25 per capita or 10.7%. Almost all age groups experienced decreases during this time period. The 65-74 and 75-84 age groups accounted for the largest decreases at $23 per capita and $11 per capita, respectively.
In 2000-01, provincial and territorial government expenditures for other professionals were $28 per capita for females and $21 per capita for males. In the private sector, they were $346 per capita for females and $319 per capita for males. Statistics Canada Health Indicators Data Base show that females have a slightly higher per capita utilization rate than males for both dental visits and eye exams.
Drug expenditures consist of prescribed drugs, nonprescribed drugs (over-the-counter medications) and personal health supplies. In 2000-01, the public share of total drug expenditures was 34%. In 2000-01, the private share of drug expenditures was about 66%. It must be noted that the public share consists essentially of prescribed drug expenditures.
In 2000-01, prescribed drug expenditures represented about 78% of total drug expenditures. Currently, about 50% of all prescribed drug expenditures are funded by the public sector. Other drug expenditures, such as over-the-counter medications and personal health supplies, are all paid by the private sector.
In 2000-01, provincial and territorial government drug expenditures represented 7.0% of their total health expenditures. For the private sector, drugs accounted for 34.7% of their total health expenditures.
Drug expenditures represented one of the fastest growing categories of expenditure in both the public and private sectors. Provincial and territorial government drug expenditures were $144 per capita in 2000-01, up 82.3% from the 1990-91 level of $79 per capita. In the private sector, drug expenditures were $323 per capita, up 87.8% from the 1990-91 level of $172 per capita.
Provincial and territorial drug expenditures for seniors aged 65+ were $744 per capita in 2000-01, and $848 and $829 per capita, respectively, for the 75-84 and 85+ age groups. Private sector drug expenditures for seniors aged 65+ were $606 per capita in 2000-01, and $603 and $543 per capita, respectively, for the 75-84 and 85+ age groups.
Provincial and territorial government drug expenditures were higher for females at $161 per capita than for males at $128 per capita. However, they were higher by $48 per capita for males in the 85+ age group and higher by $27 per capita for males in the 75-84 age group. This reflects variances in utilization rates. The Statistics Canada Health Indicators 1999 Data Base shows that per capita use of medications was higher for males in the 75+ age groups.
Home care professional services are almost totally covered by the public system. Two-thirds of home care non-professional services are paid by government programs.
Per capita provincial and territorial government home care expenditures have increased significantly over the past decade. Increases reflect changes made by provincial and territorial governments to move health care services from acute care institutional settings to community home-based delivery.
Health Canada estimated the private sector home care expenditures using tabulations derived from Statistics Canada surveys and with information obtained from private providers of home care services. In 2000-01, the public share of home care expenditures was estimated at 78.1% and the private share at 21.9%.
In 2000-01, home care expenditures represented 2.7% of total private sector health expenditures. On the other hand, home care expenditures represented 4.3% of total provincial and territorial government health expenditures.
In 2000-01, home care expenditures in the private sector were $25 per capita. In comparison, provincial and territorial government home care expenditures were $88 per capita in 2000-01, and had increased by 144.4% from the 1990-91 level of $36 per capita.
About 73.9% of home care expenditures were made for the 65+ age group, which corresponded, in 2000-01, to a figure of $663 per capita, if home care expenditures in other public sectors are excluded.
Home care expenditures were $113 per capita for females and $62 per capita for males. The Statistics Canada Health Indicators 1999 Data Base shows that, in 1996-97, the proportion of people in the 55-74 age groups reporting the use of home care over the total population of this age group was higher for females than for males.
In the public sector, other health expenditures consist of expenditures for public health, ambulance services, health research, administration, medical aids, appliances and prostheses, capital costs and miscellaneous items. In the private sector, other expenditures consist mainly of expenditures for administration, health research and capital costs.
In 2000-01, other health expenditures represented 13.8% of total provincial and territorial government health expenditures.
Other health expenditures represented 8.4% of total private sector health expenditures in 2000-01.
In 2000-01, provincial and territorial government other health expenditures were $284 per capita, up 66.1% or $99 from the 1990-91 level of $171 per capita. These expenditures were $256 per capita for males and $312 per capita for females. People in the 65+ age group spent $608 per capita on these other expenditures in 2000-01.
The analysis of health expenditures by age and sex has shown that about 43% of health expenditures were made for seniors aged 65+ in 2000-01, while seniors aged 65+ accounted for 12.5% of the total population. The analysis has also shown that, from 1980-81 to 2000-01, the share of health expenditures for seniors aged 65+ increased less (22.0%) than their share of the population (33.0%).
The analysis has shown that health expenditures made for seniors aged 85+ were higher on a per capita basis, about nine times the average for all age groups. In addition, most of these health expenditures made for seniors aged 85+ are from hospital and other institution expenditures. Surprisingly, in other categories of expenditure, about the same amount per capita was spent for seniors aged 85+ as for the other age groups. The exception is, of course, home care services, which are mainly used by seniors for continuing and palliative care.
This study allocated past and current health expenditures by age group and sex. It did not forecast how the health care system will evolve in the future and what impact that evolution will have on health spending. To prepare such a projection, at the minimum, one would need to make assumptions on our future health status, new technologies, breakthroughs in drugs and new models of health care service delivery.
The analysis of private sector health expenditures by age and sex has shown that much better health expenditure data are needed for the private sector in order to better understand the distribution of health expenditures among seniors and other age groups.
Most definitions used in the report were adapted from Health Canada's earlier publication, National Health Expenditures in Canada, 1975-1994 - Full Report, which was the first report in Canada to present distribution of health expenditures by age and sex.
Definitions are the same as those used by CIHI, except for home care services, which are explained later in this section. In 1996, the Canadian Institute for Health Information (CIHI) took over Health Canada's role in providing national health expenditure estimates.
Insured health services means hospital services, physician services and surgical-dental services provided to insured persons, but does not include any health services that a person is entitled to and eligible for under any other Act of Parliament or under any Act of the legislature of a province or territory that relates to workers' or workmen's compensation.
Extended health care services means the services provided for residents of a province or territory, namely, nursing home intermediate care service, adult residential care service, home care service and ambulatory health care service.
Other health care services include all other healthrelated services not defined in the Canada Health Act or defined by exclusion, such as mental health programs, health promotion, ambulance programs, health research, Northern transportation programs, alcoholism programs, hearing programs, regional services, prescribed drug programs, etc.
Federal government direct health expenditures refer to federal disbursements for health care services to special groups, such as First Nations and Inuit people, the Armed Forces and veterans, as well as expenditures for health research, promotion and protection.
Provincial and territorial government health expenditures are those made by the provinces and territories for insured health services and extended health care services, which are financed through federal transfers to the provinces and territories, and from provincial and territorial government funds.
Municipal government health expenditures include health care spending by municipal governments for institutional services, public health, capital construction and equipment, and other categories of expenditures, such as dental services provided by municipalities in the provinces of Nova Scotia, Manitoba and British Columbia. Most municipal government health expenditures are made for hospitals and public health.
Designated funds transferred by provincial and territorial governments for health purposes are not included in the municipal sector, but are included with provincial and territorial government expenditures.
Workers' Compensation Board health expenditures include all spending on what is commonly referred to by provincial and territorial boards as medical aid. Non-health related items, such as funeral expenses, travel, clothing, etc., are not included even if they are often reported by Workers' Compensation Boards as medical aid expenditures.
Private sector health expenditures are sub-divided into three major disbursements that reflect both the source of funds and the source of data. The first two disbursements are expenditures from health insurance firms and individual out-of-pocket expenditures.
The third disbursement consists of: health institution patient service revenue paid by private insurers or outof- pocket, such as differential charges for preferred accommodation (private rooms) and chronic care copayments; charges for services to non-residents of Canada; charges for services to uninsured residents; charges for services that are not medically necessary; non-patient service revenue to health care institutions that do not apply to services provided to patients, such as dietetics, investment income, philanthropic donations and ancillary operations (parking and concessions); capital costs; and health research expenditures.
Hospital expenditures include expenditures made by public, proprietary and federal hospitals for acute, extended and rehabilitative care provided in general, psychiatric, convalescent and chronic care hospitals.
This category includes specialty hospitals, such as pediatric, neurology, orthopaedic, cardiology, maternity and cancer hospitals.
Other institution expenditures refer to expenditures made at residential care facilities that are approved, funded or licensed by provincial or territorial departments of health or social services. Residential care facilities include homes for the aged, such as nursing homes, and specialized facilities for emotionally disturbed children and for people who are physically or mentally handicapped, developmentally delayed, psychiatrically disabled, or addicted to alcohol or drugs.
Other institution expenditures involve only the health portion provided to people living in residential care facilities. This includes all levels of care requiring custodial care: type I (for patients primarily requiring supervision); type II (for patients with relatively stabilized health conditions requiring 1½ to 2½ hours of care in a 24-hour day ); and type III (for patients requiring a minimum of 2½ hours of care in a 24-hour day).
Non-health expenditures provided in these facilities, which consist mainly of social services, are excluded. This includes the basic level type of care for mainly self-sufficient people: domiciliary (room and board); custodial (room and board with guidance, assistance and basic counselling); and temporary (for transients or delinquents).
Detailed definitions for the different types of care are available from the Statistics Canada publication, Residential Care Facilities, cat. 83-237.
Physician expenditures reflect professional health services provided by physicians. This includes: professional fees primarily paid by provincial and territorial medical care insurance plans; payments for clinical services provided by licensed medical practitioners; salaries and other forms of contractual professional income received by physicians; Workers' Compensation Board fee payments; direct expenditures from federal agencies; and private sector payments for physicians' services that are not covered by provincial and territorial plans.
The remuneration of physicians on payrolls of hospitals, public health agencies and similar organizations are not counted in this category, but are included in the category where these expenditures occur (hospitals, public health, etc.).
Other professional expenditures include payments for services provided by dentists, denturists, chiropractors, optometrists, podiatrists, osteopaths, naturopaths, private duty nurses and physiotherapists.
Expenditures for dental services include professional fees charged by dentists, dental assistants, hygienists and denturists, as well as the cost of dental prostheses (including dentures), and laboratory charges for crowns and other dental appliances.
Eye care expenditures are classified under other professionals, except for private sector eye care expenditures, which appear under other expenditures.
Estimates for other professional services do not include the services of nurse practitioners, nurses, nursing assistants and orderlies. This information is presently included in the administration costs of hospitals, nursing homes and physicians (doctors' assistants).
Drug expenditures represent expenditures for prescribed drugs, non-prescribed drugs and personal health supplies bought in retail stores.
Prescribed drugs are substances considered to be a drug under the Food and Drugs Act, that are sold for human use as the result of a prescription from a health professional.
Non-prescribed drugs, generally referred to as overthe- counter medicines, are substances considered to be a drug under the Food and Drugs Act, that are sold for human use without a prescription.
Personal health supplies are medical devices or sundries used primarily to promote or maintain health or normal human function. Personal health supplies include: cough, cold and flu remedies; skin care products; oral hygiene products; dietary aids; external wound products and ointments; oral vitamins and mineral supplements; and over-the-counter internal remedies.
Expenditures on non-prescribed drugs and personal health supplies are allocated entirely to private sector health expenditures.
Drug expenditures of provincial and territorial governments are made by their department of health and social services under prescription drug programs that cover either the whole population or a portion, such as seniors, social assistance recipients, individuals with specific disease conditions, etc. Although some of these expenditures are for over-thecounter drugs, they are classified as prescribed drugs because they are prescribed by a doctor and therefore are covered by the provincial or territorial prescription drug program.
In addition to prescription medications, prescription drug programs in several provinces and territories may cover prosthetic appliances, hearing aids, insulin, ostomy and mastectomy supplies, blood glucose testing strips, orthotic bracing, etc. However, prosthetic appliances and hearing aids generally do not appear under the category of drug expenditures but are entered under their own category.
Although expenditures for drugs dispensed in hospitals are sometimes included under the drug category, in this study these expenditures are included in the category of hospital expenditures.
Home care service expenditures generally fall under two main categories of services: professional services, such as nursing care, physiotherapy, occupational therapy, speech therapy, respiratory therapy, nutrition, counselling and social services; and non-professional services, such as homemaking, home maintenance, home support, home help, personal care, meal preparation, home visiting, errands, transportation and respite care. Professional services also include services provided by the Victorian Order of Nurses.
Home care services are provided for three types of clients: people who need acute care after a hospital stay; people who have a long-term illness or a health condition, and who need continuing care; and terminally-ill people who need palliative care. Services may also be provided to people as a preventive measure, such as home support and aids to daily living programs, to avoid or delay a transfer to a health institution. Finally, support may be provided to informal caregivers, such as respite care, education and other types of assistance.
All of the above-mentioned home care services must be provided because of a health condition or an illness, or as determined by a client's functional level and need for assistance with daily living.
Public sector home care expenditures include home care expenditures funded by provincial, territorial and municipal governments, Workers' Compensation Boards and federal government direct health expenditures, such as Health Canada's home care programs for First Nations and Veterans Affairs' home care spending for veterans. Hospital-based home care services are also included in these estimates.
For this report, Health Canada prepared special estimates for public sector home care expenditures to complete estimates found in the National Health Expenditure Database maintained by CIHI. Health Canada used public accounts, annual reports, main estimates and data derived from special requests to provincial and territorial health and social services departments.
Health Canada also estimated hospital-based home care service expenditures in hospitals by extracting the amount of home care service expenditures as reported by public hospitals from Statistics Canada's Hospital Survey.
There are no expenditures associated with home care services provided by residential care facilities. Even if many of these facilities provide beds for respite care, these expenses are not considered home care services because they are not provided at home but rather in a health institution, generally for a week-end or a short period of time. Besides, the Survey of Residential Care Facilities by Statistics Canada does not report any home care service expenses.
For the first time in Canada, Health Canada estimated private home care expenditures, using the results of Statistics Canada surveys, as well as the input of private providers of home care services. However, the portion of home care paid by private insurers was not estimated and thus is not included.
Ambulance service expenditures show expenditures for transportation in a specially equipped surface vehicle or by a designated air ambulance to or from facilities to obtain health care services. Transportation by ordinary surface vehicle, even though it may be equipped with devices to facilitate entry and exit by physically handicapped persons, is not included.
Capital expenditures include expenditures made by hospitals and other health institutions for construction, machinery and equipment. Although such expenditures are sometimes reported by departments other than the health department, these amounts are still counted as capital expenditures for health purposes.
Public health expenditures include health inspections, health promotion activities, and public measures for food and drug safety and to prevent the spread of communicable diseases. Community mental health programs, public health nursing and the operating costs of health departments are also included.
Administration expenditures include items defined as prepayment administration. These expenditures relate to the cost of providing health insurance programs by either governments or private health insurance firms. Not included are program administration costs associated with extended health care services, such as home care, administration costs associated with the general operation of government and administration costs associated with operating health related institutions.
Other expenditures reflect expenditures for prostheses, aids and appliances, health research and miscellaneous health care. Prostheses, aids and appliances include hearing aids, eye glasses, visual aids, aids for ostomates, orthopaedic apparels, walking aids, mammary prostheses, etc.
The age and sex model of health expenditures was designed to assist health policy analysts and researchers with the analysis of the impact of the ageing of our population on health expenditures, and to contribute to the understanding of cost drivers and pressures on the health care system.
Health expenditures were first distributed by age and sex, and by sector of finance, category of expenditure and province and territory for the years 1980-81 to 2000-01. Then a model was built from these historical series to project long-term health spending, provide an analysis of the distribution of this spending between the different age and sex cohorts, and forecast the impact of ageing on health expenditures.
Although calculations were made for males and females by five-year age groups, the following nine age groups were retained for the publication: children (0-14); young adults (15-24 and 25-34); adults (35-44, 45-54 and 55-64); and seniors (65-74, 75-84 and 85+).
Health expenditures were distributed by sector of finance, category of expenditure, and sex and age group.
Health expenditure estimates were developed for the federal government, the provincial and territorial governments, municipal governments, Workers' Compensation Boards and the private sector.
Categories of expenditure include: hospitals; other institutions; physicians; other professionals; drugs; home care; and other expenditures (including capital). The ambulance service category was estimated separately and added to the category of other expenditures by provincial and territorial governments. The administration category was also estimated separately and added to the category of other expenditures by the private sector.
A separate detailed Methodology Guide is available in print but on request only.
Provincial and territorial government health expenditures were estimated from 1980-81 to 2000-01 by age group and by sex for each category of expenditure, and for each provincial and territorial government. Data were collected from annual and statistical reports or obtained through special request to the relevant department.
Private sector health expenditure estimates were prepared by province and territory, by age group and by sex for each category of expenditure from 1980-81 to 2000-01 using surveys from Statistics Canada.
Health expenditures from other public sectors of finance (federal government, municipal government and Workers' Compensation Boards) were estimated at the total level (not by category) for each province and territory from 1980-81 to 2000-01 by age group and by sex. Weighting procedures were used to compensate for the lack of data.
In some instances, especially for the private sector, there may be a lack of homogeneity in the figures for a province or territory for a specific category. This is due to the method used to extrapolate missing data that may have caused a notch in a series for a particular age and sex combination.
In general, the actual age and sex distribution of health expenditures for each category was used. When actual data were not available, the age and sex percentage distribution of a proxy variable was applied to health expenditures of a corresponding category. When neither administrative nor proxy data were available, the age standardization method was used, based on the province or territory that had the closest characteristics in terms of programs, services, rural or urban areas and geographical locations. When data were missing for a particular year, the missing values were extrapolated based on available information, using the age standardization method.
The age standardization method uses the figures of another province or territory to generate an estimated figure for a province or territory where no data exist. The figure is first reduced to the population unit of the province or territory for which data exist and is then multiplied by the population unit of the province or territory without data to obtain the final estimate.
More details on the methodology used and the source of every estimate can be found in the Methodology Guide, which is available on request.
Population estimates correspond to those available from Statistics Canada for the years 1980 to 2000 as of October 2000.
Population projections by province and territory up to 2026 are based on the medium-growth scenario of Projection 2 prepared by the Demography Division of Statistics Canada and published in CANSIM Matrices 6900 to 6913, as of November 2000. The implicit assumptions of the medium-growth scenario are a medium fertility rate of 1.48 children per female by 2026, a medium life expectancy of 80.0 years for males and 84.0 for females by 2026, a medium immigration of 225,000 persons a year up to 2026 and a medium internal migration.
Population projections by province and territory after 2026 were derived by multiplying the population of each five-year age group in each province and territory for the year 2026 by the percentage change in Canada's population, as projected from 2026 to 2051 under the medium-growth scenario of Projection 2 prepared by Statistics Canada in November 2000.
In the calculations of per capita expenditures, the population for a given calendar year was used to derive data for a given fiscal year. For example, the population of the calendar year 2000 was used to obtain per capita health expenditures for the 2000-01 fiscal year.
The deflators published by the Canadian Institute for Health Information (CIHI) were used in this model; these are the Government Current Expenditure Implicit Price Index for the public sector and the health portion of the Consumer Price Index (CPI) for the private sector. Both indices are published by Statistics Canada. A table on deflators can be found in the CIHI report National Health Expenditure Trends, 1975-2000.
Price deflators vary depending on the application. As a baseline, most analyses based on real terms use the Gross Domestic Product (GDP) deflator (for general price inflation in the economy) or the CPI. Nevertheless, in the health sector, health-specific deflators must be used to take into account increases limited to health. In further studies, comparisons will be made to estimate the influence of general inflation and of inflation that is specifically related to health.
Most tables presented in the following pages appear as a set of four tables sharing the same title.
Tables ending in "A" generally refer to health expenditures in millions of dollars, expressed as "($' 000,000)" for each age group and sex. Tables ending in "B" provide the percentage distribution of the series, while tables ending in "C" provide expenditures in dollars per capita. Tables ending in "D" provide the percentage change in per capita figures.
In order to better compare the provinces and territories, several tables ending in "D" also provide a percentage distribution calculated with the age standardization method using the population of males and females in Canada for the year 2000-01 as a reference.
Some figures in the tables and charts may not add up to the totals given due to rounding.
The Statistical Tables, which run from page 49 to page 73 must be printed separately, using the PDF file located at the end of the report.
The list of charts of the Statistical Annex is shown here only for reader's information. The Statistical Annex is available on the Health Canada Web site or in print on request.
In the following list, for some chart groupings, the main subject of the figures is first shown in bold print and is followed by the number and title of each corresponding chart.
Per Capita Provincial and Territorial Government Health Expenditures by Age Group and Sex, Canada, 2000-01
The list of tables of the Statistical Annex is shown here only for reader's information. The Statistical Annex is available on the Health Canada Web site or in print on request.
In the following list, the main subject of the tables is first shown in bold print and is followed by the number and title of each corresponding table.
Provincial and Territorial Government Health Expenditures by Age Group and Sex, Canada, Provinces and Territories, 2000-01, by Category of Expenditure