Province expected to spend nearly $42 billion on health care in ’23

A report released Nov. 1 shows Alberta is expected to spend about $41.9 billion on health care this year.

The Canadian Institute for Health Information says this amounts to around $9,000 per Albertan.

The report says Canada as a whole is expected to spend $344 billion on health care this year which is an increase of 2.8 per cent – or $9 billion from 2022 – with more than half of that spending going directly to hospitals, physicians and drugs. Health spending in the country last year slowed with a 1.5 per cent growth rate after stronger rates of growth of 7.8 per cent in 2021 and 13.2 per cent in 2020. This growth is attributed to the national response to the COVID-19 pandemic. The CIHI report says efforts to clear surgical backlogs and wait times because of the COVID-19 pandemic are driving growth in spending in the hospitals and physicians categories. Hospital expenditures are expected to increase 4.1 per cent this year while physician spending growth is estimated at 6.9%.

“Health spending growth has slowed since the peak of the pandemic,” said Ann Chapman, director of Spending and Primary Care at CIHI in a press release. “Staffing shortages in hospitals, the increased need for both hospital and physician services, contract renewals in an environment of persistently high inflation and population aging may be key drivers of health spending in the coming years.”

CIHI says the growth in health spending this year and in 2022 hasn’t kept pace with inflation and population growth. It says this may be due in part to high inflation rates that haven’t been seen since the 1980s, noting that all economic sectors including health care, have been impacted by price inflation. It says because health care service prices are negotiated and locked into multi-year contracts, health inflation will tend to lag behind inflation in the general economy.

“During the first two-and-a-half years of the pandemic, about 743,000 (13 per cent) fewer surgeries were performed in Canada (not including Quebec) compared with before the pandemic. As a result, hospital spending grew modestly, at 2.1 per cent in 2020. Efforts to reduce backlogs and wait times, along with delayed demand for hospital services, contributed to a rebound in spending growth. Hospital expenditures are projected to increase by 11.1 per cent in 2022 and 4.1 per cent in 2023,” says CIHI. “In 2020, physician spending decreased by 3.7 per cent. This was due in large part to the deferral of care (e.g., delaying routine visits for chronic illnesses, laboratory tests and screenings) because of the pandemic.

“As services gradually resumed, growth in physician spending recovered."