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The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

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Blowing the Healthcare Budget: Intentions versus Results

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Government healthcare budgets have tended to outpace Canada’s economy, raising concerns about endlessly rising taxes. Initial projections of spending on healthcare from the Canadian Institute of Health Information recently suggested moderating growth rates. The most recent figures, however, show an acceleration. Worse, the initial projections – which rely on government budgets – have historically turned out to be too low. The revised figures based on actual spending are nearly always higher – and by amounts that suggest governments’ healthcare spending is still growing unsustainably.

This edition of Graphic Intelligence looks at the difference in preliminary and revised figures on spending by the use of funds in each province and territory over the 2014-16 period. The big-ticket items – hospitals and doctors – typically show smaller over-runs, but the dollar amounts are large. Drugs are a concern – as are “other” professionals and services. Both budgeted increases and over-runs tend to be smaller in eastern Canada, and larger in the West and North.

Addressing this tendency to overshoot budget targets – and the consequent threat to healthcare’s sustainability – will require reforms to encourage more cost-conscious behavior from officials, managers, providers and patients, as well as better budgetary discipline overall. To read more about how governments can hit their healthcare spending targets, read “Healthcare Costs in Canada: Stopping Bad News Getting Worse.”

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© 2014 C.D. Howe Institute. All Rights Reserved.

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© 2014 C.D. Howe Institute. All Rights Reserved.