Influencing Factors of Healthcare Expenditure

Health care spending equates to approximately 40% of all provincial/territorial budgets, making health care the single largest expenditure (CIHI, 2015). Of this, Hospital, drug and physician expenditure

In regards to health care spending, Canada ranks amongst the highest spending countries worldwide as reported by Organisation for Economic Co-operation and Development (OECD). In the OECD Health Statistics report (Organisation for Economic Co-operation and Development , 2015), which compares spending in health care across thirty-four countries, Canada ranks in the top quartile (image 4: OECD comparison of GDP allocation).

When we look at expenditure per capita, a different picture emerges. The high-spending countries are Sweden (€62), the USA (€53) and the UK (€43); next is the Netherlands on €31, then France and Germany with €19 and €17 respectively, while countries that have barely started to modernise their health services (such as Italy and Poland) spend about €10 per person.

Canada’s healthcare cost constitutes a large share of GDP. Although this may be a good thing as it reflects on a country’s increased wealth and ability to pay for valued care, however in the case of Canada, there is a strongly held belief that the growth rate in Canada is not sustainable nor is it necessarily improving our outcomes.

In Canada or Great Britain, the government funds healthcare providers through taxes, and such a system is called social. The United States, on the other hand, being a profoundly capitalistic country, opted for another route and passed the burden of healthcare spending on private consumers as well as other

The cost of care has been a growing problem throughout developed nations during the last 15 years. For example, across 34 nations that make up the Organization for Economic Cooperation and Development (OECD), the average per capita health care expenditure increased by more than 70 percent between 2000 and 2010. However, the biggest spenders — such as

In 2010–11, Ontario spent, 40.3% of its total spending on healthcare programs and it was determined that if left unchecked this trend would expand to more than 44% by 2017–18 (Drummond, 2012). Physician remuneration accounts for the third largest share of health dollars (15.5%), behind only pharmaceuticals (15.7%) and hospitals (29.5%) (Canadian Institute for Health Information, 2015). These three categories are by far the largest single categories of expenditure and when combined represent 60% of total health spending. Furthermore it is important to note that the growth rate of physician expenditure (2.2%) has outpaced that of hospitals or drugs since 2007 (Canadian Institute for Health Information, 2015). Due to the pressing nature of ballooning

Therefore, yearly expenditure of the Americans incurred from medical care is about $4,090 per capita whereas Canadians’ yearly expenditure spent in medical care is approximately $2,095 (Evans & Ross, 1999). In Canada, health care system is characterized by a strong government intervention. Health care funding

Amongst the OECD countries the United states accounted for the highest health care spending of 16.9% of GDP in 2012,it is greater than 7.5% above the OECD average of 9.3%1.As compared with the other OECD countries, the United States health spending is evenly distributed between public and private sectors1. The public sectors expenditure on health care was 48%, in 2012, which is well below the average of 72% in other OECD countries1.

In conclusion, there have been economic and political factors that have contributed to national, and international levels which resulted in pressure in the private and public healthcare system. Pharmaceutical companies intend for financial gain for the shareholders and developers to create the largest markets in the industry. Developers promote expensive drugs to shareholders and industries to increase profit. The cost of prescription has stabilized the types of drugs that would increase. Pharmaceutical industry collaborates with doctors to promote their medicines and prescribe their patients. However, there have been several factors affecting drug expenditures in Canada.

Health expenditures are defined by CIA World Fact Book as the statistic that provides the total expenditure on health a percentage of GDP. Those expenditures are activities performed either by institutions or individuals through application of medical knowledge and technology, the primary purpose of which is to promote, restore, or maintain health. This percentage can differentiate countries that spend a lot on health compared to other; those countries that spend a lot on health are typically more economically progressed. The best example of which is the United States being at the top of the list, spending 17.90% of their GDP on health expenditures. Meanwhile the bottom of the list has Burma spending a meager 1.80% of their GDP on health on expenditures.

Healthcare expenditure is an important topic of study as it is often both expensive and significantly funded by the government. In 2014 the World Bank (2014) declared that Healthcare spending in the United States (U.S.) accounted for 17.1% of their Gross Domestic Product (GDP). There are however, variations in healthcare expenditure between regions throughout both the U.S. and other western countries. Baicker (2004) showed that unexplained regional variations in healthcare spending may be indicators of an inefficient healthcare market. By investigating the possible causes of these variations, policy makers may be able to find opportunities to reduce the cost of healthcare without having a detrimental effect on healthcare outcomes. This paper will review four studies which occurred in the U.S. using either Medicare data, surveys linked to Medicare expenditure or other national data sets, to identify potential causes of regional healthcare spending variance. The studies explored both demand side possibilities such as utilization and income as well as supply side factors such as physician beliefs and practices.

It is explicit that in present society national health care is a concern. This article published in 2013 is aimed at showing what healthcare spending will look like in 2013. The article will be used to make a comparison of current national spending showing that it is increasing quicker than expected. Much information in the article shows how money was spent on healthcare during the time the article was published. The article makes inference that there will continue to be an escalation in health spending. (Heffler et al., 2004).

Since 1960 The Organization for Economic Cooperation and Development (OECD) has been gathering information and analyzing multiple healthcare systems that belong or are associated with the organization. There are 34 countries that belong to the organization and multiple other countries that closely collaborate with OECD. The OECD gathers statistics, tracks and compares results across countries to develop better public policies, assess areas of improvement and set standards for every country to follow. According to the statistics, the United States is leading over other countries in areas of research, innovations and technology. However, the spending per capital and also percentage of gross domestic product (GDP) on healthcare in the US towers over other industrialized countries. “The U.S. spent 16 percent of its GDP on health care. This proportion was nearly double the OECD median (8.7%) and over 40 percent more than the country spending the second-largest share of GDP “(D. Squires, 2011).

Canada has one of the most expensive universal healthcare systems in the world and in 2011, a TD