Value for money: an evaluation of health spending in Canada

Abstract

The long-term increase in international health spending sparked concerns about sustainability of health care systems but also the impact of such spending and the value for money from health spending. The period since 1975 has witnessed an increase in per capita health spending in Canada along with improvements in health outcomes. This paper is an economic evaluation of health spending in Canada-an analysis of the cost-effectiveness of aggregate health spending. Estimates of the cost per quality-adjusted life-year (QALY) are made for the whole 1980-2012 period and for four sub-periods of time-1980-1989; 1989-1998; 1998-2007 and 2007-2012. This is done for both the general population as well as Canadian seniors. Under a medium contribution of health spending to life expectancy scenario for the 1980-2012 period, the costs per QALY gained averaged $16,977 and $14,968, respectively for the general population and the seniors. This suggests that the Canadian health system produces relatively good value for money, especially for the seniors. After applying separate adjustments to match total health spending in the US and NHS health spending in the UK, we found that costs per QALY gained in Canada were generally lower than those found for the US, but not for the UK.

Keywords: Canada; Evaluation; Health spending; Outcomes.