Value for money: an evaluation of health spending in Canada

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.     

Public and private pharmaceutical spending as determinants of health outcomes in Canada

Canadian per capita drug expenditures increased markedly in recent years and have become center stage in the debate on health care cost containment. To inform public policy, these costs must be compared with the benefits provided by these drugs. This paper measures the statistical relationship between drug spending in Canadian provinces and overall health outcomes. The analysis relies on more homogenous data and includes a more complete set of controls for confounding factors than previous studies. Results show a strong statistical relationship between drug spending and health outcomes, especially for infant mortality and life expectancy at 65. This relationship is almost always stronger for private drug spending than for public drug spending. The analysis further indicates that substantially better health outcomes are observed in provinces where higher drug spending occurs. Simulations show that if all provinces increased per capita drug spending to the levels observed in the two provinces with the highest spending level, an average of 584 fewer infant deaths per year and over 6 months of increased life expectancy at birth would result.