Canada’s health care costs climb to $308 billion in 2021 due to COVID-19: CIHI report

A new report is casting a dire prediction for Canada’s health care costs, due to the COVID-19 pandemic.

The Canadian Institute for Health Information (CIHI), a not-for-profit organization, estimates a record $308 billion will be spent in 2021 on health care.

The CIHI says that amounts to about $8,019 per Canadian.

It’s a 2.2 per cent growth from last year. But the damage was already done in 2020 when there was a 12.8 per cent increase, which was three times the average growth rate seen in 2015 to 2019.

The biggest change? The pandemic, according to CIHI.

A look at the estimated breakdown of health care spending by category shows hospitals are by far the most expensive. (cihi.ca)

Hospitals, drugs, and physicians account for the largest shares of health dollars, and the addition of COVID-19 response funding bumped spending up seven per cent.

The funding includes the cost of treatment such as intensive care units, vaccinations, and contact tracing.

Christopher Kuchciak with CIHI says the changes are not surprising due to the cost drivers.

“Policy makers right now are really running two races: one is a sprint to provide an emergency response funding to deal with the pandemic…  and then there’s the marathon where there are issues that policy people were dealing with long before the pandemic. Such as an aging population,” he said.

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At the same time, the pandemic forced many hospitals to postpone surgeries and close outpatient departments, which should have brought costs down. But, even though CIHI says surgery numbers fell 22 per cent compared to pre-pandemic times, the average COVID-19 patient has a larger financial impact on the system. For example, a COVID-19 patient’s average stay in hospital is three times as long as a patient who suffered a heart attack, the report details.

“It is anticipated that health expenditure will represent 12.7% of Canada’s gross domestic product (GDP) in 2021, following a high of 13.7% in 2020,” the report reads.

However, these are spending estimates, and once actuals are known, the numbers may be revised.