Author: Brian Ferguson
Expenditure on Medical Care in Canada: Looking at the Numbers
demonstrates that medicare’s much-heralded success at cost control is illusory. Simply put, the introduction of medicare did not introduce a period of health care cost control in Canadian health spending.
The reason the Canadian health expenditure to GDP share fell below the US figure was not because of differences in the rate of growth of health spending, but rather because Canada happened to have the good fortune to bring medicare in during a period in which the Canadian economy outdid the US economy in terms of real growth.
Had our economic growth been as weak as US growth through the 1970s and ’80s, for two decades our health spending to GDP share would have been higher than the actual US GDP share. In other words, Canada would have had the most expensive health care system in the world, a situation that would have changed only in the 1990s when governments got serious about its fiscal crisis.