Health Care Spending - How Much is Enough?

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When it comes to health care spending, more money doesn’t equal better outcomes.

Bloomberg recently compiled a ranking comparing health care economics and life expectancy. Of the parameters, the strongest correlation is found between health care cost per capita and life expectancy. However, the association is far from linear.

Up until ~$3000, there is a logarithmic rise in life expectancy as the dollars spent increase. Then, a plateau. Canadians, which have life expectancies similar to the Greek and Portuguese, spend twice as much (or, get half the bang for their buck).

This plateau is even more pronounced when increasing the countries analyzed. Gapminder , an interactive indicator goldmine headed by statistical genius Hans Rosling, even provides a time-based visualization. In the last 15 years, small investments in developing nations have had large effects on outcomes (the logarithmic part of the curve).  All the while, Canada’s 280% increase in spending  resulted in marginal health benefit improvement.

When comparing health care costs as a percentage of GDP the correlation is weaker though affirming that economic vitality tends to be predictive of better health.   .

From a global perspective, much could be done to decrease inequities and improve lives by investing little.

At home, we seem stuck on the notion that more money will solve our woes. Provincial budgets are closing in on 50% devoted to health care, and continue to grow above inflation. These funds are all too often it’s siphoned from other provincial departmental pots such as environment, housing, social development, public safety, child & family development, agriculture, and advanced education. Those departments with the greatest influence on the determinants of health are losing out to  direct health care expenditures.

A different approach to spending is essential, and a gradual paradigm shift is in progress. Take the CMA’s recent summary of cross-country town halls addressing precisely this issue: “to improve health, tackle poverty.” While the CMA proudly pronounce that doctors have been sending this message for the last seven years, many public health doctors and other professionals have been strong advocates for the same message for decades.

We can all be vocal about our government fiscal direction and ensure investing in health care won’t be detrimental.