Premier releases Interim Report on Understanding Canada�s Health Care Costs

Premier Tobin today released an Interim Report on Understanding Canada�s Health Care Costs. The report is being released simultaneously by all provinces and territories as a basis for further discussion on the sustainability of the health care system..

This interim report, prepared by provincial/territorial Ministers of Health, makes the following observations:

In the past few years, spending on health care has averaged 4.2 per cent annually. Rising health costs are attributable to a number of factors, including demographics, new and emerging technologies, pharmaceuticals, increased incidence of chronic and new diseases, and inflation.

Total provincial/territorial health expenditures have increased from $11 billion in 1977/78 to $56 billion in 1999/2000. Recent provincial/territorial health budgets have risen well in excess of inflation, population or economic growth.

At the same time, the federal government�s relative contribution in support of the Canadian health care system has declined, resulting in a "funding gap" between the relative contributions of federal and provincial governments. This is true even when federal "tax points" are included.

In addition to backfilling the "gap" created by reduced federal funding, provinces/territories are investing heavily in health system renewal and innovations. All provinces and territories have already been actively engaged in a wide range of health system renewal initiatives and innovations aimed at making our health systems more accessible, appropriate and sustainable.

Demographic trends, such as our aging population, will result in continued escalation of costs. Additionally, major innovations, reforms and the application of emerging technologies will have significant impacts on future costs.

The rising need for additional health services is not sustainable without significant new federal funding and involvement.

"I believe the most important conclusion of this report is that, while Canada�s publicly funded health care system is not in crisis, the cost pressures and constraints on the system are real", the premier said. "Clearly, an effective and renewed federal-provincial partnership is essential to meeting these cost pressures. I look forward to working with the federal government and the other provinces and territories to ensure that our health care system continues to meet the needs of Canadians."

The Interim Report was provided to the Government of Canada earlier today as a basis for discussion. It will be finalized over the next few months.

Media contact: Heidi Bonnell, Office of the Premier, (709) 729-3564.

Note to Editors: A copy of the Interim Report on Cost Drivers and Health System Sustainability is available on-line at www.gov.nl.ca/publicat/hreport.pdf

2000 06 09                         2:40 p.m.