More health-care spending an expensive way to buy health

It’s budget season and provincial governments are continuing to spend more on healthcare than any other portfolio.

For example, Alberta spends almost half its budget on health — an estimated $22 billion this year — which is more than any other ministry. After adjusting for population and inflation, Alberta healthcare spending has more than doubled since 1995. Ontario committed $61 billion. about 40 per cent of the overall budget, to health.

A technician operates an MRI machine. Four more scanners will be bought for installation in BC hospitals in 2018, the health ministry announced in 2017. Jeff McIntosh, The Canadian Press

Daniel Dutton and Jennifer Zwicker, The Province May 8, 2018

This large share of public spending on health suggests these governments truly want to improve the health of the population. We know, intuitively, that increased health spending should correspond with additional services and better access, which in turn should lead to improved health outcomes.

Yet, research highlights the importance of social and health spending when trying to improve health outcomes. This is because health responds to socio-economic factors such as income, education, employment and social support networks. These are sometimes called “the social determinants of health.”

If government wants to improve the health of their population, is healthcare the best place to invest? Our analysis suggests no.

Using provincial expenditure data in Canada, we found that more spending on social services per dollar spent on health care services is associated with better health outcomes. In other words, if a government had $600 million to spend (approximately the increase in health spending in Alberta this year), it might do more for population health to spend that money on social services than health care.

You might ask: Why does social spending do anything at all to improve the health of the population? Population health is measured in terms of outcomes like life expectancy and potentially avoidable mortality. Expenditure on social services mitigate the factors that lead to these poor health outcomes. This includes spending on programs for people with disability and their families, supporting low-income families and helping them find employment, preventing family violence, community investment in mental health initiatives and homelessness programs.

Homelessness is an extreme example and it is clear that the health of homeless people is worse than that of the general population. This has motivated some U.S. hospitals to fund affordable housing as it can have more impact on health outcomes compared to spending on health-care services.

Yet in annual budgets, governments consistently choose to allocate dollars to health ministries rather than social services. Spending on health care in real per-capita terms across the country has doubled since 1981 while social spending has seen little growth.

In fact, Canada spends the least on social programs as a percent of GDP compared to 10 other high-income countries. This is an implementation issue as Canada was once a thought leader in this area with a 1974 report, New Perspectives on the Health of Canadians being one of the first studies to propose a comprehensive framework for understanding health determinants.

If you listen to provincial governments during budget season, it would seem they are doing all they can to ensure the health of their populations. Often they point to “spending on health” as evidence of their dedication to the issue. What they mean by “spending on health” is spending on health care. Yet we lack evidence that supports the idea that additional health-care spending is the most efficient way to improve health outcomes.

Deciding how to allocate money is no easy task. Many stakeholders battle for their slice of the government spending pie based on historical trends. Yet, we know that historical spending choices are not a good indication of the right spending mix and that our current spending patterns on health care are unsustainable. If we don’t change how we are spending our money today, the broader well-being of current and future generations of Canadians is the cost.

Daniel Dutton is a post-doctoral scholar at the School of Public Policy, University of Calgary.
Jennifer Zwicker is an expert advisor with, a director of health policy at the School of Public Policy and Assistant Professor in the Department of Kinesiology at the University of Calgary.

Source The Province via


A version of this commentary appeared in the Winnipeg Free Press


Effect of provincial spending on social services and health care on health outcomes in Canada: an observational longitudinal study, Daniel J Dutton, Pierre-Gerlier Forest, Ronald D Kneebone and Jennifer D Zwicker. CMAJ January 22, 2018 190 (3) E66-E71; DOI: 10.1503/cmaj.170132. Full text, PDF

  Further reading

Changing Health-Related Behaviors 2: On Improving the Value of Health Spending, Dickson K, Wilson R, Parfrey O, Parfrey PS. Methods Mol Biol. 2021;2249:553-569. doi: 10.1007/978-1-0716-1138-8_30.

The need for health in all policies in Canada, Kershaw P. CMAJ. 2018 Jan 22;190(3):E64-E65. doi: 10.1503/cmaj.171530. Full text

Creating the conditions that allow health for all to emerge, Sturmberg JP. CMAJ. 2018 Mar 26;190(12):E371. doi: 10.1503/cmaj.69129. Full text

Economic Evaluation of Interventions for Children with Neurodevelopmental Disorders: Opportunities and Challenges, Lamsal R, Zwicker JD. Appl Health Econ Health Policy. 2017 Dec;15(6):763-772. doi: 10.1007/s40258-017-0343-9. Full text

Also see
For Healthier Provinces, Stop Spending Ever More On Health Care The Huffington Post
International Health Care Spending Data: What They Can Tell Us, And What They Can’t Health Affairs
Transforming Health Care from the Ground Up Harvard Business Review

Mobility Menu

follow us in feedly

Call 403-240-9100