More arithmetic of health care
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* Norman Kalant

*   © 2005 CMA Media Inc. or its licensors

Janice MacKinnon's health care arithmetic is incorrect.1 She uses a figure of 8% as the annual rate of growth of health care costs in Ontario, but this value is based on current dollars and therefore does not take into account inflation or growth of the population.

The correct calculation should be based on per capita spending of constant dollars. The Canadian Institute for Health Information gives the following figures for annual rate of growth in these terms: 2.6% from 1974 to 1991, –0.03% from 1991 to 1996, and 4.4% from 1995 to 2003.2 It is highly probable that the negative rate of growth for 1991 to 1996 corresponds to the decrease in health care transfers that occurred during the early 1990s; the subsequent increase in rate of growth is due to the replacement of part of those funds.

Furthermore, MacKinnon's reference to the increasing percentage of provincial budgets devoted to health care1 is almost irrelevant, since the percentage depends on revenues as well as on expenditures. The provincial governments have decreased their revenues by cutting income taxes but have then implied that the increased percentage spent on health care is due to an increase in expenditures.

Finally, all the figures quoted so far have been for total health care expenditures, but what we should be debating are expenditures for the public health care system (and the services provided). The cost of our medicare system is the amount spent by the provincial governments, equivalent to 63.8% of total health care costs.2

## References

1.  1. MacKinnon JC. The arithmetic of health care [editorial]. CMAJ 2004;171(6):603-4.
    
    [FREE Full Text](http://www.cmaj.ca/lookup/ijlink/YTozOntzOjQ6InBhdGgiO3M6MTQ6Ii9sb29rdXAvaWpsaW5rIjtzOjU6InF1ZXJ5IjthOjQ6e3M6ODoibGlua1R5cGUiO3M6NDoiRlVMTCI7czoxMToiam91cm5hbENvZGUiO3M6NDoiY21haiI7czo1OiJyZXNpZCI7czo5OiIxNzEvNi82MDMiO3M6NDoiYXRvbSI7czoyMjoiL2NtYWovMTcyLzYvNzI5LjIuYXRvbSI7fXM6ODoiZnJhZ21lbnQiO3M6MDoiIjt9) 

2.  2. *National health expenditure trends 1975–2003*. Ottawa: Canadian Institute for Health Information; 2003. p. 5.