Author(s)
Canadian Health Policy Institute (CHPI).
Introduction
The cost and use of medical technologies is often blamed for fast rates of growth in healthcare spending. Significant public resources are spent by governments to assess the cost-effectiveness of things like medical devices and pharmaceuticals. Policy makers devote much less effort to assessing the cost-effectiveness of other components of healthcare spending. What is the actual impact of medical technology spending on the cost of healthcare in the context of total health spending? How affordable is medical technology spending in Canada relative to other countries? Is the singular focus and significant public investment of scarce resources devoted to containing the costs of medical technology in Canada justified by the facts? This study annually examines the evidence regarding medical devices.
Objective
To examine the particular impact of medical device expenditures on total healthcare costs in Canada versus other countries; and to compare the affordability of medical device expenditures relative to per capita GDP in Canada versus other countries.
Data and Method
Data on medical device expenditures (excluding pharmaceuticals), total health spending, and GDP were obtained from World Medical Markets Fact Book 2013 published by Espicom covering 67 countries over the period 2008 to 2013.
Results
On average from 2008 to 2013, of 67 countries for which data were available, Canada ranked 7th for total health spending per capita, but only 13th for medical device spending per capita and 56th when measuring medical device spending as a percentage of total health spending. Medical device spending in Canada declined from 3.55% of total health spending in 2008 to 3.11% in 2013 averaging 3.41% over the period. Canada ranked as low as 35th for medical device spending as a percentage of GDP per capita. Medical device spending per capita accounted for only 0.37% of GDP per capita in Canada on average over 2008-2013.
Conclusion
Between 2008 and 2013 spending on medical devices had a very small impact on overall healthcare costs in Canada relative to almost all of the 67 countries studied and was more affordable relative to GDP in Canada than in almost all of the OECD countries studied. Given the tiny proportional impact of medical device spending, cost containment efforts targeting medical devices in Canada are not likely to produce large overall savings on total healthcare costs. The resources and political effort invested in containing the costs of medical technology would likely produce a bigger total cost-savings return if redirected toward containing the components of the healthcare system that account for the largest shares of total expenditure.
