Changing Healthcare Capital-To-Labor Ratios: Evidence and Implications for Bending the Cost Curve in Canada and Beyond

Eric Nauenberg

No 140002, Working Papers from Canadian Centre for Health Economics

Abstract: Healthcare capital-to-labor ratios are examined for the 10 provincial single-payer health care plans across Canada. The data show an increasing trend - particularly during the period 1997-2009 during which the ratio as much as doubled from 3% to 6%. Multivariate analyses indicate that every percentage point uptick in the rate of increase in this ratio is associated with an uptick in the rate of increase of real per capita provincial government healthcare expenditures by approximately $31 (p less than 0.01). While the magnitude of this relationship is not large, it is still substantial enough to warrant notice: every percentage point decrease in the upward trend of the capital-to-labor ratio might be associated with a one percentage point decrease in the upward trend of per capita government healthcare expenditures. An uptick since 1997 in the rate of increase in per capita prescription drug expenditures is also associated with a decline in the trend of increasing per capita healthcare costs. While there has been some recent evidence of a slowing in the rate of health care expenditure increase, it is still unclear whether this reflects just a pause, after which the rate of increase will return to its baseline level, or a long-term shift; therefore, it is important to continue to explore various policy avenues to affect the rate of change going forward.

Keywords: Expenditures; trends; labor; capital; drugs (search for similar items in EconPapers)
JEL-codes: I11 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2014-02, Revised 2014-07
New Economics Papers: this item is included in nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in International Journal of Health Care Finance and Economics, August 2014, pages 1-15

Downloads: (external link)
http://www.canadiancentreforhealtheconomics.ca/wp- ... 14/08/Nauenberg3.pdf Third version, 2014 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cch:wpaper:140002

Access Statistics for this paper

More papers in Working Papers from Canadian Centre for Health Economics Contact information at EDIRC.
Bibliographic data for series maintained by Adrian Rohit Dass ().