I gave a talk at Memorial University in Newfoundland & Labrador last week sponsored by the Department of Economics and the Collaborative Allied Research in Economics Initiative ( CARE ). My talk was based on joint research currently underway with David Cantarero Prieto at the University of Cantabria in Spain comparing the determinants of government health spending in Canada and Spain and particularly the role of physicians as a factor in that spending.

Briefly, the presentation studied the impact of physicians on health care expenditure and its dynamics over time in Canada and Spain for two overlapping time-spans of provincial/regional data availability: Canada, 1981 to 2013 and Spain, 2002 to 2013. Regression analysis found that physician numbers were a statistically significant driver of real per capita provincial government health expenditures in Canada but not for regional government health expenditures in Spain despite the fact that the per capita number of physicians is greater in Spain. It should also be noted that in Canada fee for service still accounts for about 70 percent of physician remuneration while in Spain physicians are on salaries.

Supplier induced demand therefore may more characterize the health sector in Canada but not necessarily in Spain. However, in terms of its contribution as an expenditure driver in Canada, the effect was pretty modest. Indeed, technology (as measured by a time trend) and the proportions of population aged 25 to 64 (and not 65 and over) were more important drivers.

More interesting, I think was the additional take away that Spain appears to be achieving health outcomes that are the equivalent or better than Canada and is doing so with more resources per capita in a number of areas (eg. medical technology, physicians per capita, etc...but not nurses it turns out) but also while spending less per capita. Its infant mortality rates are now lower than Canada and its life expectancy at birth is higher even though the rates of drinking and smoking in Spain are still higher than Canada’s.

The seminar was well attended and the students and faculty who attended very engaged and a theme in the comments and questions was what about the impact of other factors – or other differences in the two systems. To that effect, I have put together a few charts below presenting some additional health spending/system comparisons of Canada and Spain from the OECD Health Statistics. Enjoy.

Thanks again to the Economics Department at Memorial for the invite. I had a great visit.













