Economic Burden of Illness in Canada, 1993

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Appendix 2

Definitions

National Health Expenditures in Canada, 1975-1994

All expenditures in National Health Expenditures in Canada, 1975-1994 (NHEC) are based on public and private sectors of finance. The four main areas of public sector finance are these.

• federal direct health expenditures
• provincial and territorial government health expenditures (supported by health-related federal transfers to the provinces and provincial and territorial government funds)
• municipal government health expenditures
• workers' compensation board health expenditures

Private sector health expenditures are subdivided into three major categories.

• expenditures from health insurance plans (commercial and non-profit)
• out-of-pocket expenditures of individuals
• revenue of health care institutions from patient and non-patient services

Unless otherwise stated, total direct health expenditures are based on NHEC figures. In the NHEC report, total health expenditures always refer to the sum of public and private sectors of finance.

For more details, refer to Health Canada's National Health Expenditures in Canada, 1975-1994 (or the 1975-1987 version for some of the definitions of terms).

Drug Expenditures

The IMS audits include:

• prescription drugs used in hospitals or purchased in computerized chain and independent retail drug stores, whether paid through provincial or other third party plans or directly by the patient
• some non-prescription drugs prescribed by a physician and dispensed by a pharmacist in a retail drugstore

and exclude:

• non-prescription products sold in retail outlets other than drugstores
• prescription drugs supplied by dispensing physicians
• drugs prescribed by specialized health centres/clinics (e.g. cancer, family planning) outside of hospital
• drugs prescribed in other institutions (These are included in Expenditures for Care in Other Institutions.)

The NHEC national drug expenditure includes:

• prescription drugs, non-prescription drugs and personal health supplies purchased in retail stores

and excludes:

• drugs prescribed in hospitals and in other institutions (These are included in Hospital Care Expenditures and Expenditures for Care in Other Institutions.)

The NHEC cost estimates for prescribed drugs are derived from figures obtained from federal, provincial and territorial governments, workers' compensation boards, private insurers and Statistics Canada's Survey of Family Expenditures. Cost estimates for non-prescription drugs and personal health supplies were developed from a special tabulation obtained from A.C. Nielsen (Canada).

Physician Care Expenditures

The NHEC national physician expenditure includes:

• professional fees paid by provincial medical care insurance plans
• physicians' salaries and contractual professional incomes
• fee payments by workers' compensation boards
• direct expenditures by federal agencies and private sector payments for physicians' services not covered by provincial plans

and excludes:

• physicians on hospital, public health agency payrolls, etc. (These are included in Hospital Care Expenditures).

The Manitoba physician expenditure includes:

• payments made on a fee-for-service basis and excludes:
• psychiatrists paid through the provincial mental health services branch
• radiologists and pathologists paid through hospitals
• out-of-province medical care costs
• optometric, oral, dental, periodontal and chiropractic services and costs

Hospital Care Expenditures

Acute care hospitals include:

• non-teaching general hospitals with no long-term care units
• non-teaching general hospitals with long-term care units
• pediatric hospitals
• teaching general hospitals (excluding pediatric)
• nursing stations, outposts
• other (cancer hospitals, cardiology hospitals or institutes, maternity hospitals, neurological institutes, orthopedic hospitals, etc.)

Long-term care hospitals include:

• extended care hospitals (including chronic)
• rehabilitation hospitals (including convalescent)

Psychiatric hospitals include:

• short-term care, including alcohol/drug recovery
• long-term care

Statistics Canada hospital expenditures include the costs, on an accrual basis, of operating and maintaining the reporting public hospital during the year. This includes gross salaries and wages covering all medical staff remuneration, employee benefits, supplies and other expenses.

Refer to Statistics Canada's Hospital Statistics: Preliminary Annual Report, 1993- 94 for more detail.

Expenditures for Care in Other Institutions

The Health Canada definition of Other Institutions includes residential care facilities for the following groups:

• aged (including nursing homes)
• physically handicapped
• mentally handicapped
• developmentally delayed
• psychiatrically disabled
• clients with alcohol and drug problems
• emotionally disturbed children

These estimates do not include:

• non-health expenditures in these facilities
• facilities solely of a custodial or domiciliary nature (i.e. Type I care or less)
• facilities for transients and delinquents

Types of Care

Self-sufficient:

• only minor supervision required

Type I care:

• less than 90 minutes, in a 24-hour day, of supervision and/or assistance with activities of daily living and provision of support in meeting psycho-social needs

Type II care or higher:

• a minimum of 1.5-2.5 hours, in a 24-hour day, of medical and professional nursing supervision and provision of support in meeting psycho-social needs

Health Science Research Expenditures

Additional categories include the following:

Basic Research

• metabolism
• immunology
• cell and molecular biology
• embryology
• other basic research not classified

Education/Medical History

• certain conferences
• workshops
• symposia
• visiting professors and scientists
• scholarships
• studentships
• fellowships
• travel grants
• history of health care

Equipment/Capital

Health

• general health promotion and disease prevention programs
• approaches to patient care
• communication with health professionals

Granting sources not included in the Medical Research Council's Reference List:

• agencies situated outside Canada (e.g. National Institutes of Health)
• Canadian and foreign business enterprises (e.g. pharmaceutical industry)
• smaller, local and regional agencies and foundations
• endowments and funds at the discretion of universities, hospitals and affiliated institutions

Additional Direct Health Expenditures

Other professionals include chiropractors, optometrists, podiatrists, osteopaths, naturopaths, private duty nurses and physiotherapists.

Home care represents "care rendered to patients in the patients' homes by nursing or other staff." When home care is provided by a hospital, it is included in Hospital Care Expenditures.

Other private health care costs comprise extended health benefits (hearing aids, appliances, etc.) that many insurance companies were unable to categorize.

Public health consists of "governmental expenditures for the prevention of disease and the protection of health and for the general administration of health departments . . . The internal administration of health institutions (hospitals, nursing homes, etc.) is treated as part of the expenditures for institutional care."

Capital expenditures include "expenditures on construction, machinery and equipment of hospitals, clinics, first-aid stations, and homes for special care."

Prepayment administration "is intended to measure the cost of having insurance coverage; that is to say, the amount of expense over and above the cost of the health care rendered that is involved in providing that care on a prepaid basis."

Miscellaneous health costs comprise the following three subcategories.

• Training of health workers: "reported expenditures, by federal and provincial departments responsible for health, that are specifically designated as being for the training of health workers. Only incidental expenditures of the departments are included here, not the cost of programs for complete training of persons to become health workers. Where the expenditures for training are made by hospitals, the amounts are included under [Hospital Care Expenditures]."
• Voluntary health organizations: "selected expenditures of certain national non-profit health organizations. The figures . . . exclude data for personal health care and for research, which have been included under other headings."
• Occupational health expenditures: "expenditures to promote and enhance health and safety at the workplace and to provide emergency care in the event of injury at work."

Mortality Costs

Employment income refers to total income received by persons 15 years of age and over during 1993 as wages and salaries, net income from unincorporated non-farm business and/or professional practice, and net farm self-employment income.

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