Non-Insured Health Benefits Program - 2004-2005 Annual Report

4 NIHB Expenditure Trends

From 1988/89 to 1995/96, expenditures for the Non-Insured Health Benefits (NIHB) Program grew steadily from approximately $214 million to over $500 million. Factors contributing to this growth were: the rising cost of benefits, First Nations and Inuit population growth, an increase in eligible clients accessing benefits, provincial health care reform and the delisting of NIHB clients from provincial and territorial extended health care services. The growth trend changed in 1996/97 where actual expenditures decreased from $505.3 million in 1995/96 to $489.3 million in 1996/97, a 3.2% reduction. In 1997/98, 1998/99, 1999/00, 2000/01, 2001/02, 2002/03 and 2003/04 expenditures increased by 3.8%, 1.6%, 5.7%, 5.7%, 9.0%, 9.6% and 7.1% respectively.

In 2004/05, expenditures increased by 4.2% to $767.7 million from $736.9 million in 2003/04 as a result of the following factors:

• increased population and utilization;
• increased benefit costs;
• inflation; and
• changes to provincial health care systems.

In the past 10 years, annual rates of growth in Program expenditures have ranged between a low of -3.2% (1996/97) to a high of 9.6% (2002/03).

During the last several years, NIHB management initiatives have included:

• automation of client benefit claims payment processes;
• improved financial and management practices;
• improved management of medical transportation costs in most regions;
• establishment of special authorization on high cost drugs;
• predetermination of dental benefits;
• improved management of mental health services in targeted areas;
• ongoing drug benefit list reviews;
• improved audit and accountability measures; and
• reimbursement of best price alternative product (generic drug) in accordance with provincial formularies.

Figure 4.1
NIHB Annual Expenditures ($ Million)
1994/95 to 2004/05

In 2004/05, NIHB expenditures were $767.7 million, up 4.2% from $736.9 million in 2003/04.

The 4.2% growth in 2004/05 expenditures is the lowest percentage increase experienced since 1998/99.

Source: FIRMS adapted by Program Analysis Division

Figure 4.2
Percentage Change in NIHB Annual Expenditures
1994/95 to 2004/05

Expenditures on the Non-Insured Health Benefits Program totalled $767.7 million in 2004/05. This represents a 4.2% increase from 2003/04.

NIHB expenditures have risen 60.4% from $478.6 million in 1994/95 to $767.7 million in 2004/05. Growth rates declined from 6.6% in 1994/95 to -3.2% in 1996/97 followed by a 3.8% increase in 1997/98. From 1998/99 to 2002/03, growth rates climbed from 1.6% to 9.6%. Since 2002/03, growth rates have declined to 4.2% in 2004/05.

Source: FIRMS adapted by Program Analysis Division

Figure 4.3
NIHB Annual Expenditures by Benefit ($ 000)
1994/95 to 2004/05

Expenditures on pharmacy benefits increased more than the other benefits in the period from 1994/95 to 2004/05. Pharmacy costs rose by 135.3% from $146.1 million in 1994/95 to $343.9 million in 2004/05. Vision care costs rose 53.5%. Transportation costs grew by 51.7%, while dental costs grew by 22.9%. By comparison, other health care costs decreased by 47.4% and premiums costs by 2.7%.

From 2003/04 to 2004/05, dental costs, pharmacy expenditures, transportation costs and other health care costs and vision care costs increased by 6.3%, 5.2%, 2.8%, 2.1% and 0.9% respectively. Premium costs showed a decrease of 2.7%.

Source: FIRMS adapted by Program Analysis Division

Figure 4.4
Percentage Growth in NIHB Expenditures by Region
1994/95 to 2004/05

In the period from 1994/95 to 2004/05, total NIHB expenditures have increased at a faster rate in the N.W.T./Nunavut (115%) than in any other region. The Manitoba Region (89%) and Saskatchewan Region (73%) had the next largest growth rates. The Alberta Region had the lowest increase at 25% as a result of significant reductions in expenditures in other health care benefits and premiums. The Yukon Region registered the next lowest increase at 52%. Growth rates over the ten year period in other regions are: Ontario (59%), Pacific (56%), Quebec (54%) and Atlantic (53%).

Pharmacy expenditures in the in the N.W.T/Nunavut rose by 201% in the ten year period ending in 2004/05. The next three largest regional increases occurred in the Quebec (186%), Manitoba (168%) and Ontario (145%) regions.

Expenditures in transportation grew most in the N.W.T./Nunavut (136%) and the Manitoba Region (72%), and least in the Quebec and Atlantic Regions (4%).

Growth rates in dental expenditures are highest in the N.W.T./Nunavut (72%), followed by the Saskatchewan (60%) and Manitoba (43%) regions. The Yukon region showed a decrease in dental costs at -16% resulting from reduced access to services.

Growth Rate in Total NIHB Expenditures,
1994/95 to 2004/05

Source: FIRMS adapted by Program Analysis Division

Figure 4.5
NIHB Annual Expenditures in Atlantic Region by Benefit
1994/95 to 2004/05

Total expenditures in the Atlantic Region were $30.4 million in 2004/05, an increase of 3.3% from the previous year.

The largest increases were other health care (14.7%) and pharmacy costs (7.8%), while dental costs rose modestly by 1.6%.

Expenditures in transportation decreased by 5.8% while vision care costs decreased slightly by 0.8% in 2004/05.

Growth Rate in Total NIHB Expenditures,
Atlantic Region 1994/95 to 2004/05

Source: FIRMS adapted by Program Analysis Division

Figure 4.6
NIHB Annual Expenditures in Quebec Region by Benefit
1994/95 to 2004/05

Total expenditures in the Quebec Region were $59.8 million in 2004/05, an increase of 5.8% from the previous year.

Vision care costs had the largest increase from the previous year at 22.9%. Pharmacy expenditures increased by 9.2% while dental and transportation costs rose 2.4% and 1.8% respectively.

Other health care was the only benefit to decrease (-4.0%).

Growth Rate in Total NIHB Expenditures,
Quebec Region 1994/95 to 2004/05

Source: FIRMS adapted by Program Analysis Division

Figure 4.7
NIHB Annual Expenditures in Ontario Region by Benefit
1994/95 to 2004/05

Total expenditures in the Ontario Region were $140.3 million in 2004/05, an increase of 4.1% from the previous year.

Pharmacy costs had the largest increase at 7.2% in 2004/05, followed by both dental and other health care costs at 6.8% and vision care costs at 4.5%.

The only benefit to decrease was transportation expenditures by 3.7%.

Growth Rate in Total NIHB Expenditures,
Ontario Region 1994/95 to 2004/05

Source: FIRMS adapted by Program Analysis Division

Figure 4.8
NIHB Annual Expenditures in Manitoba Region by Benefit
1994/95 to 2004/05

Total expenditures in the Manitoba Region were $137 million in 2004/05, an increase of 7.1% from the previous year.

Pharmacy costs had the highest increase at 11.3% from the previous year, followed by dental costs at 8.0%, transportation cost at 4.4% and other health care costs at 1.1%.

The only expenditure cost to decrease was vision care by 7.1%.

Growth Rate in Total NIHB Expenditures,
Manitoba Region 1994/95 to 2004/05

Source: FIRMS adapted by Program Analysis Division

Figure 4.9
NIHB Annual Expenditures in Saskatchewan Region by Benefit
1994/95 to 2004/05

Total expenditures in the Saskatchewan Region were $104.7 million in 2004/05, an increase of 5.9% from the previous year.

Pharmacy expenditures increased by 7.5% followed by dental costs at 6.7%. Expenditures in transportation costs were up 3.5% and vision care rose slightly by 1.7%.

Other health care costs decreased by 3.2% in 2004/05.

Growth Rate in Total NIHB Expenditures,
Saskatchewan Region 1994/95 to 2004/05

Source: FIRMS adapted by Program Analysis Division

Figure 4.10
NIHB Annual Expenditures in Alberta Region by Benefit
1994/95 to 2004/05

Total expenditures in the Alberta Region were $118.4 million in 2004/05, an increase of 3.4% from the previous year.

Other health care costs had the highest increase at 7.5%, followed by pharmacy costs at 5.7%, vision care costs at 3.2%, transportation costs at 2.3% and premium costs at 1.4%.

Dental care expenditures remained virtually unchanged, increasing by 0.4%.

Growth Rate in Total NIHB Expenditures,
Alberta Region 1994/95 to 2004/05

Source: FIRMS adapted by Program Analysis Division

Figure 4.11
NIHB Annual Expenditures in Pacific Region by Benefit
1994/95 to 2004/05

Total expenditures in the Pacific Region were $104.6 million in 2004/05, an increase of 4.4% from the previous year.

Dental costs showed the largest increase at 11%, followed by transporation and pharmacy costs both at 5.7%.

Premiums costs decreased by 5.8%, while other health care costs declined by 4.4%. Vision care expenditures remained virtually unchanged (-0.3%).

Growth Rate in Total NIHB Expenditures,
Pacific Region 1994/95 to 2004/05

Source: FIRMS adapted by Program Analysis Division

Figure 4.12
NIHB Annual Expenditures in Yukon by Benefit
1994/95 to 2004/05

Total expenditures in the Yukon were $7.0 million in 2004/05, an increase of 8.7% from the previous year.

Vision care costs and other health care costs had strong growth, with increases of 114.9% and 58.3% respectively. Transportation expenditures were up by 10.9% and pharmacy costs were 8.2% higher.

Only dental expenditures were down (-10%) from last year.

Growth Rate in Total NIHB Expenditures,
Yukon 1994/95 to 2004/05

Source: FIRMS adapted by Program Analysis Division

Figure 4.13
NIHB Annual Expenditures in the Northwest Territories and Nunavut by Benefit 1994/95 to 2004/05

Total expenditures in N.W.T. and Nunavut were $49.1 million in 2004/05, an increase of 10.5% from the previous year.

Dental costs had the highest increase at 17.8% followed by transportation costs at 11.1% and pharmacy costs at 8.6%.

The only exception was vision care costs which were down 23.2%.

Growth Rate in Total NIHB Expenditures,
Northwest Territories & Nunavut 1994/95 to 2004/05

(1) Data anomaly due to possible FIRMS coding error. Data should be interpreted with caution.

Source: FIRMS adapted by Program Analysis Division