Impact of Recession on Healthcare IT Spending

Monday’s grim news about declines in Canada’s Gross Domestic Product (GDP) got me thinking about the possible impact on healthcare spending in general and on healthare IT spending in particular.  According to a 13 November 2008 news release from the Canadian Institute for Health Information (CIHI), spending on healthcare was projected to grow to an estimated 10.7% of GDP.  The same news release also notes that “this rate has climbed gradually, from 10.0% in 2002, to an estimated 10.6% last year” and that, at 10.7%, it is “the highest rate ever recorded“.  Perhaps even more frightening, Glenda Yates, President and CEO of CIHI, is quoted as saying “Health care spending is expected to grow faster than Canada’s economy, outpacing inflation and population growth.”

Most provinces have noted for the past few years that even in a growing economy, year over year increases in healthcare spending were a significant concern and were looking at various ways to  curb healthcare spending.  Now that the economy is shrinking, how will governments across Canada respond?  We have already seen announcements about possible cutbacks in services and even layoffs.  Will healthcare IT spending be similarly impacted?  Any thoughts?

2 responses to “Impact of Recession on Healthcare IT Spending

  1. As a youngish guy with aging parents and young kids this situation does concern me greatly. There are only so many tax dollars to go around and if we continue to see healthcare spending rise, where will this leave every other service? This is why, to some extent, Obama is looking to revamp their medical system, IT being a part of the solution. I am very encouraged to see the powers that be in Canada are at least seeing IT in the same light..not a cure all but a good investment with more than just monetary ROI.

    My bigger question has nothing to do with healthcare IT. Will future governments have the political willpower to triage actual healthcare spending for services provided to the boomers? Will it come to this? I really hope not, because as a selfish son the last thing I want to see is my own father/mother being adversely affected by a triage decision.

  2. While the bigger question is indeed interesting and of considerable interest to many of us, I don’t feel qualified to comment on how best to deal with rising healthcare costs other than to say that I believe that IT is part of the answer. While IT in and itself can’t and won’t reduce healthcare spending, I believe that it is a key ingredient for the transformation of healthcare services delivery. Hence, I contend that IT expenditures should be viewed as an investment, not an expense.

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