Article Abstract

Online ISSN: 1099-176X    Print ISSN: 1091-4358
The Journal of Mental Health Policy and Economics
Volume 27, Issue 3, 2024. Pages: 75-84
Published Online: 1 September 2024

Copyright © 2024 ICMPE.

Mental Health Expenditure in Canada

Olga Milliken,¹* Hui Wang,² Marie-Chantal Benda,¹ Thy Dinh,¹ Alan Diener¹

¹PhD, Policy Research, Economics and Analytics Unit; Health Policy Branch; Health Canada, Ottawa, Ontario, Canada.
²MSc, Policy Research, Economics and Analytics Unit; Health Policy Branch; Health Canada, Ottawa, Ontario, Canada.

Background: Mental ill-health – illness or conditions related to mental health, including dementia, schizophrenia, mood (affective) disorders, and mental and behaviour disorders due to psychoactive substance and alcohol use – places a significant burden on society in terms of economic, health, and social costs. Focusing on direct health care costs, estimated expenditures on treating mental health conditions accounted for up to 14% of total health expenditures across 12 OECD countries over the period of 2003 to 2010.

Aims of the Study: The purpose of this study was to estimate the direct health care costs associated with the treatment of mental ill-health in Canada for the year 2019 using currently available guidelines. A consistent and systematic method, such as that used in the OECD guidelines on expenditure by disease, age and gender under the System of Health Accounts, can provide valuable information for policy makers and improve comparability of Canadian estimates with those of peer countries.

Methods: To derive comprehensive, and internationally comparable estimates of mental health care expenditures, the results were classified according to the OECD System of Health Accounts 2011 for the following cost components: hospitals, physicians, psychologists in private practice, prescription drugs, and community mental health care. Based on data availability, both public and private expenditures were captured. Where data were lacking, estimates were based on the published literature.

Results: Total expenditure for mental health care was estimated at $17.1 billion in Canada in 2019. Hospital services (inpatient and outpatient) represent the largest component totaling $5.5 billion or 32% of total mental health spending. They are followed by expenditures on prescribed pharmaceutical drugs of $4.3 billion (25%), community-based care of $3.6 billion (21%), physician services of $2.7 billion (16%) and services of psychologists in private practice of $1.1 billion (6%).

Discussion: The study provided the most recent and comprehensive estimate of mental health expenditure in Canada. The results for similar cost components, are comparable to those found in the previous studies. Expenditures directed towards mental health treatment accounted for 6.4% of total health expenditures, and 6.9% of public health expenditures, in 2019, on par with the OECD average of 6.7% for twenty-three countries. Among considered cost components, community-based mental health and addiction services remain an area where further work is needed the most, including a standardized list of services reported by each Canadian province/territory regardless of care setting, service administrator or funder.  In Canada, data challenges are considerable to assess private spending out-of-pocket or through third-party insurance for services by psychologists or psychotherapists, as well as residential and home care. Given data challenges, the total expenditure estimate is likely conservative.   

Implications: Consistent and comparable estimates such as these can be used to better understand how resources are being used in the treatment of mental health, including key cost drivers, and the impact of policy changes, as well as to undertake reliable inter-jurisdictional and international comparisons.