During the 1970s the share of health care expenditure in Canadian GNP remained roughly stable, in the range of 7-71/4 percent of GNP, in marked contrast to its escalation in most other countries (the U.S. in particular) and to previous Canadian experience. The shift to a stable pattern coincided with the completion of the Canadian system of universal comprehensive public hospital and medical care insurance. This paper explores how and why the public insurance system served to contain cost escalation. It then discusses the inadequacy of expenditure experience per se as a basis for health system evaluation–the same data will support claims of both “underfunding” and “spiralling costs.” More serious questions involve the influence of alternative patterns of health care funding and delivery on the effectiveness and efficiency of care provision, and the resulting distributional patterns of care and income. A brief sketch is given of the present situation and future possibilities of Canadian health care under these heads.

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