Calculation of Cost Savings in Healthcare Due to Poverty Reduction
Canadians with low-income experience poorer health outcomes than average Canadians (1).
Building on a model from Feed Ontario (2019), we can assess the health system costs of poverty by looking at total public health expenditures by income quintile in Canada (Table 1).
- The total cost of healthcare spending for Canada comes from the National Health Expenditure Trends report for the period of 1975 to 2019. The total amount is then distributed across income quintiles to assess the total share of expenditures by income group (2).
- Using Feed Ontario's approach, we can assess the difference in expenditure between the Bottom 20% and the Second Quintile to get the estimated amount of healthcare expenditures that are associated most directly with low income.
- The result is an estimated cost of $17.7 billion that is associated with the lowest income population in Canada.
Table 1: Share of public health expenditures in Canada by income quintile
Calculation of Cost Savings to Criminal Justice System Due to Poverty Reduction
- Research has shown that approximately 4% of crime in Canada can be attributed to poverty and low income (3).
- The [Federal Department of Justice](Zhang, T. (2011). Cost of Crime in Canada, 2008. Department of Justice. Canada.) has estimated the combined costs of crime in Canada to be $99.6 billion annually
- If we apply the 4% rate of crime that is directly linked to low income, we get an estimated cost of crime of $3.9 billion that is associated with low income annually.
(1) This fact is well documented in the Canadian literature on social determinants of health (see Social Determinants of Health: The Canadian Facts and Income and Health: Opportunities to achieve health equity in Ontario).
(2) The share of public health costs by quintile is derived from the report Paying Taxes and Using Health Services: The distributional consequences of tax financed universal health insurance in a Canadian province
(3) See the analysis by Feed Ontario (2016, pp. 13)