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Health Economics


The University of Calgary Health Economics Group trains graduate students in Health Economics in the Department of Community Health Sciences, and the Faculty of Economics. Training occurs at the Masters, PhD and Postdoctoral levels. A list of courses, graduate student competencies and requirements for the Department of Community Health Sciences Health Economics Training Program are below.

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Research Reports

Faculty have conducted a braod range of research studies, including reports done in conjunction with Government, or other Health Care Decision-Makers. Several are highlighted below.

Assessing the Impact of Drug Insurance on Clinical and Economic Outcomes in Patients with Chronic Diseases

Appropriate access to pharmaceuticals, along with adherence to pharmacologic regimens, is important in the management of patients with a variety of medical conditions. Although Canadians have universal access to medically necessary care, which includes hospital and physician care, not all Canadians have coverage for medications. This results in direct payments by patients for drugs, which can occur among both those with or without drug insurance that place a financial burden on both patients and their families.

An Overview of Patient Impacts

In Canada, prescription medications are generally financed through a combination of public funding (provincial/territorial and federal government) and non-government sources (third party private insurance or out-of-pocket). Publicly funded coverage varies across Canada. In this report, we compare publicly funded drug programs across Canada and determine where Alberta fits in comparison to the other provinces/territories with respect to its current publicly funded drug plans, drug access, expenditures, and patient-borne out-of-pocket costs.


All provinces offer publicly funded drug insurance plans with no premiums to those on social assistance. For seniors and the general population, all provinces offer plans although several include premiums (Quebec and Nova Scotia for seniors and Alberta, Quebec and New Brunswick for the general population under age 65). For seniors, there are a variety of cost-sharing mechanisms employed across the provinces including fixed co-payments, co-insurance, deductibles, and maximum out of pocket limits. The plans for the general population under age 65 vary greatly across the provinces. Many use deductibles, generally a percentage of annual net income (range: 0-20%), and income-based maximum out of pocket limits. Two unique differences are worth noting. First, Quebec has mandated that all persons have drug insurance (either public or private), forcing complete population coverage. Second, both Manitoba and British Columbia intend there to be no differential plan for seniors; the plan will become entirely income based. Manitoba has already adopted a solely income-based plan, whereas British Columbia has frozen the year of birth of seniors to 1939, intending to move exclusively to an income-based plan as the population ages. Generic payment rules and least cost alternative policies have been adopted by nearly all the provinces and territories. Reference pricing is used as a cost saving measure by British Columbia and New Brunswick. The use of government first payer policies (as used in Alberta) varies across the country; approximately half of the provinces and territories have a government-first payer policy. Compared to the other provinces, Alberta spends a comparable percentage of their total provincial health expenditure on prescription drugs but the Alberta government covers a higher 2 share of total prescription drug expenditures (43.6% vs 36.5% for Canada overall). It is projected that for 2015, Alberta will spend 6.5% ($1334M) of its total provincial health expenditure on prescription drugs, compared to $387 M in 2000. While the percent of total provincial health expenditure on prescription drugs has remained relatively constant over time, the absolute expenditure on drugs has quadrupled. Of all the provinces and territories, Alberta has seen the largest growth in absolute expenditures since 2000, only in part due to population growth. Total prescription drug expenditure per capita is comparable to the other prairie provinces but much lower than Ontario, Quebec and Maritime provinces. However, Alberta has the second highest per capita provincial government prescription drug expenditure ($318) of all the provinces (second only to Ontario). Alternatively, BC has the lowest total drug expenditures and public expenditures on drugs per capita. Out of pocket costs vary widely across the country. In general, Alberta has modest out of pocket costs comparable with the other provinces, though this varies for individuals under age 65 (where costs borne by Albertans are similar or higher), and seniors (where out of pocket costs are similar for lower income Albertan seniors or lower for higher income Albertan seniors). For people with chronic diseases like diabetes, high blood pressure and heart disease, who are high users of prescription medications, Albertans were less likely to have publicly funded drug insurance, possibly because of the requirement to pay a premium to access drug insurance for those under age 65, and more likely to have private insurance than individuals from the other western provinces. Albertan seniors with chronic diseases faced lower out-of-pocket costs ($513) compared with British Columbia ($689), despite a similar likelihood of having private insurance across this age group. Statin use, a marker of appropriate drug use in these individuals with chronic diseases at high cardiovascular risk, was similar between Alberta, where 55% used statins, and BC, where 50% used statins. There was a trend towards more people stopping their preventive medications in BC (12.4%) compared with Alberta (7.5%).

  1. Objectives:

    We provide an overview of populations covered and publicly funded drug plan rules and regulations across Canadian provinces. We describe total drug expenditures across Canada, including the proportion of expenditures that are government-funded vs private. Finally, we describe markers reflecting the quality and comprehensiveness of coverage of Canada’s publicly funded formularies (with a focus on the western provinces) in the following areas: equity, access, patient-borne costs, and appropriate medication use.

  2. Methods:

    We used a variety of data sources, including data from the Canadian Institute for Health Information (to compare drug expenditures), information from publicly available government websites (comparison of drug plans, and patient-borne costs), and the results of a recent survey of 1849 Western Canadians with chronic disease that explored issues around financial barriers, and appropriate drug access.

  3. Key messages:

    All Albertans have access to drug insurance albeit those under 65 and not on social assistance must pay a premium, whereas most other provinces have premium-free coverage for the entire population and employ other cost-sharing tools (deductibles, co-insurance). Seniors in Alberta (particularly those with average or higher income) have significantly lower out of pocket costs for medications in comparison to similar provinces, including BC. Alberta has the second highest per capita public expenditure on drugs, and the Alberta government covers the largest share, relative to all other provinces/territories of total prescription drug expenditure per capita. Since total per capita drug expenditures in Alberta appear similar to other provinces we speculate that public per capita drug expenditures are higher in Alberta compared with other provinces because of differences in three key policy areas: government as the first payer, the use of income tested cost-sharing in other provinces, and differences in copayment structures. The impact of any changes within these policies on plan effectiveness, costs, and equity requires further consideration.

Executive Summary:

Rare diseases have been an increasing area of focus as three waves have converged in recent years: the continuing innovation stemming from the genomic revolution, the regulatory financial incentives put in place by the US government for rare-disease therapies, and the increasingly mobilized, coordinated and sophisticated patient community. However, the very nature of rare diseases calls for scientific and societal collaboration on an unprecedented scale. Federated data systems are one such example of this scale. A federated data system is a type of meta-database made up of constituent databases that are transparently interconnected, but not merged – an important point for security and privacy concerns. The result is a robust and well-annotated dataset that in the case of rare diseases can be contributed to and queried by different countries to enable global and country-specific solutions to diagnosis, treatment, patient trial recruitment, and management. The development and maintenance of federated
data systems is one of the many investments countries could make in the name of scientific collaboration – but is it the right one? This paper reviews the “known knowns and known unknowns” of a federated data system solution to the unmet needs of people living with rare diseases. Ultimately, investment will be required to confirm and test the value propositions put forth in this paper. Our aim is to enumerate these value propositions along the lines of diagnostic benefit, clinical benefit, clinical trial benefit and personal benefit to individuals living with a rare disease. This will help collaborating nations to understand whether federated data systems are a best-fit solution to the global challenges inherent in rare-disease diagnosis and treatment plans.

Executive Summary

Health disparities between urban and rural-dwelling Canadians are well documented, and highlight the importance of recruiting and retaining physicians to rural areas. In this study, our objectives were to identify factors important in the recruitment/retention of rural physicians, and to understand the role payment models may play in supporting these efforts.

Existing literature has identified factors that influence recruitment and retention across four main themes: personal (e.g., rural background), community (e.g., social and recreational activities), education (e.g., rural placement during training), and policy (e.g., payment models, incentives). Within the literature, there were three overarching conclusions: 1) studies consistently note that payment models are not the most important contributing factor, but rather are considered amongst other non-monetary factors; 2) a combination of monetary and non-monetary incentives are most strongly associated with rural recruitment/retention; and, 3) there is consistency in the most important trade-offs physicians are willing to make in order to work in rural settings (e.g., income, locum relief, and desirable on-call arrangements). Noticeably missing from this literature is attention to Indigenous rural and remote communities, and how preference for payment models might differ by physician demographics (e.g., physician sex, country of medical training, age).

To further understand the role of payment models in retention and recruitment in Alberta, we conducted interviews with 13 Alberta rural physicians. Findings highlighted the importance of professional factors (e.g., variation and scope of practice, attractiveness of rural living). Physicians emphasized the challenges associated with rural practice, which may impact retention (e.g., poor locum support and heavy on-call burden; challenges of a complex patient panel). Our findings indicate that payment models play a limited role on their own in addressing these challenges, but that they might attract additional physicians to rural areas. This could reduce workload and on-call burden, and facilitate a collaborative “team-based” care model, optimizing where and how physicians spend their time. Physicians stressed that distrust in government might impede their considerations for alternate payment models, but that this could be mitigated involving physicians in the development of contracts.

Based on the findings of our work, we present five key considerations:

  1. Focus attention on non-financial barriers through professional support to reduce on-call hours, and improve locum coverage and community integration;
  2. Include rural physicians in the development and implementation of alternate payment models to ensure they are perceived to be flexible, fair, and tailored to the specific needs of the community;
  3. Avoid perverse incentives of all payment models by ensuring accountability mechanisms are in place for all physician payment models;
  4. Advertising alternate payment options by highlighting transparency and trust, flexibility based on community needs, income security, and team-based care;
  5. Target physicians most likely to remain in rural settings (e.g., those with rural backgrounds), rather than incentivizing recruitment for physicians unlikely to remain long-term (e.g., internationally trained physicians).

Executive Summary
Physicians play a crucial role in the health care system. With accountability to both patients and health care payer (e.g., taxpayer), physicians may feel tension when asked to balance the needs of the individual with their role as stewards of health care resources. With the pressure to provide optimal care, and finite resources, it is vital that physicians are empowered, enabled, and engaged to act as stewards of health care resources. Through a partnership between the Physicians as Stewards Working Group and the HTA Unit at the University of Calgary, and funding provided by the SPOR Evidence Alliance and Alberta’s Strategic Clinical NetworksTM, a proposal was developed with the aims to: i) identify what approaches exist for enabling and supporting physicians to be stewards of health care resources; ii) determine the impact of each approach; and, iii) identify which is most likely to support physicians to use high value appropriate care within the Alberta context.  

An initial search of the literature identified ten overarching strategies that could be categorized into four different levels of implementation: patient-level (e.g., shared decision making), clinician-level (e.g., education, mentorship, audit and feedback), organization-level (e.g., leadership endorsement, decision support tools and electronic prompts), and system-level (e.g., Encourage/enforce use of evidence-based data, regulations, compensation reform, restrict access based on patient criteria). Further investigation documented several implementation tactics within each strategy resulting in 18 tactics in total. In an initial exploratory phase of this work, to understand their potential effectiveness, we searched for systematic reviews of each of the 18 identified tactics. Of these 18, five tactics did not have a systematic review identified, four had inconclusive evidence, and nine tactics had systematic reviews which suggested effectiveness of the tactic including education, audit and feedback, electronic prompts, care pathways, and compensation reform.

Alberta has some unique assets within its health ecosystem that make some of the above-noted strategies more feasible than others. The goal of this report is to seek input from health system leaders about which strategies might be deemed feasible for further evidence synthesis, or may be considered for use as we enter a time of change within AHS and the broader health system to support government and AHS priorities.  By narrowing the list of tactics that might be considered for large-scale use in Alberta, a more comprehensive assessment and analysis could be completed to inform implementation in Alberta.