Failing The Sustainability Test

I really don’t think there is a provincial government that has been in power over the past fifteen years that thinks our Medicare system in Canada is sustainable in its present form. Further, I don’t believe there has been a federal political party during this time that believes provinces can continue to comply with the Canada Health Act. This, to my mind, is clearly evidenced by the fact that the federal government stopped designating transfer payments to the provinces specifically as health, education, or social assistance, years ago. Instead transfer payments are made without specific designation, thus putting the dilemma of uncontrollable health care costs and the competing interests of education and social services in the hands of provincial governments.
All provincial governments over the past many years have experienced a greater proportion of their disposable income going to health care. This in spite of the fact that waiting lists (risk lists) are getting longer and most provinces in Canada over the past few years are experiencing good economic times. Innovations to date have been disappointing and for the most part have been mimicking Walmart or re-inventing community clinics at twice the cost; e.g. the 8th and 8th clinic in Calgary. Not only is the cost of medical care within the Medicare system increasing faster than inflation and population growth, but the cost to Canadians of health care outside the system is out-pacing inflation. The Jan17/06 edition Medical Post shows that Albertans lead the way with out of pocket costs of $2,150.oo per person for deemed health care costs not covered by the government insurance program in the 2004 calendar year. The average per Canadian was $1,690.oo, a 6% increase of 2004 over2003.
This clearly indicates the cost for health care in Canada is outpacing inflation for governments and outpacing inflation for the average Canadian. Some people will claim that much of the money spent by people and governments on “health care” pertain to “wants” and not “needs”. I certainly support that position. It would appear that Albertans and the Alberta Government have more disposable income per capita and spend more money per capita than other Canadians and provinces so there seems to be a situation where: a) if you have more money you spend more money, and, b) some variance between provinces and the people of provinces as to what comprises a need for health care spending, exists. The logical conclusion to me is that if the government wishes to control its portion of health spending several thing will need to be done: 1) they must define and update from time to time, exactly what it is they will cover in the government program, and, 2) they must tie this in to some relevant way to the amount of money available e.g. a percentage of GDP. If they do this it would seem apparent to me that the cost to each individual Canadian out of pocket expense will increase. The problem then becomes one of; how do we open the door to those people who can insure and personally pay for this added expense and still protect those that cannot?
I think that it is safe to assume that costs in health care will continue to outpace inflation for the following reasons:
1) The first wave of baby boomers are within ten years of retirement and Canada has the largest ratio of baby boomers to the rest of the population of all countries. Not only does this mean greater health care costs as they age (you are 40 times more likely to be hospitalized at age 80 than age 40) but the tax base to support health care will be severely eroded.
2) Pharmaceuticals have taken over as the second largest consumer of health care dollars (first place is hospital care) and are rising quite independent to inflation. New medications to treat and sustain the life of the chronically ill prolongs the period of treatment and cost. Shortening patent times will only drive up the price of new drugs on the market since research companies will have a shorter time to recapture cost and profit.
3) New technologies are expensive but lend themselves to both discovering and treating disease. Treating disease is not synonymous with curing disease. Therefore, in spite of the cost of new technologies, the overall impact is probably not going to be cost effective.
4) The human condition is that we will always seek and move to comfort. Where is the dividing line between suffering (should be treated) and comfort (unobtainable and unsustainable)?
5) There are no market forces within our system to curtail consumption and reward being a thrifty consumer. Both the Ford motor Co. and General Motors are faced with bankruptcy or competing to become more environmentally friendly at a lower cost. This is occurring because of market forces and competition. This does not exist in our present health care monopoly.
6) Physicians and other health care providers, by the nature of the work they do (help provide longer and better quality of life) may be at odds with cost containment.
7) Preventative “solutions” have not been well studied from a cost perspective. Although they are always put forward as a solution, there are studies, for example, that suggest smokers contribute millions of dollars to our Canadian Health Care System rather than cost the system money.
Now that we have elucidated the problems pertaining to sustainability, we will try to think “outside of the box” tomorrow for possible solutions!