Code Blue: Healthcare Debate Needs Crash Cart of New Ideas
Author:
Walter Robinson
1998/09/09
Healthcare is definitely the issue du jour. Over the last week, a plethora of advocacy groups, think tanks, and politicians, have all sounded the alarm about what ills our system and offered their prescriptions for a cure.
Most "experts" advocate more spending as the miracle cure. Yet these calls are as sterile as a hospital operating room. Just as job creation programs never create lasting jobs, more health care spending will not necessarily make us healthier.
Canadians deserve a more reasoned and informed debate than has presently transpired. To begin, let's dispel the most common myths.
Myth #1: Two-tiered medicine must never become a reality.
Fact: It already is! We can not fund every medical procedure, so we ration by lengthening waiting lists and delisting services. Only 70% of healthcare is now publicly funded. Canadians
privately pay for the other 30% of the healthcare they consume.
Myth #2: User fees are unfair because we have no way of properly assessing our health care needs. Therefore, health care should be free.
Fact: A landmark study in the U.S from 1974 to 1982 compared 1,000 families with free healthcare to 1,000 families that paid user fees up to $1,000 per year. The families with unrestricted access visited the doctor more, accessed more medical services and were 30% more likely to be admitted to hospital. Meanwhile, the families that paid small user fees consumed fewer health services. Yet no discernable difference on the health status of
the average adults in either group were recorded.
Myth #3: The publicly administered component of the Canada Health Act must be maintained.
Fact: Around the world governments have fostered the private delivery of services in education, air traffic control, policing, fire-fighting, water and sewage treatment, for the benefit (service and cost reductions) of tax- payers. For-profit healthcare operations can coexist with a public system.
But these myths pale in comparison to the most fundamental problem: equitably funding today's and tomorrows needs. Canada's healthcare policy wonks must look beyond our borders for innovative ideas and solutions. In Singapore, individual medical savings accounts are used as vehicles to finance healthcare expenditures. In the U.K. and New Zealand the promotion of competition through internal markets has proven effective in controlling costs while maintaining and even enhancing quality services.
However, the outlook is bleak if our experience with public pension reform is any indicator. Our governments ignored international experience and chose to try and sustain our pay-as-you-go (PAYGO) pyramid funding scheme with a 73% hike in CPP premiums. Sadly, PAYGO is also the basis of funding our healthcare system.
The feds and the provinces spend over $75 billion annually on hospitals and other institutions, doctors, drugs and equipment. As our population ages and we live longer, the diseases of
ageing like cancer, alzheimers, heart ailments, arthritis, etc. , will eat up more and more money. Yet demographics clearly show that governments will ask a smaller workforce to foot this skyrocketing bill through their taxes.
There's just one problem: even conservative estimates of our questionable ability to finance these expenditures under a PAYGO scheme still point to almost a trillion dollars in unfunded
healthcare liabilities. So beware of the con artists who would have you believe that simply raising budget envelopes by a few billion dollars is the answer. These folks have already flatlined.
It's time for a crashcart of new ideas-