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Health Care: Canada Already Spends More Than Sweden

Author: Mark Milke 1999/09/09
A recent Compas poll suggests that 41% of Canadians believe they should have the right to privately purchase their own medical services. Politicians and pundits should watch for that number to grow, despite increased amounts of money spent on health care by governments of all ideological stripes. While the political class, with most of their heads safely buried in the sand on this issue may wish it away, changes to health care insurance and delivery will be demanded by Canadians for several reasons.

Fist, and despite public perception, health care costs as a percentage of government budgets have grown significantly. While some will continue to argue for more health care dollars instead of budget cuts, the truth is that politicians across the country have done the former (more spending,) and not the latter, both in actual dollars and as a percentage of government budgets.

Alberta ended cuts to health care funding three years ago and has plowed money back in ever since. In BC, almost 38 cents out of every dollar spent by the BC government now goes to health care compared to just under 32 cents out of every program buck ten years ago. As the public becomes more aware of how much governments actually spend on health, look for the pressure on politicians to switch from "spend more" to "we want results," and then to "we want more control and choice over how that money is spent."

Secondly, international comparisons will only serve to increase the pressure on politicians to allow for more choice in health care. For example, here are some little-discussed facts on total (public and private) health care spending; As a percentage of its economy, Canada spends more on health care than just about any other industrialized country.

According to 1997 OECD figures, Australia, Austria, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal and Spain all spend less than Canada. Even - gasp - that supposed model of compassion, Sweden, spends 8.6% of its economic output on health care, whereas health care spending in Canada is 9.3% of GDP. Among major industrialized countries, only France (9.9%), Switzerland (10.2%), Germany (10.4%) and the United States (14.0%) outspend Canada.

The third reason Canadians will demand more health care choices is the tendency of politicians to take a fundamentalist approach to health care, i.e. - enshrining the five principles of the Canada Health Act as commands never to be tampered with. Allan Rock may be a smart man, but he's no Moses.

To see the absurdity of how Canada's governments currently control health care, imagine if they controlled retirement in a similar manner: Basic retirement needs - a roof over your head, food and drink, RVs, trips to Florida -all would be paid for out of a public purse. And even if you had the money saved up in your RRSP, purchasing that sleek new Winnebago would be forbidden. "Winnebagos are a basic right of all retirees, and if we have to enforce waiting lists to make sure all Canadians get a Winnebago, that's the price we pay for not being American. No private retirement plans," intones your government M.P.

And while government would allow other retirement pleasures (playing shuffleboard, renting "I Love Lucy" re-runs) to be privately purchased, many politicians would warn of the "creeping privatization" of retirement and propose paying for, and rationing all such retirement activities, through the public purse.

All Canadians should have medical coverage. That much all Canadians can probably agree on. Beyond that, the larger debate is long overdue.

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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