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The Future of Healthcare Part 5: Thinking Outside the Box

Author: Richard Truscott 2001/02/26
More than anything else, securing the future of health care will require "thinking outside the box". Specifically, the introduction of "efficiency incentives" is needed.

There are many innovative proposals to encourage the efficient allocation of public health care resources by giving "consumers" more control over health care spending. All these proposals have some things in common: they promote the efficient spending of public money in a publicly funded health care system through financial incentives to health care consumers: they are not intended to raise money, but to control costs; they empower consumer choice in health care, and rely on the ability of doctors to compete with one another on costs and fees; and they do not inhibit access to the health care system.

Several researchers have looked at ways and means of giving individuals control over their own portion of public health care spending to encourage cost savings. Saskatchewan should test and evaluate these proposals.

For example: David Gratzer, the author of Code Blue, proposes giving everyone a medical savings account for the first few hundred dollars of primary health care needs each year (i.e. doctor visits). If the account runs out in a certain year, you pay for costs "out of pocket" until you reach the deductible on your insurance. But if you don't exhaust your account in any one year, the surplus is carried forward for future medical expenses.

The Consumer Policy Institute (CPI) proposes health care allowances that are replenished yearly by the government. If you spend your allowance you pay out-of-pocket until insurance kicks in. If you don't spend your allowance, half goes back to the government, and the other half you keep for future medical expenses and eventual investment in an RRSP. CPI wants certain preventative health measures to remain completely "free".

James Gilles of York University proposes giving everyone a publicly-funded health care debit card. Once the card runs out the insurance kicks in, but any unused amount on the debit card in any single year is awarded to you as taxable income.

Robert Macintosh, former head of the Canadian Bankers Association says that an individual's health care costs should be added to their tax bill at the end of the year as a "taxable benefit". There would be a ceiling to protect against catastrophic costs and exemptions for the disabled, seniors, dependants, etc.

These are innovative proposals for enlisting health care consumers in the battle to contain health care costs and make health care spending more efficient. Saskatchewan could be a "test bed" for such proposals.

So thick is the mythology surrounding Medicare that honest and open discussion of its future has become the political equivalent of kryptonite. Our inability to discuss its shortcomings, however, will prevent us from making progress towards solutions. How tragic it would be if Medicare died on the table because we lacked the foresight, the flexibility, and the courage to do what is needed to save it.

There is a saying that "Only Nixon could go to China." In the same way Saskatchewan, as the birthplace of Medicare, may be the place where serious reforms must originate. To a country full of politicians who are afraid to even discuss health care, as citizens and taxpayers we must find the foresight, the flexibility, and the courage to show the way.

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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