The Future of Healthcare Part 2: The Demographic Challenge
Author:
Richard Truscott
2001/02/05
One of the most important issues facing the long-term wellbeing of Canada's healthcare system is demographics - pure and simple. Unless we find ways to meet this fundamental challenge head-on, what ails our healthcare system can only get worse.
Over the past decade, healthcare has been in a perpetual state of crisis. The system's seemingly insatiable appetite for dollars appears to have no end.
Since 1980, health care costs in our country have exploded, rising much faster than inflation, population and GDP. Healthcare spending is rising sharply across Canada and now tops $95.1 billion in 2000. Public spending rose 6.7% in 1999 and 7.7% (forecasted) in 2000 for a total of $67.6 billion. Private health spending also grew, but at a slower rate: 4.5% in 1999 and an estimated 5% in 2000 for a total of $27.5 billion.
No doubt, containing costs will be an important challenge for years to come. However, an even more daunting challenge on the horizon for the long-term is the changing demographics in our country and our province.
Canada has a rapidly aging population. In 1966, the ratio of workers to retirees was 8 to 1. It is currently 5 to 1 and in less than two decades, it will be 3 to 1. These statistics will have important ramifications not only for our public pensions, but for our healthcare as well.
Specifically, Saskatchewan suffers from a triple whammy. First, our province has a stagnant population. Saskatchewan's population only grew by 0.3% from 1991 to 1999.
Second, we have a rapidly aging population. Saskatchewan is the province with the highest proportion of its population who are 65 and older, an important fact since providing medical services for our seniors accounts for approximately 50% of all health care expenditures.
And third, Saskatchewan has a Native population growing at a brisk pace of 3% to 4% per year. However, treaty Indians are eligible for several tax exemptions that may grow as a result of current court actions. Yet if the number of Native people in Saskatchewan rises to a third of the population in 25 or 30 years as is predicted and are not paying taxes, it would mean the starvation of funding for important social programs like healthcare (upon which many Native people themselves rely upon).
As a result of these trends, Saskatchewan's tax base may have limited potential to expand to pay for increased healthcare costs.
Change is not a matter of "if", but a matter of "when" - these demographic changes and other trends will force a change to the status quo. Otherwise, the inevitable result will be further rationing, a massive tax increase, more patients being forced to the U.S. for treatment, or a combination of all three.
Simply put, the ability of Canada's governments to finance our health care system is in dire need of reform. Our policy-makers must immediately prescribe remedies now to effectively deal with these important demographic challenges.