Canada reconsidering health-care model in face of soaring costs

posted at 10:55 am on June 1, 2010 by Ed Morrissey

American fans of single-payer health care have long held Canada as an example of success in both providing health care and controlling costs.  Canadians have more reason to question both, however, especially the latter.  The provinces, which bear a significant portion of those costs, may end some services and curtail others as ballooning costs have exposed the cradle-to-grave system as unsustainable:

Pressured by an aging population and the need to rein in budget deficits, Canada’s provinces are taking tough measures to curb healthcare costs, a trend that could erode the principles of the popular state-funded system.

Ontario, Canada’s most populous province, kicked off a fierce battle with drug companies and pharmacies when it said earlier this year it would halve generic drug prices and eliminate “incentive fees” to generic drug manufacturers.

British Columbia is replacing block grants to hospitals with fee-for-procedure payments and Quebec has a new flat health tax and a proposal for payments on each medical visit — an idea that critics say is an illegal user fee.

And a few provinces are also experimenting with private funding for procedures such as hip, knee and cataract surgery.

It’s likely just a start as the provinces, responsible for delivering healthcare, cope with the demands of a retiring baby-boom generation. Official figures show that senior citizens will make up 25 percent of the population by 2036.

How unsustainable is the current system?  Even while creating long wait times and high rationing hurdles for expensive services — a provincial premier had to go to the US to get heart surgery in time — costs have risen far above inflation, at 6% a year.  Canada’s system can’t keep up with new technologies and treatments while living within arbitrary allocations made by a political process, and the care for seniors will probably be hardest hit in the coming money crunch.

The solution?  Privatization.  Note well that the services offered for privatization are mainly needed by seniors.  That will mean that those Canadians who relied on government promises for cradle-to-grave health care will have to now find a way to pay for those surgeries out of their own pocket after decades of having Canada tax them for health care coverage.  However, Canada doesn’t really have a choice but to find ways to offload the most expensive care if it intends to salvage anything of its state-run coverage for the majority of its citizens.

That does prompt a question, though, on whether a little privatization is possible — a question that the US is considering in the opposite direction.  If Canada will no longer cover some of these necessary procedures, it will have to allow for insurers to sell policies to cover the costs, and those policies will get sold to younger consumers in anticipation of retirement-age issues.  If Canada allows that, why wouldn’t Canadians want to get insured for other issues as well?  And if the electorate gets health-care coverage in a more rational and accessible manner than they do now, why would they tolerate government control in the future?

It’s not just the economic model that is unsustainable.  It’s the political model as well.

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