May 27, 2010

Health Care: Canada's Looming Brick Wall

There's a warning for Americans from a new study on the sustainability Canada's health care system.  That's the single payer type of system many Democrats want to work towards. The Toronto Dominion Bank (provider of economic advice to a number of Canadian governments, federal and provincial) has produced a report on the sustainability of the system and it's not good.
From the TD report the warning (emphasis added);
TD projects that health spending is likely to grow by 6.5 per cent a year, while government revenues grow only 4 per cent. At that rate, health care would eat 80 per cent of the province’s program budget by 2030, up from 46 per cent today.
And the recommendations include a commission on who gets what treatment covered;
To focus medical practitioners on the most effective treatments, it says the province should set up a “commission on quality and value for health care.” ...Ultimately the commission might — as a similar body does in the U.K. — dictate what treatments can be funded under public health insurance.
It includes some free market input on what doctors get paid - a radical departure for Canada's socialized medicine system;
The TD report also says doctors should be paid differently, getting a blend of salary and payment for the volume of patients and treatments.
It recommends privatizing some delivery options to save costs to the straining system.
...governments could cut drug costs with more bulk purchases, and should experiment with private delivery of some services , although they would still be covered by OHIP.
And of course, it suggests some new taxes.
It also proposes an income-based health tax. One model would track individuals’ health care usage, then bill them for 40 per cent of the cost at income tax time.
Privatization, market forces dictating at least part of doctor's pay, a health care panel (death panel?) and of course some new taxes.  All to save a system that is expected to balloon to 80% of the provincial budget of Ontario in the next 20 years.  The report done for the province of Ontario also mentions similar issues in other provinces. Single payer is not all you were led to believe it was.  

The United States is climbing aboard the universal health care train just in time for the baby boomer old age bubble that could conceivably kill it's viability.  The timing of the U.S. health care initiative could not have been any worse - the time to do this, if you believe in that sort of system, would have been entirely post baby boomer generation.  It's almost as if the administration is trying to drown the U.S. government in unsustainable costs when it can least afford to support such spending.  

Canada's crisis has had a few decades to ferment.  It's a sign of problems for the U.S., which has decided to fast track towards the issue.  A smart nation would heed the warning signs and try to avoid the issues at all (pardon the pun) costs.

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