Canadian Healthcare, Universal coverage
How the baby boomers blew it on health care
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Mark Milke, Director of Research, Frontier Centre for Public Policy
If an “award” were ever given to Canadian governments for their most botched-up policy area, nothing could trump the health file. Ever since the 1960s and the arrival of universal coverage (the one signature achievement Ottawa and the provinces can justifiably point to) the various governments have otherwise made a hash of our health.
Some might argue health care isn’t so bad and assert no Canadian goes bankrupt. And the inevitable comparisons will be made with the United States and how that system falls short.
But the clichéd U.S. comparisons ignore the problems within our own system. Our waiting lists may not bankrupt people, but our health care queues prolong the pain of those who suffer. In the very worst outcomes, waiting lists kill patients who don’t receive treatment fast enough.
Then there is our inefficient delivery method. Misnamed “defenders” of Medicare mistakenly presume greed disappears if governments label something as public and give control of the health care system to large, quasi-monopolistic health care unions.
But all that does is institutionalize greed, subject governments to the whims of monopolists, and mess up proper compensation by not paying general physicians enough but unionized pressure groups more. That approach prevents public, private and non-profit hospitals, clinics and staff from competing to deliver excellent service in the most cost-effective manner.
Finally, there are the swings between government-managed health care at the local level (regional health authorities such as in British Columbia) on the one hand, and the assumption that a “super board” will be the answer to all that ails us on the other (Alberta recently moved to this model).
Pathetic as all such policy mistakes have been, they pale when compared to the biggest botch-up: how baby boomers neglected to pre-fund their health care.
A lack of pre-funding matters because the baby boom generation, the largest cohort alive, is hitting retirement age, precisely when more health care is needed. In 1956, only 7.7% of the population was 65 or older. By 2006, that figure almost doubled to 13.7%. Using the medium growth scenario provided by Statistics Canada, by 2011 the over 65 cohort will be 14.4%, by 2016 16.4%, by 2021 18.7%, by 2026 21.2%, and by 2031 23.4%
The pressure on the already costly provincial health-care budgets will be enormous.
Had governments paid attention over the last several decades, they would have initiated something known as medical savings accounts. Think of them as the medical equivalent of RRSPs or even the Canada Pension Plan which, after 1997, began to pay attention to demographic realities. It changed from a pay-as-you-go pension system to a partly pre-funded one. (The CPP is not perfect there either but that’s another matter.)
Singapore initiated medical savings accounts decades ago and they make eminent sense. Each person must save a portion of his or her income to be withdrawn only for medical needs as they arise. While not the only reform needed but, because they are tied to individuals, they help a society adjust to demographic realities. Had politicians in 1956 or even 1986 been far-sighted, such funds would now be available to transition the baby boomers into better health care.
Dr. David Grazter, a Toronto and Manhattan physician originally from Winnipeg, recommended such accounts ten years ago in Code Blue, his award-winning book on Canadian health care. Former federal Tory cabinet minister Don Mazankowski served up a version of the same in his recommendations to the Alberta government earlier this decade.
Canadians are about to endure some painful cuts in health care because there is no other choice: Run deficits for long enough and the extra interest payments cut into what’s available for doctors, nurses and hospital beds.
Medical savings accounts won’t solve all of Medicare’s ills but, in contrast to global health care budgets which are directed to respond to immediate needs as opposed to future needs. But that’s why such accounts are needed, they make sense. Their non-introduction has been the biggest missed opportunity of the past half-century.
You can visit the Frontier Centre for Public Policy at fcpp.org.