A demographic disaster in the making

By Klaus Rohrich —— Bio and Archives October 4, 2007

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It appears the Government of Canada has finally discovered the fact that the population is aging, something those of us in the private sector have known for well over 20 years. What few seem to have considered is the impact that an aging population will have on the nation's economy.

Consider that in 1927 when the idea of social insurance and old age pensions were first introduced, the labor force was fairly young with some 30 workers supporting each retiree. Today that figure is down to five workers per retiree and is estimated to drop to 2 workers per retiree by the year 2026. While the above figures are daunting, they aren't the demographic disaster awaiting us. The real demographic disaster in the making is in the healthcare sector. Most people living in Canada today are aware that the Canadian healthcare system isn't necessarily running on all eight cylinders, as average wait times across a broad spectrum of medical specialties are in excess of 18 weeks, with some specialties, such as orthopedic and eye surgery having substantially longer wait times. Consider what will happen to wait times as demand for medical services by an aging population increases exponentially. According to the Fraser Institute, a Canadian economic think tank, per capita spending on healthcare in 2004 was $2,630. However, per capita healthcare spending during the same period for those aged 65-69 was over $5,000 and for those age 80-84 it was close to $12,000. There is little doubt that as Canada's population ages, healthcare spending will by necessity rise. Problem is that the issue of money for healthcare isn't the only issue Canadians are facing today. An alarmingly high number of family physicians that are aging along with the population are expected to retire around the same time that the age wave crests in Canada, which will make the availability of healthcare even scarcer. While Canada is ranked second in the world in age adjusted healthcare expenditures among developed nations that provide universal healthcare, the country ranks near the bottom when it comes to its citizens having access to physicians and medical technology. Canada's medical schools are falling short of the mark in producing qualified physicians that go into general practice. Apparently a majority of medical graduates go on to specialization, so the pool of family physicians is shrinking. While currently we have a stringent policy of not recognizing medical degrees from other countries until foreign physicians can earn recognition in Canada, it is a distinct possibility that Canada, like Britain and other European nations, will have to accept doctors from Third-World countries such as Pakistan and Iraq. What's needed is some forward thinking and emulation of other countries that have dealt with the same problems. Both Japan and Germany have the oldest population among developed nations that provide universal healthcare. Both countries have an outstanding record in providing healthcare without waiting lists and attaining positive outcomes. The one difference in both Germany and Japan is that both nations deliver universal healthcare through a blend of public and private healthcare providers, which creates competition and subsequently reduces costs. Both Japan and Germany also have user fees for the provision of medical services, which discourages frivolous use of their respective healthcare systems. One additional benefit is that there is virtually no wait time for medical care in either country. If Canada is to avoid this demographic disaster in the making, its elected representatives will need to develop healthcare strategies that are radically new. As older people are now living substantially longer they will place an incredible burden on the current system. As such healthcare in Canada is in dire need of an overhaul to include novelties such as user fees, for profit healthcare providers and non-government health insurance. In addition medical schools will once again have to turn out large numbers of qualified general practitioners. Anything short of that will likely be disastrous.