The Health Care Time Bomb
Apr 21, 2010
An article in a recent issue of Maclean’s magazine has highlighted yet again some of the crucial issues facing the health care system in Canada.
Canada’s rapidly aging population is creating a host of problems for our system. In Quebec, a new health tax and even user fees were proposed in the March 30 provincial budget. The province, like most others, faces relentless growth in hospital, drug and doctors’ bills.
It is estimated that health spending will account for 45 percent of Quebec’s budget this year, up from 31 percent in 1980. Even scarier is that it is projected to consume 67 percent by 2030 if present conditions continue. Manitoba’s health budget continues to rise as well, if not as dramatically.
So Quebec has taken these unprecedented and drastic steps and is also studying the idea of a “health deductible,” where patients would pay about $25 per medical visit. That this would be a challenge to the fundamental tenets of Medicare goes without saying.
Most of the problems challenging the future of Canadian health care as we know it are attributable to the impact of our aging population. Medical advances are helping people live longer. However, baby boomers are now getting into retirement age, and this is creating additional hardships. Even before this demographic shift really begins to have an impact, health costs in Canada have risen more than seven per cent a year on average for the past decade.
Spending tends to be skewed towards the old. In 2007, total health spending on those under 64 years of age averaged almost $2000 per person. Between 65 and 69, the average was more than $5500. For those over 80, that number rises to more than $17,000.
But it seems that drugs are emerging as the toughest component to control in terms of costs. From 1975, drug costs in Canada have almost doubled in terms of the percentage of health spending that they consume (16.4 percent).
As with Quebec, other provinces are trying to find ways to reign in health spending costs. Most recently, Ontario has slashed the amount it’s willing to pay for generic drugs, enraging pharmacies that have deals with generic manufacturers. But this goes to show the lengths provinces are now willing to go to address costs that are spiraling out of control.
It’s a delicate balance for governments that are keenly aware of the importance of Medicare and all it means to Canadians, yet face increasingly challenging budgetary constraints. It’s likely that we will only see more of the innovation (whether good or bad) that is now coming out of places like Quebec and Ontario.
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Those numbers (67 percent of budgets for health care by 2030) should serve as a huge signal to governments across the country that they need to address this issue head on. Same goes for our pension crisis. With an aging population we should be paying for this now because who's going to pay for it in 20 - 30 years? Not the baby boomers. For years governments haven't thought long term and started paying and saving for these programs that baby boomers are going to be pushing to the brink in the coming decades. What will be left for Gen Xers and Ys? And we can't simply blame government because if any government introduced new taxes to pay for problems in the future, we as Canadians would surely cast them aside in the next election.
Jeff - 2010-04-21 13:33