In any discussion about healthcare in Canada, there are some basic assumptions, health policy analyst Michael Rachlis told a group of members of the International Foundation of Employee Benefit Plans at the legal and legislative update held in Ottawa on May 12 to May 13.
Those assumptions? Healthcare costs are wildly out-of-control; baby boomers will massively increase costs over the next 30 years, the only alternatives are cutting services going private or doing both; we need an “adult conversation” about which public services to cut.
Rachlis listed the oft-stated positions, and then turned them on their head in his hour-long presentation.
“We’re hearing that we can’t afford to educate our children anymore because we’ve got to pay for granny’s drugs, and we can’t fix the roads because the doctors will leave the province if we don’t pay them enough but what’s the issue in terms of provincial cost pressures?” Rachlis asked.
“The first thing to say is that provincial healthcare costs are not increasing as a share of provincial program spending,” Rachlis said. “It’s been flat for six years and will likely stay flat for the next few years.”
The reason the costs went up in 1998 to 2003, he said, has almost nothing to do with healthcare costs and more to do with the cuts to other provincial programs. Indeed healthcare costs have maintained their share of the overall economy but the reason they jumped from 33% to 39% of provincial expenditures is because the overall budgets shrunk.
“It’s a bit like if an epidemic swept through a community and killed one of the kids in the family and then Dad looks across the table at the remaining kid and says ‘Sonny, we can no longer afford you, you are unsustainable. You used to eat one quarter of the food in this house but now you’re eating a third of it.’ Of course, the kid is eating the same amount, it’s just that his brother died and there’s now only three people in the family.”
Rachlis said Canadian healthcare expenditures (as a percent of GDP) are dramatically low compared to the U.S. and are in line with countries such as Sweden and France.
“It’s not apparent that we are really out-of-whack,” he said. “It is true that the American healthcare costs are completely out-of-control and they have no way to get a handle on them, and we hear all of that rhetoric washing north of the border.”
In addition, he said, baby boomers will not “break the bank.” The aging of the population has only increased expenditures by less than 1% per year over the past 10 years and will increase costs by only about 1% a year for the next 25, he said.
“Aging is like a glacier—not a tsunami,” Rachlis said. “We’ve got years still to prepare for a better system of care for the elderly.”
In summary, he said that while Canada’s healthcare costs should concern us, they are not out of control and added that there are affordable, non-profit solutions to all of Medicare’s “apparently intractable problems.” He encouraged those at his talk to become advocates and players in the healthcare policy debate.
“If we’re going to actually spread innovations across Canada, we need other players involved,” he said and added “we desperately need you folks involved in trying to break a policy log jam” where policy is being discussed behind closed doors.
Jennifer Campbell is an Ottawa-based freelancer.