Tuesday, June 1, 2010

Soaring costs force Canada to reassess health model

Read the whole article.


Pressured by an aging population and the need to rein in budget deficits, Canada's provinces are taking tough measures to curb healthcare costs, a trend that could erode the principles of the popular state-funded system.


...British Columbia is replacing block grants to hospitals with fee-for-procedure payments and Quebec has a new flat health tax and a proposal for payments on each medical visit -- an idea that critics say is an illegal user fee.


And a few provinces are also experimenting with private funding for procedures such as hip, knee and cataract surgery.



"...We can't continually see health spending growing above and beyond the growth rate in the economy because, at some point, it means crowding out of all the other government services.


"At some stage we're going to hit a breaking point."


"...Many of the advances in healthcare and life expectancy are due to the pharmaceutical industry so we should never demonize them," said U of T's Golden. "We need to ensure that they maintain a profitable business but our ability to make it very very profitable is constrained right now."



Scotia Capital's Webb said one cost-saving idea may be to make patients aware of how much it costs each time they visit a healthcare professional. "(The public) will use the services more wisely if they know how much it's costing," she said. 


"If it's absolutely free with no information on the cost and the information of an alternative that would be have been more practical, then how can we expect the public to wisely use the service?" 


My thoughts:  Yes, a freer market would lower costs.  A completely free market would make it really inexpensive.


But change may come slowly. Universal healthcare is central to Canada's national identity, and decisions are made as much on politics as economics. 


"It's an area that Canadians don't want to see touched," said TD's Burleton. "Essentially it boils down the wishes of the population. But I think, from an economist's standpoint, we point to the fact that sometimes Canadians in the short term may not realize the cost."


My thoughts:  No one is going to be willing to give up what they get for "free."  Just witness the recent 1 cent sales tax increase in AZ.  People don't want to give up their cash cow (i.e., pay check from the state) and "free" education.  Socialism just doesn't work.

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