SPIRALLING COSTS?

This is a common refrain I have heard regularly for several decades. The facts are obscured by a flood of numbers which can confuse even the few individuals who are both financially literate and familiar with the complexities of Canadian healthcare economics. An oversimplification which still captures the essence is something like this:

• Canada spends about 12% of GDP on healthcare similar to the UK and France and much less than the 17% true of the USA.

• Canadian spending includes 30% for private services which largely refers to drugs, dentists, and other allied professionals not covered by Medicare or a much higher percent that most OECD countries other than the US.

• Provinces are responsible for the delivery of healthcare and tend to publish headlines such as “healthcare is consuming 50% of the budget” but that is a distortion since in most jurisdictions, provincial government spending is a shrinking portion of the provincial GDP.  Healthcare and education will always be very large parts of provincial budgets because they do not fund many other services. When reported as a percent of provincial GDP, healthcare spending is a much less scary number.

• In every jurisdiction, as the population becomes more affluent, the percent spending on luxuries like bars and restaurants and healthcare rises. No one ever says that spending on bars and restaurants is “spiraling out of control” as those are paid for privately not by the government.

The bottom line is that we need to collectively develop a more mature and nuanced understanding of healthcare economics if we hope to come up with smarter solutions for more effective delivery of the services that we should expect in a modern developed country like Canada.