Panaceia or Hygeia

immunize yourself against the pandemic of lifestyle diseases

“Health” spending in Canada hits $172-billion, outpacing inflation

Posted by Colin Rose on November 14, 2008

Drugs now cost more than doctors and the cost is rising faster than inflation. Sooner or later this insanity has to end. Probably sooner. With a likely world-wide depression in the next few years there will be awakening awareness that most of those expensive branded drugs, such as Lipitor and Crestor, are for lifestyle diseases, like Type 2 diabetes, hypertension and atherosclerosis, related to junk food addiction which can be prevented and treated without drugs. But we need to take a $few billion of that $172 billion and put it into addiction research. Addictions of many kinds are at the root of most of the problems of developed capitalist democracies.

Note that Japan which spends per capita on its “health care” system only 38% of the USA and 70% of Canada has a longer life expectancy than either. Ergo, there is no relation between money spent on hospitals, drugs and doctors and life expectancy; if any, there is an inverse correlation. While everyone uses the term “health care” for the activities and effects of hospitals, drugs and doctors, these are really disease care. Some diseases can be cured but most can’t and in a high tech, fee-for-service medical system with an incentive only to do more, more people will be killed by the technology than saved by it.

Jeffrey Simpson in the Globe and Mail suggests as a solution to exponentially increasing costs more private “health” care. That will only increase the total cost as people with just spend more to support their addictions. Doctors in a fee-for-service regime will be only to happy to oblige. The only long-term solution I can see is to put all doctors on a salary. In such a system the driving incentive is to keep people healthy so doctors have less work to do. Paying doctors per disease is like paying firemen per fire. Would there be more or less fires? Would there be any incentive for fire departments to promote fire prevention? In a regime of totally salaried doctors costs would drop dramatically and the health of the population would markedly improve.


Health spending hits $172-billion, outpacing inflation
BY BRADLEY BOUZANE Canwest News Service
National Post
14 Nov 2008

OTTAWA  Health care in Canada will cost $172-billion this year, or nearly $5,200 for every person in the country, according to figures released yesterday by the Canadian Institute for Health Information. The independent statistical agency says that…read more…

cihi-canada-world-healthcare-cost
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From the Globe and Mail, November 19, 2009

Listening to the sounds of health-care silence

JEFFREY SIMPSON

Where did health care go? Pollsters keep reporting that health care is the No. 1 issue for Canadians. We spend way more on it than on anything else. Yet, no one – well, almost no one – talks about it any more, at least not politically.
Sure, citizens recount their experiences with the system to each other. People who work in the system talk about it incessantly, health care being their world.
But as a public policy/political issue, health care has died. Died, despite the Canadian Institute for Health Information’s reporting last week that Canada will spend $172-billion this year on health, about 70 per cent from public sources. That works out to $5,170 per capita.
Health care gobbles up provincial (and federal) resources. It consumes 39 per cent of all provincial program expenditures – that is, spending on everything but  servicing the debt. In some provinces, health care’s share of program expenditures is 45 per cent. Soon, it will be 50 per cent and higher in all of them.
Health care consumed 7 per cent of the nation’s economic output in the mid-1970s, shortly after it was up and running. Now, it consumes 10.7 per cent. That share will keep on rising as the population ages, technology becomes more expensive, and demand grows.
No one knows how to stop the increase; in fact, large increases are hardwired into government spending plans. These increases are not improving the system, but they are keeping it from getting discernibly worse.
The Paul Martin government signed a deal with the provinces for a $41-billion transfer from Ottawa over 10 years starting in 2004-2005, with the transfer indexed yearly to 6 per cent. The Harper Conservatives, then in opposition, signed on to that deal and have never wavered.
Without that federal cash, provincial health-care plans would be struggling or imploding – or provinces would be forced to raise taxes or cut other services. As it is, their annual costs are rising by 4 per cent to 5 per cent after inflation. The federal cash keeps their systems afloat.
That’s one reason why silence surrounds the health-care debate. Caterwauling provinces can hardly complain about parsimonious Ottawa when such mighty rivers of federal cash are flowing their way. Similarly, almost complete silence reigns within federal politics, except for occasional election promises to spend  yet more money for provinces to hire more doctors. But with Ottawa already sending so much money to provincial capitals, these chirpings ring hollow.
It was cheap theatre for provinces to beat up on Ottawa when the federal government seemed to be rolling in dough. But after the Harper government spent the surplus it inherited by shovelling money to the provinces for the ‘fiscal imbalance,’ cut federal revenues through reductions to the GST and let spending proceed above the inflation rate, the surplus almost disappeared.
Now, with the economic tsunami upon us, the small surplus will head into deficit. Even if provinces clamoured for more health-care money, there wouldn’t be any.
The deeper reason for the silence is that no provincial government knows what to do about the system, except to keep it going, fiddle at the edges, try to improve administration here and there, negotiate the best collective bargaining agreements they can.
Nowhere in Canadian public affairs is the gap so wide between what those responsible for policy say and what they do. Privately, almost all of those responsible know that the spending increases are unsustainable and that some means must be found to allow more public services to be delivered privately.
Publicly, none of them dare say so.
Without that debate – and fear of public reaction keeps it closed – politicians spin their wheels, spend lots of money, patch the system, add something new here and there, and carry on.
The only idea for lowering the increase in health-care costs comes from those who claim, rightly, that the fastest-rising part of health-care budgets is the drug bill. Their answer: a national pharmaceutical plan integrated into medicare.
It might be recalled that, in 1997, Quebec introduced such a drug plan. It cost the treasury about $700-million that year. This year, the public cost will be $2.3-billion, a threefold increase in about a decade.

One Response to ““Health” spending in Canada hits $172-billion, outpacing inflation”

  1. […] chart was adapted from a Canadian site calling for health care reform in Canada. The Canadian system has its problems, but I suspect […]

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