NCPA - National Center for Policy Analysis


June 2, 2010

American fans of single-payer health care have long held Canada as an example of success in both providing health care and controlling costs.  Canadians have more reason to question both, however, especially the latter.  The provinces, which bear a significant portion of those costs, may end some services and curtail others as ballooning costs have exposed the cradle-to-grave system as unsustainable, says columnist Ed Morrissey. 

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

  • Ontario, Canada's most populous province, kicked off a fierce battle with drug companies and pharmacies when it said earlier this year it would halve generic drug prices and eliminate "incentive fees" to generic drug manufacturers.
  • British Columbia is replacing block grants to hospitals with fee-for-procedure payments.
  • 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. 

It's likely just a start as the provinces, responsible for delivering health care, cope with the demands of a retiring baby boom generation, says Morrissey.  Official figures show that senior citizens will make up 25 percent of the population by 2036. 

How unsustainable is the current system?  Even while creating long wait times and high rationing hurdles for expensive services -- a provincial premier had to go to the US to get heart surgery in time -- costs have risen far above inflation, at 6 percent a year.  Canada's system can't keep up with new technologies and treatments while living within arbitrary allocations made by a political process, and the care for seniors will probably be hardest hit in the coming money crunch, says Morrissey. 

Source: Ed Morrissey, "Canada reconsidering health care model in face of soaring costs,", June 1, 2010; and Claire Sibonney, "Soaring costs force Canada to reassess health model," Reuters, May 31, 2010.  


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