Public health insurance in Canada financially unsustainable

October 25, 2006

Free Market Foundation

Provincial government spending on health care will consume more than half of Canada’s total revenue from all sources by the year 2020 and all revenue by 2050 in six out of 10 provinces if current trends continue, according to a study by the Fraser Institute.

According to this year’s report:

Manitoba and Saskatchewan are the most urgent cases with public spending on health care projected to consume half of all revenues as early as 2016.

Those provinces are nearly matched by Alberta, projected to reach 50 per cent of all revenues by 2017, a fall from the projected date of 2035 in last year’s report.

British Columbia and Prince Edward Island are next, both having 50 per cent warning dates falling in 2019.

Ontario will reach the 50 per cent level of total revenues in 2020, nine years later than calculated in the 2005 study.

Public health expenditures are projected to reach 50 per cent of total revenues by 2024 in Nova Scotia, by 2029 in New Brunswick, and by 2030 in Newfoundland.

The authors suggest the governments could slow the growth in public health expenditures while increasing the availability and accessibility of medical care if they introduce policies being used in other countries:

Require patients to make co-payments for publicly insured health services.

Acknowledge the individual right of patients to pay privately (via private insurance or out of pocket) for all types of medical services, including hospitals and physician services.

Allow providers to charge extra fees directly to patients above the public health insurance reimbursement level and receive reimbursement for their services from any insurer, whether public or private.

Permit both for-profit and non-profit health providers to compete for the delivery of publicly insured health services.

Source: Public Health Insurance in Canada Financially Unsustainable According to Annual Study, Fraser Institute, October 2, 2006; based upon: Brett J. Skinner and Mark Rovere, Paying More, Getting Less 2006: Measuring the Sustainability of Public Health Insurance in Canada, Fraser Institute, September 2006.

For text: http://www.fraserinstitute.ca/shared/readmore.asp?sNav=nr&id=746

For study text: http://www.fraserinstitute.ca/admin/books/files/PayingMoreGettingLess2006.pdf

For more on Health Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=16

FMF Policy Bulletin/ 17 October 2006