More cash won’t solve health-care problems

Worth A Look, Healthcare & Welfare, Frontier Centre

Canada has a comparatively young population for an industrialized nation.

Indeed, among the 26 OECD countries with universal-access health care (the United States is not included), Canada has the seventh lowest percentage of seniors. Just 12.5 per cent of Canadians are over 65. And while that share is up one-third since 1981, it is still well below the nearly 18 per cent of Italians over 65, the 17 per cent or so of Germans, Japanese, Spaniards and Swedes over 65, and the 15 per cent of Finns, Danes, Norwegians, Brits and French.

Nonetheless, Canada is the fourth-highest spender on health care among OECD nations.

This is surprising and counterintuitive. Seniors are the principal consumers of health care. In most developed nations, 40 to 50 per cent of total health outlays are expended in treating citizens over retirement age.

This is not a dig against older people. Rather, it is merely a fact of life that as our bodies age they require more medical attention.

Still, fewer seniors in the population should mean lower government health-care spending. In Canada it doesn’t, though. Our state monopoly health system consumes 9.2 per cent of our GDP each year, well over the OECD average of 8.1 per cent. Only Germany, Switzerland and France spend a greater percentage of their GDP annually on government hospitals and medical treatment and all three of those countries have nearly a third more seniors than we do.

Remember, again, the U.S. is not included in these numbers because the OECD does not consider its Medicare/Medicaid schemes to be universal access systems.

Of the six OECD members with populations younger than Canada’s, only Iceland at 8.6 per cent of GDP even comes close to Canada’s level of health spending. Australia and New Zealand hover around eight per cent, while Ireland, Poland and Slovakia struggle to crack six per cent.

And here’s the kicker: In a report to be released Monday by Vancouver’s Fraser Institute, Canada is shown to be the industrialized world’s biggest spender on health care, when spending is adjusted for the age of each nation’s population.

If there are shortcomings in our health care system, they are not the result of government stinginess. More money will not solve our problems, since we are already throwing as much money as any country at the problems.

The permutations and calculations through which economists must go to adjust health spending for the relative age of each country’s citizenry is, quite frankly, a bit artificial.

They begin with the assumption that as the percentage of seniors grows in a population, a country’s health spending will remain reasonably constant per senior. If, for instance, the percentage of Canadians over 65 suddenly shot up to the level of Sweden’s or Italy’s, given what we already spend treating seniors, our health budgets would balloon to 11.7 per cent of GDP, a nearly 30-per-cent increase from current levels.

This is not an entirely ridiculous projection. As the Fraser Institute points out in its study How Good is Canadian Health Care? we know from federal government data that between 1981 and 2001 the number of Canadians aged 65 or older increased 33 per cent. Meanwhile, during those same two decades, health spending on seniors rose an astonishing 93.7 per cent. Spending on seniors’ health outpaced the growth in their numbers by almost three to one.

This was as much or more the result of inflation, improvements in medical technology and medications and increased longevity as it was the growth in the number of seniors. Still, it does prove the general thrust of the Institute’s calculations — if Canada had more seniors, we would likely be the top health-care spenders among countries with socialized medicine. As it is, we are amongst the very top spenders despite our young population.

Do we get good value for all this money? Probably not. Canadian access to high-tech diagnostic equipment is in the bottom third of OECD rankings, never far from the access in Poland, Hungary or Greece. In most cases, access to technology in the Czech Republic is superior to ours, and it was a Soviet satellite state until a little more than a decade ago. Then again, the Czech Republic broke with the Soviet model of state-controlled and centrally planned health delivery. Canada has yet to do so.

Despite all the money we commit to state health care, our life expectancy is only 10th in the industrialized world. We are 17th in doctors per 1,000 population. And our mortality rate for common diseases such as breast cancer and heart problems is only in the middle of the pack.

Not surprisingly, no other modernized country — not one — follows our example and relies exclusively on state-monopoly health delivery, not socialist Sweden, not Switzerland nor even collectivist France. It would be like relying entirely on Canada Post for delivery of all parcels and packages, and just as unwise.