Canada's health-care gift horse hardly free

Printer-friendly version
Appeared in the Ottawa Sun, July 31, 2018
Canada’s health-care gift horse hardly free

The Canadian health-care system is often described as being “free” simply because we don’t pay any money at the doctor’s office or hospital. Defenders of the status quo often claim that this feature of our so system—not payment at time of service—is so valuable it’s worth Canada’s long wait times, the sometimes difficult task of finding a family doctor, overcrowded hospitals and so-on.

Many of these same defenders frequently remind critics of the system’s supposed “freeness” and urge critics, in so many words, to not look a gift horse in the mouth.

Of course, in reality, our health-care system is far from free. Canadians pay a substantial amount for public health care through the country’s tax system, so it’s prudent to take a hard look at the gift horse and ask hard questions about whether we get good value for money.

Unfortunately, it’s rather difficult to calculate just how much our health-care system costs. Sure, we know that provincial and territorial governments spent about $157 billion on health care last year. The question, however, is who paid the bill? And how much did they pay exactly?

Because we don’t pay health-care premiums (at least not premiums that fully fund health-care costs) or a dedicated health insurance tax, it’s difficult to answer those questions.

However, an annual study by the Fraser Institute, based on data from Statistics Canada and the Canadian Institute for Health Information, helps shed some light on the situation. This year’s study estimates the average Canadian family (two parents, two children) with a household income of $138,008 will pay $12,935 for public health care in 2018 through a variety of taxes. And the average single individual earning $44,348) will pay $4,640.

Of course, Canadian families pay vastly different amounts for health care through their taxes depending on their income. For example, the 10 per cent of Canadian families with the lowest incomes (earning $14,885 per household, on average) will pay $496 for health care in 2018. Families among the top 10 per cent of income earners (earning a household income of $291,364 on average) will pay $38,903.

Importantly, considering all families together, we estimate the amount we pay for public health care increased 185 per cent since 1997 (the first year of calculable estimates). By comparison, the consumer price index (a tool used to measure inflation) only increased 46.5 per cent. And the average family income only increased by 102.8 per cent during this same period. In other words, the cost of public health-care insurance increased 1.8 times faster than the average family income.

Now, some people may read these estimates and think they’re getting a pretty good deal—and perhaps they are. Yet many families may question why, when they pay about $13,000 for health care, must they wait 21.2 weeks for treatment (the latest average wait time). Or struggle to find a family doctor. Or access to diagnostic imaging scanners (MRIs, etc.). Or access an acute-care bed at a hospital.

Either way, it’s important to understand how much we pay for public health care so we can better decide whether or not we get good value for our tax dollars.

Our health-care system is not a “gift horse”—the average Canadian family will pay almost $13,000 for health care this year. Surely, some families want to gauge whether they’re getting a bargain, need to negotiate the price down, or look for a healthier horse elsewhere.

Subscribe to the Fraser Institute

Get the latest news from the Fraser Institute on the latest research studies, news and events.