health care costs

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Get ready for Medicare’s annual summer slowdown, where the forecast calls for possibly poorer than usual service levels.

Every year, provincial health care systems across Canada dutifully reduce the volume of services they provide in preparation for the summer vacation season. This planned-for reduction has the inevitable effect of lengthening waiting times for Canadians over the summer months (and during Christmas holidays). The added twist this year is the slowdowns might be extended in a bid to reduce expenditures.


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For many Canadians, the Victoria Day long weekend marks the beginning of summertime holiday planning, if not a late May escape after a long winter. For those who travel outside of the country in the coming months, we have a modest proposal: find a pub, sit down with locals and ask about their nation’s health care system.


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This week, Ontario Health Minister Deb Matthews published her plan for controlling provincial government health spending. While the Minister is correct when she says the growth of provincial health care spending is not sustainable, her proposed solution – more government-imposed central planning and bureaucratic management – is wrong. Ontario’s health system does not have a ‘management’ problem; it has an ‘economics’ problem.

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Facing a $16-billion deficit, the Ontario government announced it will stop funding a handful of medical services currently covered by the public health insurer. This should come as no surprise, as it has become the norm in Ontario as well as other Canadian provinces. This is because cost-containment strategies such as rationing access to medical services are intrinsic characteristics of single-payer health insurance.

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As the premiers meet this week in Victoria, a number of provinces are clearly distressed about the federal government’s plan to reduce the automatic annual increase in health transfers from the current six per cent to the rate of economic growth starting in 2017-18. While the announcement has not been applauded by most premiers and their respective health ministers, it is long overdue.

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When provincial and territorial health ministers recently met in Halifax to discuss the 2004 federal-provincial-territorial agreement on health transfers, which is set to expire in 2014, the resulting news reports simply reinforced the status quo. The provinces expect more money for health care from Ottawa.

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The true cost of Medicare for individuals and families in Canada is often misunderstood, with many people thinking it’s either free or covered by our provincial health insurance premiums.

This misconception has many sources. In part, it stems from the fact that health care consumption is free at the point of use, leading many to grossly underestimate the actual cost of care delivered. Furthermore, health care is financed through general government revenues, rather than financed through a dedicated tax, further blurring the true dollar cost of the service.


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Whenever talk of health care reform arises—and praise for European countries that combine universal coverage with more private sector involvement—a reflex inevitably kicks in. For some, it seems more privately-delivered or privately-insured health care is a policy choice akin to religious heresy. It’s almost as if government delivery and government insurance were an 11th Commandment: Thou Shalt Only Provide Health Care via Taxes and the Public Sector.