Free Markets, Free People

broke

Canada healthcare – the future of the US?

Guess what folks, Canada’s moon pony and unicorn “what’s wrong with you Americans, you’re so uncivilized to not have national health care” health care system is in serious financial trouble. And, unbelievably, for the very same reason critics of the recent US health care law said would inevitably happen here. I know, I know – just hard to believe, isn’t it?

Go figure.

The crux of the problem? Well lack of money, what else?

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

[...]

“There’s got to be some change to the status quo whether it happens in three years or 10 years,” said Derek Burleton, senior economist at Toronto-Dominion Bank.

“We can’t continually see health spending growing above and beyond the growth rate in the economy because, at some point, it means crowding out of all the other government services.

“At some stage we’re going to hit a breaking point.”

They’re kidding, right? Weren’t we told that once government got involved this stuff would be affordable and would go on forever?

Their first target, of course, is pharmaceutical companies. They want them to slash prices. But at some point, pharma is going to say it can’t anymore. Because pharma isn’t the problem. Central control of health care delivery is. It has no flexibility, or at least not to a level that it can adapt to changes in the market with any nimbleness. That means it continues to hemorrhage money. Health care spending rises at 6% a year by plan. But it is going to, as mentioned above, begin to crowd out all other government services unless the Canadian government gets a handle on it and does so fairly quickly. Anyone know what that means?

But that deal ends in 2013, and the federal government is unlikely to be as generous in future, especially for one-off projects.

“As Ottawa looks to repair its budget balance … one could see these one-time allocations to specific health projects might be curtailed,” said Mary Webb, senior economist at Scotia Capital.

My guess is more than “one-time allocations” might be curtailed. Consider Ontario:

Ontario says healthcare could eat up 70 percent of its budget in 12 years, if all these costs are left unchecked.

“Our objective is to preserve the quality healthcare system we have and indeed to enhance it. But there are difficult decisions ahead and we will continue to make them,” Ontario Finance Minister Dwight Duncan told Reuters.

That’s bureaucratise for “we’re going to have to ration this stuff and do it pretty darn radically” – unless, of course, Ontario would prefer to spend 70% of its budget on health care costs.

I doubt that’s the case.

Here again we have the end game (or at least the results of the game at this point headed to its inevitable end) of where we’re headed.

My favorite line in the story:

Scotia Capital’s Webb said one cost-saving idea may be to make patients aware of how much it costs each time they visit a healthcare professional. “(The public) will use the services more wisely if they know how much it’s costing,” she said.

“If it’s absolutely free with no information on the cost and the information of an alternative that would be have been more practical, then how can we expect the public to wisely use the service?”

No – she really said that. And that’s the type of person who first embraced the moon pony and unicorn promises that were made for the system.

The problem with all of this “reality” suddenly descending on the system? It is pretty apparent to anyone who has studied a welfare state (and the same place we’re now headed):

But change may come slowly. Universal healthcare is central to Canada’s national identity, and decisions are made as much on politics as economics.

“It’s an area that Canadians don’t want to see touched,” said TD’s Burleton. “Essentially it boils down the wishes of the population.

And so it goes, another chapter in the inevitable end of all such programs – over used, broke and headed toward strict rationing. And the moon pony crowd thinks that if they just tell Canadians how much it really costs when they see a doctor, they’ll do it less and save the system.

Heh, yeah, good luck with that.

~McQ

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