Canada -- no, the West's -- Looming Health Care Crisis

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Health Care

So health care has been fixed for a generation. Weren’t you watching? No, you probably weren’t. Despite the hype, Paul Martin’s televised conference with the country’s provincial premiers was a snore to watch and, not surprisingly, a deal was not reached until the politicians closed the doors, switched into their negotiation voices, and turned the cameras off.

Still, a lot of people seem to be smiling. Paul Martin has come up with a few billion dollars more to help the provinces with their health care costs and he’s received assurances that the provinces will establish benchmarks that will show that the money is being put to good health care use. Jean Charest of Quebec was given a parallel deal in a show of assymetric federalism. There’s been more gnashing of teeth over federal/provincial relations than there has been over whether or not the deal actually fixes anything.

And, quite frankly, the deal fixes nothing. It’s short term, and offers no road map of how to handle the system beyond 2010.

On a few boards I attend, there has been debate about Canada’s health care system, its challenges, and the attempts that have been made to fix it. Despite the fact that Canada’s health care system remains popular with Canadians, there are fierce detractors. Some such individuals believe that sticking to the current model means disaster down the road. They advocate either going to the American model or, if possible, privatization beyond the American model.

Full disclosure, here; I remain a passionate supporter of the Canadian health care system, especially after seeing Erin’s experience with both the Canadian and American systems. We have visited Canadian hospitals far more often than we would have liked, but whether it was to treat a spiking fever from bronchitus/strep throat or to have surgery to treat her trigeminal neuralgia, the cost to us was nill. And while we have no complaints about the quality of the service on either side of the border, when Erin had a biopsy and underwent chemotherapy while living in the U.S., the costs put her in debt for the next five years. So I know which system I prefer.

The strongest advocates against the Canadian system, however, maintain that we are heading for disaster. Their thesis is based on the fact that in 2010, the first of our baby boomers will turn 65. As our population ages, our senior citizens will need more health care, and they’ll need costlier health care to maintain their quality of life. As the costs to the system go up, our costs will also go up, to near unmanageable levels.

It’s important to note that most of this thesis is correct. The flaw in the argument comes in the assumption that this applies exclusively to Canada. What has been described also describes the demographic shift of the United States and western Europe. And already I’m hearing that America’s health care system, which costs its taxpayers more per capita to cover fewer people, is looking ahead at its own health care apocalypse. Despite a system that relies heavily on private health insurance, legal regulations within the U.S. prevents anybody who requires medical assistance from being turned away by hospitals. To cover the cost of healing those that have no medical insurance, American hospitals have to subsidize these patients by charging insured patients higher rates. And as more people without insurance turn up with desperate medical needs — a situation exacerbated by the fact that a number of uninsured will have been forced to wait until their medical conditions become costly emergencies that can not be ignored — the result could be a “brownout” of the system. This doesn’t even consider the cost to insurance companies as their insured require more and costlier medical procedures.


The reality is that our population is getting old and, eventually, that part of our population is going to die. The cost of keeping them alive longer and maintaining a decent quality of life is going to overwhelm the ability of the working population to pay for it, whether its through taxes, insurance premiums, or lost economic potential. While public hospital bureaucracies can be bloated and Byzantine, privatization has not yielded the necessary savings or productivity improvements to translate into lower costs for taxpayers or patients, so the American, the European and the Canadian systems are all under threat.

The western world faces tough choices, some of which go beyond health care. Consider that, according to the 2001 Canadian Census, there are 9.47 million Canadians aged 45-64. Unfortunately, I can’t yet get the data more thinned out than that, but if we divide that number evenly across the age group, then consider that there may be 473,500 people aged 54 today. If we are blessed with an average lifespan of 80 years of age, and given that the people who die early or late will be replaced by those older and younger who die early or late, this could mean that 473,500 people are scheduled to die of natural causes in 2030.

According to Statistics Canada, 219,538 people died in 2001. So, in 29 years time, Canada may be dealing with 250,000 more deaths per year. Consider that when we have 24 people die of SARS, that’s a major epidemic. Consider also that those 250,000 will have required serious medical services in the years leading up to death. Consider also that, in the four years following, another million will be in the exact same situation.

Any public health care system will be strained by the needs of so many patients. Any private insurance system will be equally strained as the insured collect on their coverage for prescriptions and palliative care. Indeed, the very economy skews towards covering the needs of aging and dying citizens. Now’s the time to invest in funeral homes. Now may not be the time to invest in automakers.

Indeed, the situation resembles the onset of the 1970s, when an economic storm gave governments the bitter choice of either lowering the standard of living, or going into deficit. This time, the only reasonable market solution is for people to accept a lower quality of life, and people do not accept a lower quality of life easily.

How do we deal with this? The most obvious solution is distasteful, but the alternates are worse.

The obvious solution is to raise taxes. But taxes in Canada are already high, and taxes in the United States are even less popular. At some point, we are going to hit a plateau where the costs of health care could be an unsustainable tax burden, or it could push every other government expenditure off the rolls, or both.

One alternative is to throw everybody to the dogs and have the government provide only the most basic health coverage, while the rest of health care above that minimal standard is farmed out according to the market economy. This will mean transferring health costs from the taxpayer to the insurance corporation. As costs increase, so too will premiums, until we reach a point where insurance is too costly for most people. The rich will get the transplants needed to keep them alive; the poor and middle class will die in poverty and squalor.

The third alternative is to have the government decide for us how long people get to live, and the manner in which they shove off this mortal coil. While that may seem far fetched now, give us six years and I guarantee you that somebody else will be raising this as a uber-socialist distopian possibility — possibly as a means of countering the free-market-distopia scenario above.

These three extremes are all exaggerations; for the most part, society seems to avoid catastrophe by the seat of its pants. Governments will be forced to pick and choose acceptable aspects of all three roads. Taxes will increase, some services will be delisted, and governments will try to improve the health of the population by organizing fitness drives and perhaps taxing junk food. Expect a palliative care plan to start entering the news. Expect to hear the phrase “dying with dignity” far more often. Either way, it will be the governments that deal out these answers creatively that will survive the demographic shift the best.

Unfortunately, we have not been very creative about how to deal with the coming demographic shift. Paul Martin’s vaunted deal on health care amounts to throwing money at the problem, and only talks about solving things from now to 2010. Most American politicians won’t even admit that there is a problem. Proponents and antagonists on the public/private health care debate see nothing good about the other side, and thus far nobody has pointed out that the only way for our working population to support a growing senior population is to increase the size of the working population. Nobody has yet come forward noting the economic contributions immigrants have made to our societies and economies in the past, and how important it will be to attract a flood of young, hard-working immigrants to our countries in the future.

In my view, I still prefer the Canadian health care system, which shares the burden of caring over a wider population. This reduces per-capita costs, and will keep our health care costs lower than the Americans’ costs when the baby boomers start to get infirm. However, this alone will not stave off challenges to the system or a possible collapse unless we obtain more able-bodied taxpayers or workers to spread that burden across. If our population is getting older, we’ve got to make it young again, if not by babies, then by attracting individuals from the rest of the world. The same is true for America and Europe.

Health care is a passionate issue for Canadians, and it’s a surprisingly passionate issue for Americans as well, and in that passionate debate, there has been a lot of heat, a lot of smoke, and very little clarity. The crisis may not be close enough yet to strike that bolt of clarity into our hearts. But when that clarity does come, I think the proponents and the antagonists of the Canadian and American health care systems will discover that neither system is immune to the coming problems. We will find that there are no panaceas, no quick fixes, no single dogmatic solution that will magically cure everything. The only thing that will meet the challenge ahead is hard work.

Further Reading

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