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Financing health care: is long-term sustainability possible?

Report shows maintaining medicare is a matter of choice and political will, not government's ability to pay for it.

by Sean Burnett, CCPA

December 15, 2008 — Publicly funded health care continues to be affordable in Canada according to a recent Canadian Centre for Policy Alternatives' analysis, Financing the Health Care System: Is Long-term Sustainability Possible?

Sean Burnett, a master's student in the public administration program at the Johnson-Shoyama School of Public Policy, says that maintaining the medicare system is a matter of choice and political will, not government's ability to pay for it.

Burnett's report analyzes three indicators of sustainability: the ratio of total health care spending to Gross Domestic Product (GDP), the ratio of public spending on health care to GDP and the ratio of government health expenditures to total government revenue. He demonstrates that there is sufficient federal and provincial fiscal capacity to maintain and improve our medicare system.

"According to Saskatchewan Budget estimates, total expenditures have increased on average 8 percent a year from 2002 to 2008. Health's share of expenditures has risen by an annual average of about 4.3 percent during this period. At the same time Saskatchewan's GDP has increased on average by 8.3 percent per year. Thus the province's health care expenditures are far from being out of control and are, in fact, affordable."

The report makes two major recommendations: avoid privatization and implement reforms to the medicare delivery system. "There is no correlation that demonstrates private financing will improve health care delivery. It will only change who pays and who receives." Burnett says.

A strong federal presence in the financing of public health care is a priority as it receives a much larger share of personal income tax revenues than the provinces. Federal enforcement of the Canada Health Act in provinces that do not follow its principles will help prevent sliding down the slippery slope of privatization.

Links and sources
  Financing the Health Care System: Is Long-term Sustainability Possible? by Sean Burnett, published by the CCPA, November 2008

Posted: December 15, 2008

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