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Economists who won't name winners and losers from dismantling medicare should be shamed

Claim that medicare is too costly to maintain is based on economic and political myths.

Claim that medicare is too costly to maintain is based on economic and political myths - Bob Evans.by Bob Evans (from The Toronto Star)

... It's true that total health-care spending in Canada has risen in recent years, taking larger shares of both government revenues and budget allocations. This has led to accusations of "crowding out" other public programs by those favouring further privatization of health care.

The data tell a much more nuanced story. The central fact is that, recession years apart, medicare spending – hospitals and physicians' services – has fluctuated between 4 and 5 percent of gross domestic product since 1975. After the introduction of medicare in the late 1960s these costs stabilized because universal, comprehensive coverage consolidated expenditures in the hands of a single payer. The cost of health services not covered by medicare has risen from 3 percent of GDP in 1975 to 7 percent in 2009.

Today, Canada's expenditures on health care match those by other OECD countries. The public share of overall health costs in Canada is relatively low for high-income OECD countries, around 70 percent. Private insurance, primarily for prescription drugs and dentistry, now accounts for 12.7 percent of Canadian health spending, 14th highest in the world. The OECD outlier is the United States, where extensive private finance supports uncontrollable cost escalation (now over 16 percent of GDP). Getting these costs under control will be the major task facing Obama's health-care reform...

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Posted: June 11, 2010

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