Healthy Healthcare?

by MaxPower

Everyone loves healthcare and who wouldn’t? It cares for you when you need help the most, it provides a safety net in times of emergency and it gives all of us Canadians a little pride in knowing we’re better off than the Americans. To be blunt, this is not a R4NT about the importance of healthcare, nor the varying pros or cons behind public or privately run healthcare, rather about something which is much deeper. Are we paying too much for our health?

The recent election in Canada was basically run on healthcare as the “big issue”, the Liberals and the Conservatives ran on platforms which were more or less identical, more money to allow for shorter waiting times, more services and a better system. The NDP was slightly different, saying that rather than paying down our federal debt we should take that money and put it into healthcare, showing, as is not surprising, a shocking misunderstanding of the fundamentals of budgeting. If your household has $100,000 in credit card debt and 30 or 40% of the money you make goes to servicing that debt, it only leaves you with the 60 – 70% remaining for food, shelter, clothing and yes, indeed healthcare. Just like that, it is glaringly obvious that if you owe less money you have more money to spend on yourself. If you pay 10% to debt servicing, all of a sudden you have 20% more money to spend on whatever you like. Regardless, it would be tantamount to political suicide to say “we spend too much on healthcare” or “we spend an appropriate amount of money on healthcare now, we just need to make sure more of it gets to the people”. But are these really shocking ideas?

To me, a member of the baby boom echo, I barely use the healthcare system right now, but do I want it to be around when I’m 50 or 60? You bet. However, there is a problem. The massive demographic shift called the baby boom threatens to bend our healthcare system out of shape over the next 10 – 15 years. The baby boomers have done this all their lives. When baby boomers were children in the 1950’s, there were kids everywhere; I have heard stories of 25 – 30 kids living in 10 or 12 houses on a block. Road hockey games had so many kids around that they turned into a mass free for all. When I was a kid we were lucky to scrape up enough bodies to get a game of 5 on 5 going, and even then we had to recruit kids from a couple blocks away. Look at our infrastructure in Canada, specifically with respect to education. When were all the high schools and universities built or expanded? The late 1960’s and early 1970’s. That is no surprise considering that’s when all the boomers flooded the system causing a mass infrastructure construction boom. Now schools are being closed for lack of students, and even now as opposed to twenty years ago when I was a kid, schools which used to be full are starting to empty. Demography is cruel and in another 10 years, we, the young taxpayers, are going to get the short end of the stick. And I think we should be very, very concerned as it will be a very short stick.

The boomers are in their 50’s now, life is good, they are making tons of cash, kids are out of the nest and disposable income is at its peak. Ten or 15 years from now, boomers will be hitting 65. 65 is not a great age for health concerns. As of 2002, people over 65 accounted for almost 50% of the healthcare expenditures in Canada ($95 billion in 2002) but only make up 12.5% of the population. No bonus points to those who can figure out what is going to happen if 12.5% goes to 25% or even 35% of the population. Conservatively, if population over 65 doubles, healthcare expenditure will at least double (probably more due to inefficiencies in big organizations and more expensive technologies) which means in 10 or 15 years people over 65 will be consuming healthcare expenditures of approximately the same magnitude as ALL Canadians consume today or roughly $100 billion dollars. That other 75% of the population is going to get royally screwed. New hospitals will need to be built, new long-term care facilities will need to be built, a shocking increase in doctors and nurses are needed (constrained by the educational system, which can only graduate so many per year). One survey estimated the number of new doctors needed over the next ten years is 85% more than there are today, but yet no new university spots are open, and there are actually less people going to university every year thanks to the demographics. Additionally, there are a ton of baby boomer doctors (especially general practitioners) who will get out of the game at the time we need them most.

What does this mean for the government (provincial and federal)? It means while throwing money at the problem is a nice easy solution; it most likely isn’t a solution at all as there isn’t enough money in the system to throw. Even the NDP say they want to throw $28 billion at healthcare over 5 years, yet they would need around $80 billion MORE just to break even. A fundamental reworking of the system needs to be considered, not just to make sure Canadians have universal healthcare coverage going forward but so that the healthcare system doesn’t break entirely and bring the government’s finances down. A BC government health official was quoted in the Economist as saying if British Columbia continues spending on health care at the same rate over the next ten years there will “be no ministries other than healthcare and education” in the BC government. Ontario is spending 45% of the ENTIRE budget in 2004 on healthcare, up from 35% ten years ago. It is just literally not possible to continue spending on healthcare as we have been, we will simply run out of money. This proposition is made even tougher given that the baby boomers all can still vote which means healthcare will be the number one issue over the next 15 years guaranteed. Issues like tax cuts and spending for education will drop way down the list. Lets face it, boomers are one of the first conspicuous consumption generations and if they don’t have income as they are retired and they don’t have kids in school, their appetite for those measures will drop through the floor.

I picture the boomers as a giant steel ball moving down a hose, when they travel down the hose, the hose which was relatively tight before, gets stretched, stretched, and stretched to the breaking point (it hasn’t burst yet but it could) and then when the boomers pass, it gets all loose, deformed and saggy. Thirty years from now when the boomers are starting to go, the health system will look like the education system does now, half empty and distorted. We as a country must be able to have a discussion about alternatives to throwing more money at healthcare. I’m not talking privatization per se, (even though private facilities in Alberta DO provide services like hernia, cataract, nose and throat operations, which are paid for through the public system and available universally) but alternatives to cut down on the economic burden placed on future generations due to a demographic curiosity. There is a taboo in Canada regarding healthcare, no one can criticize the spending because it is seen as being critical to the very nature of the fabric of our country. Maybe the only way debate will be stirred is under the realization that there is no way to continue spending like we are; it is unfeasible no matter your political bent. Maybe then we can get started on working on solutions rather than waiting for the inevitable to happen.

MaxPower