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Chronic Healthcare Spending Disease: A Macro Diagnosis and Prognosis

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  • David A. Dodge

    (Bennett Jones LLP)

  • Richard Dion

    (Bennett Jones LLP)

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    Abstract

    The amount Canadians spend on healthcare is set to rise rapidly over the next two decades and Canadians need to face up to tough choices to deal with this “spending disease.” The study examines the trajectory of total healthcare spending – public and private – in Canada and the policy choices Canadians must make in response. The authors estimate the extent to which healthcare spending is going to absorb a greater fraction of income than Canadians have experienced to date under two scenarios: a baseline scenario drawn from historical experience, and an optimistic scenario, which assumes an unprecedented improvement in the efficiency and effectiveness of the healthcare system and large improvement in potential economic growth. Canadians must choose some combination of: 1) a sharp reduction in public services, other than health care; 2) increased taxes to finance the public share of healthcare spending; 3) increased individual spending on healthcare services currently insured by provinces, through some form of co-payment or through delisting of services that are currently publicly financed; 4) or a degradation of publicly insured healthcare standards – longer queues, and services of poorer quality.

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    Bibliographic Info

    Article provided by C.D. Howe Institute in its journal C.D. Howe Institute Commentary.

    Volume (Year): (2011)
    Issue (Month): 327 (April)
    Pages:

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    Handle: RePEc:cdh:commen:327

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    Keywords: The Health Papers; healthcare spending; Canada;

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    1. John Richards, 2011. "School Dropouts: Who Are They and What Can Be Done?," e-briefs, C.D. Howe Institute 109, C.D. Howe Institute.
    2. Philippe Bergevin & William B.P. Robson, 2011. "The Costs of Inflexible Indexing: Avoiding the Adverse Fiscal Impacts of Lower Inflation," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 322, February.
    3. Kevin D. Moore & William Robson & Alexandre Laurin, 2010. "Canada’s Looming Retirement Challenge: Will Future Retirees Be Able to Maintain Their Living Standards upon Retirement?," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 317, December.
    4. Elod Takats, 2010. "Ageing and asset prices," BIS Working Papers 318, Bank for International Settlements.
    5. Robert E. Hall & Charles I. Jones, 2005. "The value of life and the rise in health spending," Proceedings, Federal Reserve Bank of San Francisco, Federal Reserve Bank of San Francisco.
    6. Alexandre Laurin & William B.P. Robson, 2011. "A Faster Track to Fiscal Balance: The 2011 Shadow Budget," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 320, February.
    7. Andrew Sharpe & Celeste Bradley & Hans Messinger, 2007. "The Measurement of Output and Productivity in the Health Care Sector in Canada: An Overview," CSLS Research Reports, Centre for the Study of Living Standards 2007-06, Centre for the Study of Living Standards.
    8. Jotham Peters & Chris Bataille & Nic Rivers & Mark Jaccard, 2010. "Taxing Emissions, Not Income: How to Moderate the Regional Impact of Federal Environment Policy," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 314, November.
    9. David Longworth, 2010. "Warding Off Financial Market Failure: How to Avoid Squeezed Margins and Bad Haircuts," C.D. Howe Institute Backgrounder, C.D. Howe Institute, C.D. Howe Institute, issue 135, December.
    10. Alexandre Laurin & Finn Poschmann & William B.P. Robson, 2011. "When Striking an Awkward Balance Means Striking Out: Budget 2011," e-briefs, C.D. Howe Institute 112, C.D. Howe Institute.
    11. Angelo Melino, 2011. "Moving Monetary Policy Forward: Why Small Steps - and a Lower Inflation Target - Make Sense for the Bank of Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 319, January.
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    Cited by:
    1. Law, Michael R. & Daw, Jamie R. & Cheng, Lucy & Morgan, Steven G., 2013. "Growth in private payments for health care by Canadian households," Health Policy, Elsevier, Elsevier, vol. 110(2), pages 141-146.
    2. John Richards, 2011. "Aboriginal Education in Quebec: A Benchmarking Exercise," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 328, April.
    3. Grady, Patrick, 2012. "The parent and grandparent immigration program in Canada: costs and proposed changes," MPRA Paper 37289, University Library of Munich, Germany, revised 08 Mar 2012.

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