Canada's Medicare Bubble: Is Government Health Spending Sustainable without User-based Funding?

September 22, 2011
11:45 am - 1:30 am

The Sutton Place Hotel
955 Bay Street, Toronto
Map Location

Public health spending persistently grows faster than GDP and consumes a large and growing percentage of total available revenue in each of the Canadian provinces. Is the public cost of Canada’s health system financially sustainable without shifting at least some of those costs onto healthcare users? The empirical evidence suggests that the growth in health spending is not sustainable solely through redistributive public financing. Governments have tried to keep revenues growing as fast as spending by increasing federal funding and introducing new health taxes. On the cost side of the ledger, governments have tried to control spending through central budget rationing. None of these measures have stemmed the tide of health spending swamping provincial finances. International experience and economic evidence suggest that shifting a portion of expenditures to user-based, private financing would relieve public cost pressures, encourage economic efficiency, and offer a sustainable source of additional resources – without threatening universality.