“Most of the public-private spending debate in Canada is superficial, based on numbers that participants toss around but that they can’t actually be bothered to look at in any detail,” warns A First Look at the Numbers, a new background paper from the Canadian Health Care Consensus Group (CHCCG). The paper outlines general misconceptions and misinterpretations of data related to health care spending.
For example, the paper makes it clear that a distinction must be made when considering the terms “private” and “public”. Either term can refer to sources of health care funding or to the delivery of health care services. The larger part of what gets measured as health care expenditure in Canada is entirely publicly funded. The delivery, or in economic terms the “supply side”, is more difficult to characterize given the increasing role of drugs in the health care mix and the fact that hospital expenses can be both public and private, among many other issues.
A First Look at the Numbers also calls attention to the perception that private health care spending has accelerated dramatically since the early ’90s. In fact, private spending increased as a percentage of total (private plus public) spending primarily because debt ridden governments were forced to decrease public spending. The reality is that private contributions have increased at a slow steady rate since the establishment of Medicare in 1968.
The paper goes on to address other health care spending misconceptions by tracking the share of various public and private expenditures (hospitals, doctors, dental care, vision care, drugs and administration) in the total health care budget. It shows that the two sectors actually spend money on very different things. As an example private spending pays for such things as dental and vision care, while public spending pays for hospitals and doctors.
Contrary to what’s often implied, an increase in private sector share doesn’t mean that the public sector share is being eroded. The paper says it just means that spending on aspects of care that are not paid out of public funds is growing faster than the aspects of care paid for by the public purse.
International comparisons are often at the core of public-private debate. The U.S. is frequently cited as having a system very highly skewed in favour of private funding, which is, of course, true. A First Look at the Numbers points out, however, that public spending per capita in the U.S. has actually exceeded ours (and every other OECD country) in recent years.
Members of the CHCCG came together to provide a platform for bold, reasoned and practical plans for genuine reform of the health care system and to demonstrate that there is an emerging consensus among reform-minded observers about the direction that real reform must take. The CHCCG, coordinated by the AIMS, includes medical practitioners, former health ministers, past presidents of the Canadian Medical Association and provincial medical and hospital associations, academics, and health care policy experts, all of whom are signatories to the group’s Statement of Principles.
A First Look at the Numbers is one of a series of background papers prepared for the CHCCG, which are intended to contribute to that new debate. These papers do not represent official positions of the Consensus Group, and are not themselves consensus documents, but rather are intended to act as starting points for debate, some of which will occur on the Consensus Group’s website (www.consensusgroup.ca) The first few papers will deal with aspects of the “public” versus “private” debate, while later ones will consider other issues which were raised in the Consensus Group’s Statement of Principles.
The Canadian Health Care Consensus Group website can be viewed at www.consensusgroup.ca
This research was made possible through the generous support of the Lotte and John Hecht Memorial Foundation.