Latest AIMS’ papers demonstrate that sustainability is THE issue

[HALIFAX] —   Roy Romanow is wrong if he believes that current spending levels can be maintained or that spending growth is likely to slow any time soon say two papers released today by the Atlantic Institute for Market Studies (AIMS). These two reports are the last in a series of 12 background papers that informed the Institute’s major contribution to the country’s debate over the future of medicare, the Definitely NOT the Romanow Report, which received front-page coverage in the national media on its release in late November.

“How often have we heard the mantra that Canada has the best health care system in the world? So, why isn’t health care in Canada as good as it used to be?” asks Brian Ferguson, Guelph University health economist and author of Expenditure on Medical Care in Canada: Looking at the Numbers, the first of two papers released today.

According to Ferguson, “medicare’s much-heralded success at cost control is illusory. Simply put, the introduction of medicare did not introduce a period of health care cost control in Canadian health spending.”

The reason the Canadian health expenditure to GDP share fell below the US figure was not because of differences in the rate of growth of health spending, but rather because Canada happened to have the good fortune to bring medicare in during a period in which the Canadian economy outdid the US economy in terms of real growth.

Had our economic growth been as weak as US growth through the 1970s and ’80s, for two decades our health spending to GDP share would have been higher than the actual US GDP share. In other words, Canada would have had the most expensive health care system in the world, a situation that would have changed only in the 1990s when governments got serious about its fiscal crisis.

The Non-Sustainability of Health Care Financing Under the Medicare Model, follows up on the points raised in Looking at the Numbers and argues that, without real substantial reform, we are not going to escape our place as the big spenders on health care any time soon.

A dramatically aging population, the introduction of new and ever more expensive medical technologies and rising consumer demands for the highest quality, leading-edge health care are driving costs beyond the capabilities of the health care system to afford them while relying on public financing alone.

“The sustainability of the health care system ultimately depends on whether public budgets can continue to absorb the costs of health care for Canadians,” says Brett Skinner author of Non-Sustainability, “the evidence indicates that the medicare approach is failing and will not be able to fulfill expectations without fundamental reforms.”


For further information, contact:
Brian Lee Crowley, President, AIMS, 902-499-1998
Brian Ferguson, 519-824-4120
Brett Skinner, 519-978-9936