Wednesday, May 30, 2007

Medicare Part 2: Cost is not a problem

Again, I will start off by mentioning an argument against our treasured medicare system: our health care costs are going through the roof; the government simply can't afford to continue to fund health. Once again, there are fundamental flaws to one of their central arguments.

The main 'theme' in this argument is that our costs overall—for health—are accelerating, and therefore it is not feasible to continue to fund this as a country or a province. But it is not like they're lying; our health care costs are in fact rising. However, we cannot keep it to such simple terms as some people do. So while medicare costs are rising, they are not in fact rising in comparison to the GDP (Gross Domestic Product) According to economist Robert Evans.

Also speaking of health expenditures in comparison to the GDP, we can also look to Taiwan for some answers. At the conference I attended, there was an "International Perspective" session. One of these 'perspectives' was from Taiwan (provided by Tsung-Mei Cheng). In Taiwan, they too have a form of government-subsidized healthcare (modelled after Canada's). In 1994, 4.8% of Taiwan's GDP was being spent on public health care, which covered 58% of the cases/population. However, now Taiwan is spending only slightly more (5.7% of the GDP) on health, and more than 99% of the population is covered!

Finally, we must look at what part of our health system is increasing the costs of health. At the conference, Roy Romanow pointed out a common myth about our health system. Many people believe that every aspect of our system is publicly funded. This, in fact, is not true. An all too large percentage (more than 20%) of the health system is privately funded. We must also remember that when groups like the Fraser Institute say that our costs are rising, they are also including the costs of the private health sector as well. So when they say that we're paying too much, that also includes non-governmental funds, with budgets, fees and profits that are not at all controlled by the government. Romanow also gave us an example of the difference in cost increases, and while I was not intelligent enough to write down the time span of these increases, I did get the increases themselves. Over this certain time span, public health expenditures only rose by 4.5%, while private costs went up 6.6%; it is not, then, the public medicare system that is mostly driving up costs, it is instead the private system that is doing this.

So just remember, don't take the arguments exactly as they're told. The public system is still the way forward.


ALW said...

What about mixed systems in socially democratic countries, such as in Europe? Is our system superior to them?

Alex said...

Yes, our system is superior to what they have.

The problem with mixed systems is that health professionals have little incentive to practice in the public system. When they work in the private, they get paid much more (as people who would opt to use a private system have more money to spend). (Also, please refer to the statistic concerning New Zealand in my Part 1.)

So what happens is that the better doctors get into the private system to earn more money (rich people will only pay big bucks for good doctors), and the less experienced, not-as-good doctors would end up only in the public system. Thus, the public system—meant for people who can't afford the private—would have no really good doctors, and much less doctors in proportion to the private system. Rich people would therefore have better health care than people who can't afford to pay.

Also, having only one system (the public) saves money for tax payers for two reasons:
1. There is no-profit on health; and
2. One network of healthcare centres has a much better buying power to get stuff cheaper.

janfromthebruce said...

Also, in the private system, a new administration layer is created to manage the system. Like in the US, this system has become a huge part of the money sucking part.