Michael Rachlis MD

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Good news about Medicare

10 November 2010, 1:21 AM

I have an op ed in today’s Toronto Star on Medicare’s good run. The Canadian Institute for Health Information released their annual health spending numbers two weeks ago. Health care costs have decreased their share of the economy or Gross Domestic Product (GDP) slightly in 2010 - from 11.9% in 2009 to 11.7% after shooting up from 10.7% in 2008. It turns out that almost the entire increase in 2009 was due to shrinkage in the economy not increased spending.

The graph below summarizes the Canadian spending data and indicates what the results would have been for 2009 and 2010 with 1998-2008 rates of economic growth. I have put together a few slides which summarize the new data for Canada and Ontario. Please use them and distribute them.


During the summer, Alberta Health Services concluded that it would be cheaper to purchase surgery at the public Calgary Foothills hospital ambulatory care centre than the for profit Health Resource Centre. On September 30th, Saskatchewan arbitrator concluded that it would be cheaper for the Regina Qu’Appelle Health Region to provide its own surgery and imaging than contracting with a private provider.

Arbitrator Dan Ish, a former dean of law at the University of Saskatchewan, concluded that the health region’s costing methodology was faulty and that even if additional capital expenditures are required, i.e. building a public ambulatory surgical facility, it would be less expensive than to pay for care in the private clinic. The arbitrator declared that contracts for private services need to be terminated by 2013 and the procedures returned to the public sector.

Toronto economist Hugh Mackenzie and I wrote a report for CUPE for the arbitrator and Bob Evans and I appeared as witnesses. The arbitrator’s report sections on costing make interesting reading.

Will the people calling for an “Adult” conversation on Medicare please grow up!

The Star column is an attempt to respond to the gloom and doom that passes for an “Adult” conversation about Medicare. For example, this week, the Globe and Mail has been running a multi part series on health care.

On Saturday, the Globe ran a “day in the life” of Vancouver Cambie Clinic’s Dr. Brian Day. The former president of the Canadian Medical Association continues to peddle his wares through the country’s fawning media. I’m not blaming the reporter at all (former Globe health policy reporter and now BC beat reporter Rod Mickleburgh) who was asked to write the profile but haven’t we had enough of Dr. Day’s self-promotion and creative use of statistics and economics?

Then Andre Picard’s column on Monday recommended trashing the Canada Health Act with no particular replacement. This is in apparent contradiction of his October 27th column on federal health transfers.

On Monday the same Andre Picard I normally agree with claimed that as long as we have public payment it doesn’t matter whether services are delivered by for profit or not for profit clinics. Of course it does matter. For profit care tends to be more expensive. Andre is a good journalist who usually knows his onions but he seems blind to the evidence about the problems in the for profit sector and the successes in the not for profit sector.

Hopefully, tomorrow - Wednesday November 10th’s piece on public sector successes will add some balance. I will be the Globe expert online for an online discussion on Wednesday at noon Eastern time. Join the discussion!


Medicare is as sustainable as we want it to be!

A lot of discussion continues questioning the sustainability of Medicare and the impending doom to be wrought by millions of seniors. Of course most of it isn’t true. There are several pieces on sustainability at the website including “The Sustainability of Medicare” which I co-authored with Toronto economist Hugh Mackenzie.

In “The Sustainability of Medicare”, we used techniques UBC Health economist Bob Evans and colleagues have used for over 20 years demonstrating that aging per se adds very little to health care costs. Hugh did a nice piece not done previously looking at the results by province and territory which showed some interesting differences.

Aging added 0.8% to annual health costs between 2001 and 2010 and it will add about 1.0% to annual health care costs for the next quarter century.

I recently reviewed these issues as a keynote presenter for the Canadian Health Services Research Foundation series on Health Care and the Aging Population. My slide deck, Demographics, aging and financial sustainability, is available for download and sharing. I have also put together ten slides which cover the major health spending issues for Canada and Ontario.


Let’s tell the real story about health spending:

  • Canada’s current health care costs are increasing
  • Health increased its share of GDP from 2000 to 2009
    • It fell this year
  • But recent increases in health care’s share of the GDP are almost totally due to the recession
  • Health care has slightly increased its share of provincial budgets due mainly to cuts in other areas rather than increases in health spending
  • Canada’s health costs are similar to other wealthy countries and substantially less than those in the US

Medicare is as sustainable as we want it to be. Don’t let anyone tell you otherwise.

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