A hard cap for health care spending?

In a TJ article today:

Stéphane Robichaud requires few words when asked about the future of health care in New Brunswick.

Stéphane Robichaud, CEO of the New Brunswick Health Council, says most people are unaware of troubling statistics that show health spending in the province is unsustainable over the long term. “The system is not sustainable, not in the long term,” says the CEO of the New Brunswick Health Council.

I have been thinking about health care and writing about it as well – from an economics/fiscal perspective.

I have come to the conclusion that we have to come to some agreement about how much health care spending the economy can sustain.  I think we should agree on a hard cap- you pick the number – 10%, 15% as a percentage of GDP – and then fix that as a hard number for public health care spending.

We can’t control the private side – dental, eye, etc. but the public side we should fix some agreed upon measurement – spending growth tied to inflation, a hard %/GDP ratio, something to force cost sustainability.

I have been talking to health care professionals in recent weeks and I can’t think of any other option.

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5 Responses to A hard cap for health care spending?

  1. If, as you say, we can’t control the private side, then by what sort of magic do we manage to control the public side? Issue legislation requiring that people be more happy?

  2. I don’t think a hard cap (whatever the number) is the solution, as we will end up moving that cap right along with the corresponding cost increases (ie: Rationing). A GDP % approach would be a loose target at best, as the province has little influence on the cost of service delivery…it can only control service availability / quality.

    I cannot believe we don’t have reliable numbers on regionalization / privatization , etc. scenarios by now, so we can spend time looking at implementable solutions, hard or unpopular as they must, instead of what seems to be ‘paralysis by analysis’.

    What HC services would benefit from regionalization ? What are the savings ? What impact ?
    What role could private service delivery play ?

    How are other jurisdictions (national, international) facing similar issues dealing with this ? How are the change leaders making out so far ?

    I digress…but enough talking about it…we know the data, now lets make some decisions before they are made for us.

  3. In my view you either have to come to some broad agreement about what type of public health care we want or you have to set some target and then live within it. The current approach is increase spending three times the rate of inflation each year and then when deficits come try and starve the beast for a few years. The Lord people used to tell me they had to pour piles of cash into health care because McKenna ‘starved the beast’ the last 5-6 years of his administration.

    Now we are getting ready for another round of belt tightening.

  4. Derrick says:

    If a hard cap is the only solution, we might as well go back to
    the private insurance system. Private insurance with a tax credit
    ( refund of the medical cost share )or Public Health Care ( no refund ).
    Maybe a Opt Out Option to use the US system, as the rich do now.

    Ration Health Care, it’s rationed now by the wait times.

  5. richard says:

    ” the province has little influence on the cost of service delivery”

    That is a critical point. Another point is that NB has had miserable levels of economic growth for decades and we have one of the lowest median incomes in the country. The tax revenue to maintain services isn’t there.

    I’m afraid a cap, hard or soft, would simply become a sematic exercise for politicians, and would turn out like balanced budget legislation – a joke.

    Frederic is right that we need to get some transparency on the numbers re regionalization and other potentials for holding costs down. And there needs to be some more dialogue with the public on these costs and what they mean. There are a number of proposals from experts across the country re new appraoches to managing health care delivery – perhaps we should be experimenting with some of them here.

    “Ration Health Care, it’s rationed now by the wait times.”

    Get real. Its rationed by lots of things, from the willingness of a physician to order a test, and upwards from there. In other countries, its rationed largely by your income. All health care systems public or private have some element of rationing – the costs and demands are too great not to have rationing.

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