Aging population no threat to Canadian Health Care System

Of course the whole scare tactic about an aging population is used to argue for a two tier system, one where there would be two classes of seniors: those who could afford private health care, those who would just have to die or receive only less costly treatments from the public purse. Maybe proponents of such a two tier system would reluctanctly support government funded euthanasia!

September 12, 2007 - 17:36
By: JULILAN BELTRAME
OTTAWA (CP) - Canada’s aging population will have little impact on the cost of maintaining a viable national public health-care system over the next 40 years, says a new report.
The report by the Canadian Centre for Policy Alternatives seeks to debunk the “myth” of runaway costs as baby boomers enter their final years.
The 33-page research paper from senior economist Marc Lee predicts the aging baby-boomer generation will add less than one per cent to health-care costs each year. And it says the cost of maintaining the health-care system well into the future will be easily met by economic growth.
Taking into account aging, population growth and inflation, Lee says Canada’s public system can be maintained at current levels by increasing expenditures about 4.4 per cent a year. That’s below the nominal growth in the economy, which has averaged 5.4 per cent over the past 20 years.
If the economy were to grow at a faster rate, Canadians could easily afford to enrich health-care services, the report states, while keeping expenditures at the current 7.5 per cent of GDP.
“There’s a notion in the public that as the baby-boom generation recedes into retirement years, this is going to push health-care costs over the cliff, but it’s not true,” Lee says.
“When you look at population aging over the next 25 years, it’s a pretty major shift. But it is happening slowly.”
And health-care costs, the study found, do not rise uniformly as people age. In fact, most of the costs associated with aging occur in the last year of life, at rates about 50 to 100 times higher than seniors in general.
Using published health-care and population data, Lee concludes that aging contributed a mere 0.8 per cent to the cost of public health care in the last decade. Extrapolating into the future, he says the costs associated with aging will rise slightly but remain less than one per cent per annum over the next 40 years.
That doesn’t mean that health-care costs won’t rise much above estimated 4.4 per cent per annum, the report notes, but if they do it will likely be because of spiralling costs of new technologies, including new drugs, and rising expectations from Canadians - not aging.
“The real challenge for future health-care expenditures comes not from an aging population, but the amount of spending per person as represented by a wide range of new technological interventions,” the report concludes.
The report’s analysis may appear controversial to many in the public, and even among some politicians who have warned of spiralling health costs, but it is supported by the evidence, says Steven Lewis, a health policy consultant and adjunct professor at the University of Calgary and Simon Fraser University.
The biggest cost drivers in the health-care system, he says, are for new drugs, diagnostic imaging and usage, all of which can be managed.
Drug costs have risen from 9.6 per cent of the total health-care bill in 1985 to 17.7 per cent in 2004. As well, use of expensive diagnostic imagining, such as MRIs, has increased five-fold in the past decade.
But it is unclear whether Canadians are getting their money’s worth from such costly advances, says Lewis.
“There’s lot of new drugs being prescribed in place of older ones that were just as good and a lot cheaper. As well, we didn’t use to do much heart surgery on people over 80 because it was unsafe - now it’s pretty safe. So there’s a constant increase in the use of health-care services.”
Lee says one issue Canadians may have to address is what level of medical intervention is appropriate for very elderly people, noting that “billions could disappear into extremely expensive end-of-life treatments that prolong life by days or weeks, but do little to restore health or enhance quality of life.”
The good news, he says, is that Canadians can make those kinds of decisions based on ethical and medical considerations, not because of cost pressures brought on by the onslaught of aging baby boomers.
The paper’s summary: