What it takes to keep the Canadian health care system safe, healthy, and effective
Posted by Fortune on Sunday, June 18, 2020 11:10:11 Canadian health-care systems are among the world’s most costly, but some are starting to make progress.
Canada’s health-systems minister, Dr. Richard Prentice, recently said that the country was on track to meet its 2020 target of saving $2.7 trillion from 2020 to 2024.
That means a $2,000 health care bill for a single family could be reduced to $600.
(It’s a lot less than the cost of buying a pair of socks, a $10 pair of sneakers, or a $100 smartphone.)
But that’s not the full picture, said the economist Peter Haney of CIBC World Markets.
“We’re on track for about $1 trillion in savings over the next 10 years.
That’s a big, big number,” he said.
The first phase of the Canada Health Transfer, which aims to provide much of the country’s health care for less than $1,000 per year, is scheduled to begin in 2021.
But the program has yet to reach its target of $2 trillion by 2024.
There are other programs that could cut costs.
In Canada, the Canadian Medical Protective Association estimates that its members will save $200 billion over the course of 2035 from medical costs alone.
In the United States, the American College of Emergency Physicians estimates that medical costs could be cut by $3.5 billion per year over the same period.
Some countries, like Britain, have also been cutting costs through higher taxes on the wealthy.
But Haney said Canada’s savings from medical-care cuts will not be enough to offset the increased cost of the Canadian economy.
“It’s not enough to keep us afloat, but it’s going to keep Canada afloat,” he told Fortune.
And even if Canada is able to meet the 2020 target, that will only help to the extent that Canadians keep their health-insurance plans.
There is a $9 billion program called the Canada Savings Plan, which has been set up by the provinces to help the provinces meet their targets for health care spending.
That money is supposed to go toward covering some people’s medical costs, but that could be harder to achieve if the Canadian Health Transfer doesn’t come to fruition.
“Even though we have been saving money, there are still costs in the system,” said Haney.
“The Canadian health system is going to be less efficient.”
Health care can be expensive.
While health-service costs in Canada have fallen for the last 10 years, health-accountancy firm Deloitte said in its latest survey that the total cost of health care in Canada is about $10 trillion.
That includes the costs of health-services workers, doctors, hospitals, drugs and other medical supplies, and nursing homes.
But that number is expected to climb.
“I think that the government will have to come up with an answer to how it is going a lot higher,” Haney says.
“That’s going be one of the major questions that we will be asked.”