Andrew Keyes

As average life expectancy continues to rise, and as expensive technical and medical advances continue, we in the developed world will see medical costs continue to increase. These increases are not due to the evil effects of raging capitalism – rather they are the quite natural effects of serving an aging population that wants access to life-saving treatments – life-saving treatments that are made possible by the natural response to a market demand wishing to live a longer and healthier life.

This is the real world. Healthcare is expensive.

As we have observed in Canada, where government controls access to health services, there is often tremendous political pressure to maintain balanced budgets without increasing taxes. Healthcare costs represent the largest budget item, by far, for provincial governments (approaching 50% here in Ontario). Faced with having to deal with this dilemma, in 2004 the McGuinty government in Ontario did nothing to improve healthcare, rather they chose to cut back on health care services and increase taxes. This was the largest tax increase in Ontario history, and came shortly after the Ontario Liberals campaigned on a pledge to not raise taxes (but that’s another story).

If Barack Obama has his way, it looks like America will be heading down this same path of declining health care services and increased taxes:

President Barack Obama on Saturday proposed an additional $313 billion in cuts to Medicare, Medicaid and other programs to pay for healthcare reforms expected to cost about $1 trillion over the next decade.

“I know some question whether we can afford to act this year. But the unmistakable truth is that it would be irresponsible to not act,” Obama said in an advance text of his weekly radio address.

Obama wants a healthcare reform bill on his desk by October, but faces opposition from Republicans who oppose creation of a government-run insurance plan to compete with private insurers.

Many of his fellow Democrats are wary of making deep cuts to Medicare and Medicaid, the U.S. healthcare programs for seniors and poor people, to pay for reforms.

With the cost of U.S. healthcare continuing to rise rapidly, Obama argued the country could not afford to wait another year for sweeping changes.

But he acknowledged the ambitious plan would increase government costs in the short run.

To address those concerns, Obama has pledged to come up with enough spending cuts and new revenue to pay for reforms.

Source.

It’s popular here in Canada to hold our public healthcare system up as better than the American system. The American system is often criticized for it’s lack of universality – after all “millions” of Americans have no healthcare insurance. But we seldom distinguish the difference between having “insurance coverage” and having “access to healthcare”. Here’s an interesting take on that subject:

Another statistic often quoted, in support of socialized medicine, is the fact that Canadian health care costs are lower than in the United States. Many would argue, in fact, the costs are proportional to the level of services offered, and that the significant difference in service wait times should also be considered. People in Canada simply do not have access to many medical services available in the U.S., and often when we do we must wait much longer for that access. Unfortunately, this story is all too common here.

Before you go down the road towards socialized medicine, America, ask yourself two very simple questions:

1. With real healthcare costs rising and demand for services increasing, do you really think the government is the best institution to deliver value for your money? In other words, can you think of any other government undertaking that has delivered services efficiently in the past?

2. When it comes to deciding what medical treatments you need access to, would you prefer that decision is made by your doctor or by your government?

This is most certainly not a trivial matter, and I wish you well as you debate these questions.