Public Health Care Helps Business

WHERE DOES business stand on sustaining and strengthening Canada’s largely public and universal health-care system?
For William Blundell, chairman of Manulife Financial and from 1984 to 1991 chairman and chief executive officer of General Electric Canada, it’s a pretty good system that we should be proud of and should work to sustain.
Moreover, Blundell says: “Canada has the potential to create the best health-care system in the world.”
The mix between public and private spending on health care – about 72 per cent public and 28 per cent private when spending for dentists, optometrists, and prescription drugs is included – is “approximately right,” he says.

And, Blundell maintains: “There are enough public funds in the system to get the job done in an effective way.”
Blundell made these comments at a conference on Business and Health Care, organized by the Institute for Work and Health at McMaster University’s Centre for Health Economics and Policy Analysis.
As governments deal with budget deficits and cut back spending, we can expect an intensified effort by insurance companies, specialized service providers and health-industry consulting firms to generate a scare campaign that health costs are out of control and that more and more of the system should be privatized.
The result, though, would inevitably be to raise the share of Canada’s gross domestic product spent on health care, without any likelihood of improved health for Canadians and with fewer resources to invest in the future growth of the economy.

Canada devotes just under 10 per cent of its GDP to health care, compared with just over 14 per cent in the United States.
In fact, according to Robert Evans, Canada’s leading health economist, the United States spends some $100 billion a year just on paper-pushing in competing private-sector health insurance companies; a cost avoided in Canada.
A key problem the health-care system faces, Evans stressed, is that there is a wide range of businesses, from insurance to big pharmaceutical companies, that want Canadians to spend more on health care because they want to expand their sales.

As Blundell pointed out, one reason that the private sector’s share of health-care spending is rising is the growing costs of prescription drugs.
In effect, what these companies want to do is to shift the health-care debate from sensible cost containment, which could lead to less spending on health care without sacrificing health-care quality, to cost shifting, with increased spending on health care through rising costs of employee benefit plans or direct consumer spending.
Two of the ways they do this, as Blundell pointed out, is by promoting the idea of a second-tier system, in which people who can pay more have access to a separate health-care system, or to advocate copayment or user fees.

Both approaches, Blundell suggested, would be highly damaging to our public health- care system and would increase the share of GDP going to health care in Canada.
A third option, to define some health-care services out of the public system and into the private system, would not be as damaging, Blundell suggested. But this would probably also increase the share of GDP we spend on health care.

The key message from both Blundell and Evans is that we should resist the pressures for cost-shifting to companies and individuals for health care, adding to over-all health-care costs, and focus instead on cost containment to operate our system more effectively. This is where we should be taking the health care debate in Canada.
Canada currently has an advantage in attracting business investment because of its health-care system. But if business finds that its employee-benefit costs are going through the roof through rising drug costs and a requirement for growing private insurance coverage, then we will lose part of that advantage.
That’s a bottom line business should understand.
David Crane is The Star’s Economics Editor. His column appears in the Business section Tuesday, Thursday and Sunday.

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