[EQ] Assessing Alternative Financing Methods for the Canadian Health Care System

Assessing Alternative Financing Methods for the Canadian Health Care System
in View of Population Aging

Doug Andrews
SEDAP Research Paper No. 224, November 2007
The Program for Research on Social and Economic Dimensions of an Aging Population (SEDAP) is an interdisciplinary research program centred at McMaster University

Available online PDF [50p.] at: http://socserv.socsci.mcmaster.ca/sedap/p/sedap224.pdf 

The cost of the Canadian health care system is approximately 10% of Gross Domestic Product (GDP). Survey-evidence suggests that Canadians do not wish to have additional funds spent on health care but believe that the system should be able to deliver better quality care. Due to low fertility rates and increasing life expectancy, the Canadian population is aging. Over the next 25 years, the dependency ratio will increase, primarily due to the aging of the “baby boom generation”

This will place twofold cost pressures on governments responsible for maintaining the health care system:

• As a consequence of increased life expectancy, on average, Canadians will have a longer period of health care consumption. Although age-specific cost may not increase, with an aging population aggregate annual health care expenditures are expected to increase.

• The dependency ratio is a proxy for the ability of the population to support itself. The      increasing dependency rate may result in a slowdown in GDP growth, given constant technology.

In Section I, this paper attempts to quantify these factors. A single measure combining cost and quality is developed to demonstrate the magnitude of the challenge.

In Section II, this paper examines a number of different approaches to health care financing including user fees and alternative compensation methods for physicians. The paper highlights documented information from Canada and international experience on the implementation issues involved. The paper evaluates the desirability of implementing these approaches in Canada.

Content

ABSTRACT
INTRODUCTION

SECTION I - HEALTH CARE COST PROJECTIONS

• Current Cost of Health Care
• Projected Canadian Health Care Costs - 2031
• Other Writers’ Analyses
• Considerations Regarding The Productivity Growth Assumption.

SECTION II - DEMAND MANAGEMENT THROUGH FINANCING

• Health System Performance
• Supplier-induced Demand (SID
• Cost Sharing
• Alternative Physician Reimbursement Models

CONCLUSION
APPENDIX A – MODEL ASSUMPTIONS AND METHODS
ENDNOTES
REFERENCES / BIBLIOGRAPHY.

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