Thought du Jour

A new report from the Toronto-Dominion Bank calls for radical reforms to curb the explosive growth of expenditure on health care, but rejects the notion of forcing residents of Ontario (Canada) to pay privately for a larger portion of the health services they consume.

[T]here is just one major reform prospect that is glaring by its omission [from our 10 proposals to restrain the growth of health care costs]. That is much more extensive use of private financing in health care, either on a general basis or as more of a side door entry, through delisting of fairly common treatments. This is not to be confused with use of private sector resources to deliver health care. We do call for that in the name of efficiency. ….

For sure more private financing and delistings would save money for the public purse. But if all they did was shift the cost from the public sector to the private sector then nothing would be accomplished. And they could have negative side effects. There are several reasons why we have not recommended this bolder course.

First, there is little compelling evidence internationally that private financing saves total costs as opposed to just divesting them from the public sector. Second, there are risks to quality if health care providers shift resources away from the public portion of the system toward the potentially more lucrative private parts. Third, there is so much public and political resistance to private financing that the controversy could throw off track any potential for other changes that would improve the efficiency of the system. ….

Toronto-Dominion Bank, “Charting a Path to Sustainable Health Care in Ontario”, TD Economics Special Reports, 27 May 2010, p. 7.

This superb 34-page document ought to be required reading for anyone who worries about the fiscal implications of rising health care costs. Residents of provinces other than Ontario – indeed, residents of countries other than Canada – should read it, since rising health care costs are a problem everywhere.

Tags: Canada

This entry was posted on Sunday, May 30th, 2010 at 16:42 and is filed under Health Economics. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.