How to Head Off Quebec's $768 billion Healthcare Glacier - C.D. Howe Institute

Feb 07, 2013, 10:00 ET from C.D. Howe Institute

TORONTO, Feb. 7, 2013 /CNW/ - Quebecers carry a $768 billion fiscal burden - the higher tax bill for increased healthcare costs over the next half-century - and should prepare now for the coming demographic squeeze, says a report released today from the C.D. Howe Institute. In "Managing Healthcare for an Aging Population: The Fiscal Challenge Quebec Has Yet to Face," authors Colin Busby and William B.P. Robson recommend that Quebec prefund selected healthcare services and benchmark against other provinces to get better health bang for their tax bucks.

"Quebec spends less than any other province on total healthcare," said Colin Busby. "But there will be no hiding from the upward pressure on costs we project in the future. Our projections show the share of demographically sensitive programs, including healthcare, education and other age-based programs, rising from 15.3 percent of provincial GDP today to 25.4 percent over the next five decades. To meet these demands from its own resources, the province would need to increase its tax bite from Quebecers' incomes by more than half," added Busby.

The study projects Quebec's population and the impact of demographic change on government revenues and programs. Among its recommendations:

  • Prefunding: finance some healthcare services similarly to the Quebec Pension Plan, which converted from pay-as-you-go to a model in which a portion of premiums collected from participants today prefunds their own benefits in the future.

  • Benchmarking best practices: Quebec spends less than any other province on total healthcare and in particular on physicians and "public health," which includes expenditures for items such as food and drug safety, health inspections, health promotion   activities, and community mental health programs. However, Quebec spends more - and has been increasing spending faster - on "other institutions," which includes nursing and residential care homes. "Having nursing and residential home costs in line with the national average would lower Quebec's spending by some $750 million annually," noted William Robson. "Comparing bang-for-buck in these areas with other provinces could help Quebec deliver quality care without compromising other fiscal goals, such as fair tax rates for tomorrow's working population," added Robson.

For the report go to:

SOURCE C.D. Howe Institute