British Columbia Could Pre-Fund Certain Healthcare Services to Head Off Coming Cost Crush

December 17, 2014 – British Columbians carry a $384 billion fiscal burden – the future 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 “Healthcare and an Aging Population: Managing Slow-Growing Revenues and Rising Health Spending in British Columbia,” authors William B.P. Robson, Colin Busby and Aaron Jacobs recommend changes to protect young British Columbians from the burden they will otherwise bear as the tax base grows more slowly and healthcare costs rise.

“One novel approach to addressing this burden would be to convert some healthcare services, like long-term care, from pay-as-you-go to plans that pre-fund some of tomorrow’s needs through premiums today, as the Canada Pension Plan does,” remarked Busby. Robson adds, “this switch would have babyboomers, rather than their declining number of children and grandchildren, pay some of the higher costs that loom.”

The authors find that for BC to meet future healthcare demands from its own revenue sources would require an increase of close to 70 percent in its tax bite. The report rejects higher federal transfers as a solution, noting that past boosts in federal funding have discouraged reforms that would have made provincial healthcare more sustainable.

Other recommendations to improve the sustainability of BC’s healthcare system include:

• Incorporate team-based primary care models where patients can get comprehensive non-major services from an organized group of healthcare professionals;
• Let less expensive medical providers, such as nurse practitioners, deliver simple services that are currently performed by more expensive doctors;
• Foster improvements in, and more use of, non-hospital care for seniors with long-term conditions.
• Establish and expand electronic health records; and
• Provide incentives for patients to take greater responsibility for maintaining their own health.

The authors conclude that benchmarking against other provinces’ best practices can help BC deliver high-quality healthcare in a sustainable fiscal framework for years to come.

For the report go to: http://www.cdhowe.org/healthcare-and-an-aging-population-managing-slow-growing-revenues-and-rising-health-spending-in-british-columbia/28271

The C. D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. It is Canada’s trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review. It is considered by many to be Canada’s most influential think tank.

For more information contact: William B.P. Robson, President and CEO, and Colin Busby, Senior Policy Analyst, C.D. Howe Institute, at 416-865-1904; E-mail: kmurphy@cdhowe.org.

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