The dangerous myths about medicare

By Thomas Walkom
Toronto Star
November 25, 2011

With medicare talks underway again, two pervasive health-care myths need be cleared up and one warning given.

First, medicare isn’t about to be bankrupted by the elderly. That’s a common misconception, spurred by the fact that baby boomers — those born between 1946 and 1964 — are nearing retirement.

In both political and media arenas, this particular myth is treated as unshakeable truth, creating fears that doddering boomers will monopolize virtually all health-care dollars.

But as figures released this month by the Canadian Institute for Health Information (CIHI) demonstrate, such fears are grossly exaggerated.

The government-funded agency calculates that the aging population has only a “modest” effect on medicare spending — in large part because, thanks to social programs like old age security, Canadians over 65 are healthier than they used to be.

Indeed, as with most people, the most expensive medical care in an elderly person’s life usually occurs just before the point of death.

The institute doesn’t dismiss out of hand the role of aging. It just points out that other things — such as wages paid doctors and overall population growth — are far more important in determining health-care costs.

Second, medicare costs in general aren’t spinning out of control.

This is an even more pervasive media myth, spurred on by doomsayers who argue that health-care spending, if unchecked, will soon consume entire provincial budgets.

In part, this misconception results from the fallacy of extrapolation — the assumption that past trends must inevitably continue.

It reminds me of a prediction, made before the invention of the rotary dial phone, that by 1960 all North American women would be working as switchboard operators.

That turned out to be false. As physician and consultant Michael Rachlis pointed out in this newspaper, so has the myth of the voracious health budget.

The CIHI report explains why. It notes that governments cut back health-care spending growth severely during the recession of the early 1990s, then — because of public pressure — reversed themselves later on.

As a result, provincial government health spending did accelerate. But by 2003 the growth rate had levelled off. In the last two years, it has slightly declined.

All of this is important because governments now are starting to debate — again — what to do with medicare.

The current federal-provincial deal on cost-sharing expires in 2014. A meeting of health ministers in Halifax on Friday officially marked the beginning of the next round of negotiations.

Last time, the focus was on reducing wait times and restoring services that deficit-burdened governments had slashed during the ‘90s. This time, if the Ontario is any indication, governments are likely to focus on systemic reforms that allow them to save money.

So here’s the warning. No government is likely to attack medicare head on. They’ve learned that this is political suicide.

But as Don Drummond, an influential economist charged with recommending ways for Ontario to save health dollars, noted in a recent report for the Conference Board, the laws regulating medicare are remarkably flexible.

They do permit, for instance, the private delivery of publicly funded health services. Most physicians are already private entrepreneurs. My guess is that governments will be looking at ways to privatize even more — from hospitals to specialty clinics — all within the medicare umbrella.

In theory, this could work out. Or, as in Britain today, it could undermine the very nature of the public health-care system. The devil will be in the details. If you care about medicare, this is a good time to start paying attention.