How to improve health care and reduce costs

Health-care costs for seniors are rising. Privatized care can help manage this demand surge

By Gauree Chawla
Research associate

Frontier Centre for Public Policy

COVID-19 has left a gaping hole in Quebec’s health-care system. Lack of nursing personnel, testing shortages, overflooding hospitals and postponed surgeries have turned Quebec’s health care into complete chaos.

“We must invest in the health-care system, which is in the process of crumbling,” argues Quebec nurse union official Karine D’Auteuil.

Unfortunately, increased funding may not solve Quebec’s problems. Quebec’s health-care funding increased by 71 per cent between 2004 and 2017 and has been rising since the brutal health cuts in 2015.

Click here to downloadCanada’s health-care system remains one of the worst compared to 10 other high-income countries. According to the 2021 Commonwealth Fund report, Canada’s health system scored seventh on administrative efficiency and ninth on access to care.

Simply increasing spending won’t resolve Quebec’s systemic challenges. It’s like when the government of Canada agreed to increase federal health transfers in 2004 to help reduce wait times across the provinces. Wait times have only lengthened over the years.

In 2021, Quebec agreed to spend an extra $10.3 billion over the next five years to strengthen the health-care system. Increased spending to manage the economic and health-care damages from the pandemic will come at a cost.

Former finance minister Carlos Leitão argues that the majority of the efforts required to clean up Quebec’s startling $12.3-billion debt will occur after the provincial election in October 2022.

While increasing spending might be necessary to manage the pandemic, in the long run, such persistent increases in health-care spending are unsustainable and ineffective. Quebec must look to alternatives to manage its crumbling system.

Keep an Eye on Quebec

One potential solution is activity-based funding. Instead of funding hospitals based on a predetermined budget, Quebec can distribute funds based on needs. If a hospital treats more patients, it should receive a higher budget. If another hospital lags, it won’t receive the money.

Activity-based funding will incentivize hospitals to improve their systems to treat more patients and gain more funding. It will allow Quebec to manage high patient volumes during and beyond the pandemic.

Increasing private health care beyond current levels may also help Quebec manage its misery. Many high-income countries such as Sweden and the United Kingdom have combined public and private systems. By increasing private care, Canadian provinces like Quebec can increase their system capacity.

Increasing privatized care will also help manage Quebec’s rapidly ageing population. By 2066, those 65 and older will account for 27 per cent of Quebec’s demographic.

Health-care costs for seniors are significantly higher than for the average adult. In the next decade, the ageing population in Canada will result in $93 billion in health-care costs. Privatized care can help manage this demand surge.  

COVID-19 has made clear the inefficiencies in Quebec’s ailing health-care system. However, there are many more challenges ahead. Quebec must adapt its health-care model and strike before the system crumbles.

Gaauree Chawla is a research associate with the Frontier Centre for Public Policy.

Gaauree is a Troy Media Thought Leader. For interview requests, click here.


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