Providing Pharmacare for an Aging Population: is Refunding the Solution?

This IRPP (Institute for Research on Public Policy) Study (2), February 2010, discusses the potential prefunding of prescription drugs for Canadian seniors as a means to help ensure the financial sustainability of public health care.

While the authors support this proposal, the commentator provides an opposing perspective. Drawing on Canadian and OECD data, Stabile and Greenblatt first review the extent of the challenge we face in financing health care. They show that public health care costs have increased at a pace that has not been matched by increases in revenues. For instance, from 1982 to the present, Canadian health care costs grew on average by 6.9 percent a year, while the GDP grew on average by 5.7 percent. They also present evidence that tax rates on average have been on the decline. As a result of these trends, health care is now taking up the lion’s share of provincial program spending and, coupled with population aging, risks crowding out other
government spending areas. Accordingly, say the authors, Canada needs to consider options to continue to finance health care in an equitable and sustainable fashion.
http://www.irpp.org/pubs/IRPPstudy/IRPP_Study_no2.pdf