Canadian healthcare system growth rate unsustainable

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A report by research and educational organization The Fraser Institute holds that current public healthcare system in Canada is not financially sustainable. According to Brett Skinner, director of health, pharmaceutical and insurance policy research for the Toronto-based firm, since 1997 public health spending has continued to increase, growing much faster than Canada’s ability to pay for it through the public system alone.

The paper, “Misinformation and Wishful Thinking about Medicare's Sustainability,” states that the most recent five-year trends clearly show that public health spending in six of 10 provinces is on pace to consume more than half of the total revenue from all sources by 2020.

Skinner argues that the most accurate way to measure sustainability of healthcare spending is to look at the ratio of public health spending to government revenue, which measures the ability of government to pay from current revenues.

He notes that if public health spending is to be kept at a stable percentage of revenue, then revenue must grow at least as fast as public health spending. If the required growth rate for revenue is higher than can be generated by gross domestic product (GDP) growth alone, it is clear that, if governments insist on clinging stubbornly to the existing system of financing healthcare, tax rates must rise or new taxes must be introduced, he said.