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Mark Stabile

Deductible's demise offers lessons Add to ...

On Wednesday, the Government of Quebec announced it was dropping a proposal for a health-care deductible on users of doctors' services. The deductible's objectives were to raise money for the government and to increase people's awareness of the cost of health care.

In most provinces, health-care expenditures continue to grow faster than GDP. Quebec's Finance Minister discovered, however, that proposing a deductible - a $25 user fee for doctors' visits - generated significant resistance.

Sevil N-Marandi and I studied the issues and found that the failed proposal would not have met its two objectives. It would have generated between 1 and 1.5 per cent of Quebec's public health-care budget, only modestly addressing the need for revenue. In part, this is because the proposal included caps on patient costs and exemptions for lower-income Quebeckers - an essential part of an equitable health-care system.

The Quebec proposal also could have been improved when it comes to attuning people to the high cost of the health-care services they use.

Even in the absence of a charge based on use, providing patients and providers with information on the cost of health care might prove helpful in generating citizens' willingness to pay for a valued benefit.

The original Quebec proposal, while moving in this direction, would not have told patients the total cost of their care. It simply would have reported the number of doctors visits and the deductible owed; patients would have seen this information at tax time, their doctors would not.

Three potential improvements to the proposed deductible would have been beneficial:

. A step in the right direction would have been to provide both patients and providers with better information not only on the cost of treatment, but on the benefits of different treatment options. Collecting such information would be costly, and understanding the benefits of various treatment options would require some investment in health-care-technology assessment, but it would help achieve the goal of better informing the public and practitioners on what level of health-care use is most appropriate.

. Given the significant evidence that user charges can lead to a reduction in useful health-care utilization, particularly among more vulnerable populations, a more effective use of prices to alter behaviour would be "value-based cost-sharing." A recent report on health-care financing in the European Union, for example, argued that cost-sharing should be limited to encouraging the use of high-value services and discouraging the use of low-value ones. This type of charge would go hand in hand with the information provided on costs and benefits to both provider and patient.

. Finally, if policy makers insist on pushing forward with some type of broad health-care deductible, and using the tax system to administer it, a smoother, more progressive form of income-based charge could be considered to both minimize the burden on lower-income individuals and ensure that the tax burden for low-income earners does not increase punitively with incremental health-care use.

Quebec's government was wise to withdraw its proposal for a health-care deductible. However, lessons from the failure of this proposal could help better inform our policy makers, in other provinces as well as Quebec, as they continue grappling with the increasing costs of health care in difficult economic times.

Mark Stabile is a fellow-in-residence at the C.D. Howe Institute, associate professor at the Rotman School of Management and director of the School of Public Policy at the University of Toronto. His study with Sevil N-Marandi, Fatal Flaws: Assessing Quebec's Failed Health Deductible Proposal, is available at www.cdhowe.org.

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