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Barack Obama is all smiles with House Speaker Nancy Pelosi during the U.S. President's visit to Capitol Hill on Saturday, March 20, 2010. (Pablo Martinez Monsivais)
Barack Obama is all smiles with House Speaker Nancy Pelosi during the U.S. President's visit to Capitol Hill on Saturday, March 20, 2010. (Pablo Martinez Monsivais)

John Ibbitson

A health-care challenge to Canada Add to ...

Canadians love to disparage America's privately funded health care, just as conservative Americans love to slag Canada's public system.

But beyond all the name calling, this much is true: Congress dedicated the better part of a year in search of a way to "bend the curve" on health-care costs. In Canada, however, the curve keeps climbing, because politicians would rather not talk about it.

"While their problem might be bigger - bigger numbers, bigger costs - we have the same problem, and we really haven't come to terms yet with how we deal with it," says Mark Stabile, a director at the University of Toronto's School of Public Policy and Governance.

As provincial governments across the country release their budgets, a grim picture is emerging of health-care costs spiralling out of control. Health-care spending now typically consumes more than 40 per cent of provincial budgets, and will account for half of all spending within a few years. Left unchecked, health care will eat up three-quarters of every dollar spent by a province 25 years from now.

Health-care spending rose on average 7.3 per cent a year in the last decade, according to a Fraser Institute report that uses Statistics Canada data.

Recent reports from the Canadian Institute for Health Information paint a picture of an aging and ailing society. Sixty-two per cent of seniors in six provinces are taking five or more prescription drugs each day. The number of Canadians with failed kidneys increased by 57 per cent between 1999 and 2008. Emergency-room visits by seniors in Ontario increased by 100,000 people a year over the past five years, to 960,000.

Health care consumes 17 per cent of America's gross domestic product, thanks to the inefficiencies of private insurance. But it now consumes 12 per cent of Canada's GDP, and while the Democrats' bill seeks to check the growth in spending, in part by targeting waste in Medicare, most provinces have no realistic plans for containing costs.

"This is something we should be addressing," believes Finn Poschmann of the C.D. Howe Institute. "The pressure on the system is going to increase as the population ages."

An agreement signed between Ottawa and the provinces in 2004 commits Ottawa to annual 6-per-cent increases in health funding until 2014. Once the deal ends, provinces will be under even greater pressure. There are only four ways to handle the problem: divert more funding from other programs, such as education, infrastructure and policing; raise taxes to pay for increased costs; cut back on health-care services; or permit parallel private care.

For any Canadian politician, the answer is "none of the above."

Canada and the United States are not alone.

"Every developed country is in the same situation," Mr. Stabile observes. "All these countries are trying to bend the back of the cost curve."

Ultimately, the provinces are responsible for their health-care system. But Ottawa remains responsible for helping pay for it.

"The conversation we need to have nationally is, 'How much are we going to spend on this?' And, 'Given that it will probably cost more tomorrow than it costs today, how are we going to pay for it all?' " Mr. Stabile says.

That's exactly the conversation that the Americans and the Congress have been having, while Canada silently looks on.

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