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Trump points finger at Canadian health care, but misunderstands the real danger

As Canada’s population ages, the cost of public health care threatens to severely fray the public purse strings in the coming decades.

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If Donald Trump wants to convince American voters that a Canadian-style public health system would be a "disaster" for the United States, he doesn't need to trumpet dubious claims about Canadians fleeing the system in droves to get treated in U.S. hospitals. He'd make a more compelling case talking about the rising tide of costs that threaten to eventually swamp Canada's government finances.

On Wednesday, the Fraser Institute put some fresh numbers on the U.S. presidential candidate's recent claim that Canadians flood into the United States when they need surgery, due to the "catastrophic" slowness of Canada's universal health-care system. (Mr. Trump made these claims in attacking the campaign pledge of his opponent, Hillary Clinton, to further expand the Affordable Care Act, which looks very little like Canada's health system)

The Canadian think tank's new paper estimates that nearly 46,000 Canadians had non-emergency medical treatment outside of the country in 2015. Relative to the number of patients who received treatment at home, that works out to about 1 per cent – not insignificant, but hardly a stampede, either.

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The finding is based on a survey of physician specialists, who were asked to estimate what percentage of their patients had non-emergency procedures outside of Canada in the past 12 months. The survey doesn't tell us where they got this out-of-country treatment, or why. While delays in receiving treatment in Canada is certainly one plausible explanation, it's impossible to tell how many of these patients, for example, live outside of Canada for part of the year and simply opted for something near their second home.

Before Mr. Trump started throwing stones in Canada's direction, he might have considered this. The U.S. Centers for Disease Control and Prevention estimated that about 750,000 U.S. patients travel abroad each year for medical treatment – a higher proportion of the U.S. population than the Fraser Institute's estimate of Canadians seeking treatment abroad. Some estimates put the U.S. number at more than double that. If fleeing a country to seek treatment elsewhere is evidence of the failure of a health system, then by Mr. Trump's own measure the current U.S. system is in worse shape than the Canadian alternative.

The big reason Americans look beyond their borders for medical procedures is, not surprisingly, cost. A hip replacement that would cost about $47,000 in the United States would cost about $17,000 in Mexico, and just $9,000 in India, according to an OECD study.

But when you start talking about cost, and who should pay for it, now you're getting somewhere. Because if any disaster lurks in Canada's health-care model, it isn't in wait times or outcomes (Canada's life expectancy is longer than that of the United States), it's in the rising costs.

As Canada's population ages, the cost of public health care threatens to severely fray the public purse strings in the coming decades.

The Parliamentary Budget Office's annual Fiscal Sustainability Report projected that health spending by provincial governments will rise from 7.3 per cent of gross domestic product in 2015 to about 10 per cent by 2040, and about 12.5 per cent by 2090. Beyond the next few years, it said, "population aging and escalating health-care costs [will] result in steadily deteriorating finances."

"Provinces cannot meet the challenges of population aging under current policy," the PBO concluded. The rising costs will put the provinces' debt loads on an "unsustainable" trajectory, the report warned, unless governments unlock new sources of revenue and/or cut program spending to compensate.

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Publicly funded health care is a very big and expensive promise for a government to make. Even something well short of the universal system Canada offers all its citizens would pose a substantial new financial burden for any American government.

Once a government makes that commitment, it must do so with the understanding that publicly funded health care will increasingly force it to make tough policy choices in the years to come. Other programs will have to be sacrificed, and/or taxpayers will have to pay more.

That's the discussion that promises to dominate Canadian policy-making in the coming years – and as the PBO notes, the longer governments delay in addressing it, the bigger the problem will become. If there's a lesson to be learned from Canada's experience as U.S. policy makers continue to advance health-care reform, that's the one that deserves their focus.

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About the Author
Economics Reporter

David Parkinson has been covering business and financial markets since 1990, and has been with The Globe and Mail since 2000. A Calgary native, he received a Southam Fellowship from the University of Toronto in 1999-2000, studying international political economics. More

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