Monday, May 31, 2010

No More Free Lunch

[Welcome National Review readers!]

Imagine a world where there are copay's and other cost sharing for health care. Go to a doctor, pay a fee. Get a prescription filled, pay a fee. Have an X-ray, pay a fee. Need something major like a new hip or cataract surgery, use a health insurance plan to pay for it.

Pretty far-fetched, right?

This is a system our neighbors to the north may find in the not too distant future. Because of an aging population and budget deficits, the Canadian provinces are considering copay's and allowing private insurance for major procedures.

Healthcare in Canada is delivered through a publicly funded system, which covers all "medically necessary" hospital and physician care and curbs the role of private medicine. It ate up about 40 percent of provincial budgets, or some C$183 billion ($174 billion) last year.

Spending has been rising 6 percent a year under a deal that added C$41.3 billion of federal funding over 10 years.

Perhaps they need to ask Obama how he was able to expand health care for everyone and not add one dime to the deficit.

Other problems include trying to control independently set salaries for top hospital executives and doctors and rein in spiraling costs for new medical technologies and drugs.

Ontario says healthcare could eat up 70 percent of its budget in 12 years, if all these costs are left unchecked.

Now that's a novel idea. Control health care costs by limiting the salaries of health care providers.

Scotia Capital's Webb said one cost-saving idea may be to make patients aware of how much it costs each time they visit a healthcare professional. "(The public) will use the services more wisely if they know how much it's costing," she said.

"If it's absolutely free with no information on the cost and the information of an alternative that would be have been more practical, then how can we expect the public to wisely use the service?"

So when health care is free there is no incentive to keep utilization in check.

Are the folks in DC paying attention?

I doubt it.
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