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Learn From Canada!

In the superb movie “Awakenings”, Leonard Lowe (Robert DeNiro) is woken up from his catatonic state by a drug administered by Dr. Malcolm Sayer (Robin Williams).  All goes well until Leonard starts to exhibit some side effects.  While this is happening, he insists that Dr. Sayer continue to film him, which Sayer is doing as part of the research.  We see Leonard from the perspective of the movie camera, almost yelling at it, “Learn from me!  Learn from me!”

It’s hard to watch this experiment demonstrating, in the body of Leonard, what could be a huge flaw in what otherwise appears to be a promising treatment for his illness.  It is a turning point in the story.

We are at such a turning point in another medical story, but I wonder if we’ll notice it and learn from it.

Pressured by an aging population and the need to rein in budget deficits, Canada’s provinces are taking tough measures to curb healthcare costs, a trend that could erode the principles of the popular state-funded system.

Ontario, Canada’s most populous province, kicked off a fierce battle with drug companies and pharmacies when it said earlier this year it would halve generic drug prices and eliminate “incentive fees” to generic drug manufacturers.

British Columbia is replacing block grants to hospitals with fee-for-procedure payments and Quebec has a new flat health tax and a proposal for payments on each medical visit — an idea that critics say is an illegal user fee.

And a few provinces are also experimenting with private funding for procedures such as hip, knee and cataract surgery.

It’s likely just a start as the provinces, responsible for delivering healthcare, cope with the demands of a retiring baby-boom generation. Official figures show that senior citizens will make up 25 percent of the population by 2036.

“There’s got to be some change to the status quo whether it happens in three years or 10 years,” said Derek Burleton, senior economist at Toronto-Dominion Bank.

“We can’t continually see health spending growing above and beyond the growth rate in the economy because, at some point, it means crowding out of all the other government services.

“At some stage we’re going to hit a breaking point.”

A government handout (or, really, a redistribution of wealth)  running way over budget?  (See “Stop the ACLU” for a discussion of costs in the Canadian system that the Democrats pretend they can keep at half.)  Why do we keep hearing this tune and yet be surprised when it ends exactly the same way?  Why do politicians say that this kind of system will reduce costs when…

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

The answer for Canada is cut back on benefits, which they’re seriously considering.  But that is fraught with trouble.

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?”

That’s the problem with separating the payment from the service.  It’s not absolutely free; it’s paid for with huge national taxes.  But thinking it’s free, or even just using it more knowing that you won’t be charged more, creates additional demand that the system can’t handle.

But once you’ve made that mistake, there’s no going back.

But change may come slowly. Universal healthcare is central to Canada’s national identity, and decisions are made as much on politics as economics.

“It’s an area that Canadians don’t want to see touched,” said TD’s Burleton. “Essentially it boils down the wishes of the population. But I think, from an economist’s standpoint, we point to the fact that sometimes Canadians in the short term may not realize the cost.”

These economic decisions are now even more political than they ever were, but the thought of damaging something so much identified with Canada is just unthinkable.  So Canada must either go bankrupt, reduce services, or raise taxes.  And all this from a program that was supposed to reduce costs.

This, folks, is the future of ObamaCare(tm) if it gets implemented or, worse, if the removed provisions get implemented piecemeal later on.  Canada is suffering from the experiment.  Learn from it.

Doug Payton blogs at Considerettes.

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