“Don’t Panic: The Fiscal Sustainability of Medicare, Past and Future
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Transcript of “Don’t Panic: The Fiscal Sustainability of Medicare, Past and Future
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“Don’t Panic: The Fiscal Sustainability of Medicare, Past and Future
Robert G. Evans
Centre for Health Services and Policy Research, UBC
June 17, 2010
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First Law of Health Economics
• Every dollar of health spending is a dollar of someone’s income.
• Therefore: total health spending is necessarily identically equal to total health incomes.
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Adam Wildavsky’s Law of Medical Money
“… costs will increase to the level of available funds . . . that level must be limited to keep costs down.”
“Doing Better and Feeling Worse: The Political Pathology of Health Policy”
Daedalus Vol. 106, no.1, 1977, pp. 105–124.
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Shoppers’ Drug Mart shares (SC-TSX)
• April 7, 2010 $43.50-$44.00• April 8, 2010 $38.00
…• June 15, 2010 $34.53
• Reduction in Shoppers’ market capitalization: Roughly $2 billion
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CANADA Provincial Government Expenditure over GDP 1980/81 to 2008/09
0%
2%
4%
6%
8%
10%
12%
14%
80/81 81/82 82/83 83/84 84/85 85/86 86/87 87/88 88/89 89/90 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/090%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Total Health Medicare Other Programs Non-Program -RH scale Health/All Programs
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Canada, Provincial Government Expenditure on Medicare and on All Health Programs, as a Share ot Total Revenue, with and without Tax Cuts, 1980/81 to 2008/09
10%
15%
20%
25%
30%
35%
40%
45%
All Health Exp. over All Rev. M'care Exp. Over All Rev. All Health Exp. Over Aug. All Rev. M'care Exp. Over Aug. All Rev.
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Canada, Provincial Government Revenue, Total and Components, as percent of GDP, 1980/81 to 2008/09
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
80/81
81/82
82/83
83/84
84/85
85/86
86/87
87/88
88/89
89/90
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
All Revenues Federal Transfers Own Source Revenues Own Source Revenues plus tax cuts All Revenues plus tax cuts
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Canada, Provincial Governments, Total Revenues over Total Expenditures, 1980/81 to 2008/09
0.40
0.60
0.80
1.00
1.20
1.40
80/81
81/82
82/83
83/84
84/85
85/86
86/87
87/88
88/89
89/90
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
All Rev. /All Exp. Program Exp./All Exp. Tax Aug. Rev./All Exp.
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Canada, Health Expenditures per capita, constant $1997, 1975-2009, Selected Components
$0
$200
$400
$600
$800
$1,000
$1,200
Hospitals Oth. Inst. MDs Rx drugs
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Canada, Health Expenditures as Percent of GDP, 1975-2009, Selected Components
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Hospitals Oth. Inst. MDs Rx drugs
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Canada, Health Expenditures per capita, constant $1997, 1975-2009
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Total NHE H & MC All Prov. Gov. Total ex Rx
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Canada, Health Expenditures as Percent of GDP,1975-2009
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Total NHE H & MD" All Prov. Gov. Total ex Rx