The Wrong Health-Care Model

Population mix comes next, for health-care demand is highly dependent on the demographic profile of the served population. In the United States, it is estimated that the 12 per cent of the population that is elderly accounts for well over 50 per cent of health-care consumption; an increase of 1 percentage point in the 65-and-older population can raise health-care costs by 4.4 per cent. The U.S. cohort of 65-plus, which is 1.2 per cent larger (proportionately) than the Canadian, accounts for a full 5.3 per cent of U.S. health-care costs. In other words, were the Canadian system required to care for a population demographically equivalent to the U.S. population, it would face a 5.3 per cent increase in its health-care costs. This adjustment adds a further 0.5 points to the percentage-of-GNP figure.

Finally, if Canada were to spend the same proportion of total health-care costs on R&D as the U.S., it would face a 2.4 per cent overall increase in costs, and a resulting 0.2-point increase in health care’s percentage of GNP.

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Population mix comes next, for health-care demand is highly dependent on the demographic profile of the served population. In the United States, it is estimated that the 12 per cent of the population that is elderly accounts for well over 50 per cent of health-care consumption; an increase of 1 percentage point in the 65-and-older population can raise health-care costs by 4.4 per cent. The U.S. cohort of 65-plus, which is 1.2 per cent larger (proportionately) than the Canadian, accounts for a full 5.3 per cent of U.S. health-care costs. In other words, were the Canadian system required to care for a population demographically equivalent to the U.S. population, it would face a 5.3 per cent increase in its health-care costs. This adjustment adds a further 0.5 points to the percentage-of-GNP figure.

Finally, if Canada were to spend the same proportion of total health-care costs on R&D as the U.S., it would face a 2.4 per cent overall increase in costs, and a resulting 0.2-point increase in health care’s percentage of GNP.