Healthcare for an Aging Population Confronts Ontario with a $1.4 Trillion Fiscal Glacier- C.D. Howe Institute

TORONTO, Jan. 30, 2013 /CNW/ - Ontarians carry a $1.4 trillion fiscal burden - the higher tax bill for increased healthcare costs over the next half-century - and should prepare now for the coming demographic squeeze, says a report released today from the C.D. Howe Institute. In "Managing Healthcare for an Aging Population: Does the Demographic Glacier Portend a Fiscal Ice-Age in Ontario?" authors Colin Busby and William B.P. Robson recommend that Ontario prefund selected healthcare services and benchmark against other provinces to get better health bang for their tax bucks.

"Publicly funded healthcare's claim on provincial resources continues to rise in Ontario," said Colin Busby. "Our projections show the share of demographically sensitive programs, including healthcare, education and other age-based programs, rising from 14.1 percent of provincial GDP today to 23.3 percent over the next five decades. Meeting these demands from its own resources would require the province to increase its tax bite from Ontarians' incomes by 60 percent," added Busby.

The study projects Ontario's population and the impact of demographic change on government revenues and programs. Among its recommendations:

• Prefunding: finance the Ontario Drug Benefit Program similarly to the Canada Pension Plan, which converted from pay-as-you-go to a model in which a portion of premiums collected from participants today prefunds their own benefits in the future.
  
  
• Benchmarking best practices: while Ontario spends less than any other province on hospitals and has relatively low administrative costs, it spends more on drugs and physicians. "Comparing bang-for-buck in these areas with other provinces could help Ontario deliver quality care without compromising other fiscal goals, such as fair tax rates for tomorrow's working population," commented William Robson.

For the report go to: http://www.cdhowe.org/managing-the-cost-of-healthcare-for-an-aging-population-ontario/20436.

SOURCE: C.D. Howe Institute

Colin Busby, Senior Policy Analyst, or William Robson, President and CEO, C.D. Howe Institute; 1-416-865-1904; email: [email protected].