How to Head Off Alberta's $615 billion Healthcare Challenge - C.D. Howe Institute

TORONTO, Jan. 23, 2013 /CNW/ - Albertans carry a $615 billion 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: How Alberta Can Confront its Coming Fiscal Challenge," authors Colin Busby and William B.P. Robson recommend that Alberta  prefund selected healthcare services, and find cost savings and efficiencies by benchmarking against other provinces that get better bang for their bucks in some areas.

"Our projections show the share of demographically sensitive programs, including healthcare, education and other age-based programs, rising from 11.3 percent of provincial GDP today to 21.4 percent in 50 years' time, said Colin Busby. Meeting these demands from its own resources would require the Alberta government to almost double the share of provincial income it collects," added Busby.

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

• Prefunding: finance some healthcare services 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 Alberta spends less on institutions such as nursing homes and residential care facilities, it spends more on physicians than other provinces, and has the highest per capita spend on hospitals. "The differences are large: in the case of hospitals, bringing costs into line with the national average would save the province some $2 billion," commented William Robson. "Comparing bang-for-buck in these areas could help Alberta ensure that demographic change does not put healthcare on a collision course with other fiscal priorities," he said.

For the report go to: http://www.cdhowe.org/managing-the-cost-of-healthcare-for-an-aging-population-alberta/20169

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].