Health care costs

My wife, Pat, and I and an old friend in England, all within spitting distance of 80 years of age, have recently become enmeshed in our various healthcare systems. Pat has undergone knee replacement surgery. I have required a replacement of an artificial urinary sphincter necessary as the result of treatment for prostate cancer. Our UK friend has several sundry healthcare problems. All three of us have received accurate, excellent, and absolutely free healthcare, kindly provided courtesy of her Majesty’s governments in Canada and the United Kingdom. The actual cost of this care is unknown to me, but all up must have come to close to $200,000 Canadian. It entailed hospital admissions, surgery, preoperative assessments and follow-up care, imaging of one sort and another, laboratory investigations, anaesthesia and home care. All for nothing!

Press reports from those countries in the world that provide free healthcare: Canada, UK, Australia, New Zealand and most of the European Union  all tell stories of their systems being under great strain. The expectation of life in the developed world is approaching ninety years for women and eighty-five plus for men. People are living longer and thereby getting time to contract more and more complicated medical conditions. The treatment for them becomes ever more sophisticated and expensive. Demographic forecasts show that these trends are likely to increase. The funding arrangements for health care in the countries listed vary but generally speaking rely on taxation of one sort or another. Family size in the same countries is shrinking. Consequently, there are fewer and fewer active members of the workforce paying taxes to support more and more elderly persons consuming expensive healthcare but paying no taxes. This trend is also steadily increasing.

In the United Kingdom, it is possible to game the system. One can see the chosen specialist in private rooms for a fee of about £100. The specialist is then able to put you on  his or her National Health Service waiting list in a preferential position thereby shortening the time before admission. In Australia, a smaller parallel private system exists as a form of medical insurance. Those that are dealt with privately get things done much more rapidly. Those obliged to deal solely with the public system face very long waiting times. In Canada, neither of these routes is available for they are deemed to be contrary to federal law.

There are regular  reports emerging from the United Kingdom about longer waiting lists for surgery, longer waits in emergency departments, beds being blocked by elderly persons, who have recovered from  their latest medical adventure and who cannot find room in nursing homes, desperate shortages of nurses and junior medical personnel, ward closures due to staff shortages et cetera, et cetera. At the same time, there are announcements about new, exciting and revolutionary medical advances, all of which come with a hefty price tag. The situation, to my personal knowledge, in Canada and Australia mirrors that in the United Kingdom.

Something has got to give. When asked, Brits, Canadians and Australians value their healthcare systems very highly. One could go so far as to say that free  healthcare is regarded by them all as the best thing that governments provide. Patiently, all of these single provider schemes are rapidly running out of money and politicians are hard pressed to fund them adequately. Electoral cycles are brief and that makes long-term planning very difficult, for the greatest single preoccupation of elected representatives is re-election. That is very hard to achieve when they have just endorsed substantial tax hikes shortly before an election. 'Short termism’ reigns supreme and healthcare systems are patched up but never truly fixed.

Spending on healthcare in the UK and similar countries as a proportion of gross national product is very similar and around eight to ten per cent. Incidentally, it is close to double that in the United States where the very idea of universal government provided health care is regarded as anathema  President Obama introduced measures to reduce the very large numbers of persons who had no health cover at all, which measures are being comprehensively dismantled by his successor. The proportion of national income consumed by healthcare in those countries that have a single government provider and those that do not has remained remarkably constant during the past many decades. However, demand for service, increasing sophistication of diagnosis and treatment and demographic change will force governments and individuals to pay a great deal more than they presently do. Where will this money come from?

From time to time, cash strapped governments float the idea of taking money from the estates of the deceased. Opponents to this idea characterise it as the imposition of a death tax. Electorates, in general, dislike the notion for it runs counter to their desires to hand on substantial nest eggs to their descendants. Such aims are understandable but should not get in the way of thorough examination of the principle.  The average member of the middle classes in the developed world is likely to die in full possession of the family home. This may well have been purchased 30 or 40 years before death for a relatively trivial sum.  In much of the developed world, inflation has seen the value of dwellings rise by factors of more than ten.  In the United Kingdom, houses purchased in the 1970s and '80s for thirty or forty thousand pounds,  now change hands from anything between half a million and one million  pounds. Such increases have occurred quite adventitiously and without any effort on the part of the owners.It is also known that we consume a greater and greater fraction of our total lifetime health care expenditure during the last few years of our lives. As we live on, the amounts spent on keeping us going rises such that the graph tends to the vertical. At the same time, the amount that we pay in taxes declines. Has the time arrived when the moment that we retire heralds the switching on of the ‘taxicab meter ‘? In other words, the actual cost of our healthcare is computed, as it is consumed, and the bill presented to our estates before probate is granted? House owners will complain that the  'death tax’ singles them out unfairly and those who have never bothered to purchase their own dwelling or have been unable to do so would benefit. Such people, in general, have lower educational qualifications than those that have taken the trouble to buy houses and are also likely to have poorer health and live shorter lives and so consume less overall lifetime care.   

Has the time arrived for us all to face other difficult choices: does it make sense to spend thousands of dollars on a new drug that may or may not keep a cancer sufferer alive for a few more weeks? Does it make sense to spend large sums of money on neonatal intensive care to steer a very premature baby - say twenty-three weeks gestation time - to infancy knowing that the child faces an 80% chance of living with a severe mental or physical handicap for the rest of its life?  Is it reasonable to provide heavy smokers, heavy drinkers and the obese with a full range of healthcare knowing well that the outcomes for such patients are less than ideal? Already, in the United Kingdom, this question is already being considered. Has the time come to make much greater use of physician assistants, nurse practitioners, pharmacists and optometrists in the delivery of primary care? Is it sensible to devote ten to fifteen years training to an ophthalmic or  orthopaedic surgeon, who then goes on to do little more than remove cataracts or perform joint replacements? This leads to an even more difficult question about the way in which doctors are trained. Regardless of what branch of medicine they enter, they all go down the same pathway for many years before branching out and that has been so for the last century and a half. Such questions are all very challenging and many would think that merely posing them is somehow callous and immoral. Perhaps those that think in that way are able to overlook the fact that most Western countries have two to three physicians per one thousand head of population, roughly ten times the ratio that obtains in most of the undeveloped world. The £40,000 spent on an experimental cancer drug to keep an English, Canadian or Australian patient alive for an extra few weeks would  pay for a very large amount of electrolyte balanced fluid that could save the lives of literally thousands of dehydrated infants in Somalia or northern Nigeria, for example.

However, unless some other schemes can be devised, taxes on those currently working must increase drastically or the amounts spent on other governmental activities such as defence, education, infrastructure or what you will must be slashed. It is also worth remembering that demographers forecast something like 40% of today’s jobs will disappear from the wholesale adoption of robots and artificial intelligence. Robots don’t pay taxes! It is a cliché, I know, but there is no free lunch:  healthcare is very expensive and likely to become more so. The money has to come from somewhere. I hate to say this but perhaps Mrs. Thatcher, British Prime Minister between 1979 and 1990, was right when she opined "The problem with socialism (e.g. free health care) is that you eventually run out of other people's money.”  Our American cousins obviously think so.

Comments, please

David Amies,


March 15 2017