Pay deductions could stem health-care costs: analyst
P.E.I.'s health-care administration costs 3 times national average
The P.E.I. government should establish a payroll-deduction type of fund to tackle the anticipated boom in health-care costs, says a Toronto-based think-tank.
The C.D. Howe Institute's new report estimates the province would have to put $14 billion in a bank account today, if it's going to maintain current services over the next 50 years.
That works out to around $99,000 per Islander.
P.E.I.'s health-care administration costs are three times the national average, based on 2010 numbers — or $141 per person, versus a national average of $47 per person.
"Perhaps Islanders get appropriately greater coordination of their care thanks to the higher administrative costs than other provinces. But absent a good explanation or calculation from the payoffs of these extra administrative costs in P.E.I., it might seem reasonable to help squeeze them to help shift dollars to areas where they might do more good," said senior policy analyst, Colin Busby.
P.E.I. could mandate a payroll-deduction scheme like Employment Insurance or the Canada Pension Plan, said Busby.
"It's something that we could perhaps apply to a portion of health-care spending. Let's say drugs or long-term care, where there's a very close attachment with age. You know, it would give us a way of helping smooth out the tax burden so that future generations of workers won't face an onerous tax bill from those higher future health costs."
People could apply for these funds, or money could be sent each month so people could spend it however they see fit, said Busby.
The fund would be administered independently, like CPP, not by government, he said.
Health PEI said these figures are based on data from provincial public accounts, which are not always accurate in terms of actual spending.
Still, CD Howe said there is enough discrepancy in the numbers to raise questions about Health PEI's administrative expenditures.