Baby boomers should pay more for health care, study says

Janice MacKinnon, a former Saskatchewan NDP cabinet minister, is calling for a fundamental restructuring of the country's health system, including a new payment structure.
Former Saskatchewan NDP cabinet minister Janice MacKinnon says baby boomers should pay more for their care as they age. (Macdonald-Laurier Institute)

Janice MacKinnon, a former Saskatchewan NDP cabinet minister, is calling for a fundamental restructuring of the country's health system, including a new payment structure.

"[T]he time has come for a co-payment system to be introduced," MacKinnon said as a new health care study was unveiled. "Users of the health care system would pay for part of the services they receive instead of governments continuing to fund all costs exclusively with general tax revenues."

MacKinnon's study was commissioned by the Macdonald-Laurier Institute, an Ottawa-based think-tank.

The study says baby boomers will need more health care services as they age. However, since many will be retiring there will be fewer wage earners around to pay.

MacKinnon said that means the burden will fall on young people, who would face higher taxes to pay the bill.

"If you look at the economic projections, you're not going to be able to sustain the current system without more money," she said. "But if you link some of it to use of the system, then the baby boomers who will be using the system more will be paying more, and I think it's fair and it's more effective to do it that way."

MacKinnon still rejects the idea of user fees, observing they could discourage people from seeking care.

Instead, she said the best way to pay for the costs would be to use the income-tax system. Lower income people could be exempted.

She said an individual would receive an annual statement of the cost of health care services they received. It would be reported on their income tax returns.

MacKinnon, who served under former Saskatchewan premier Roy Romanow, is now a professor of fiscal policy at the University of Saskatchewan.

She said health costs are rising faster than government revenues and are crowding out spending on other programs, such as education.

Move patients out of hospitals

She suggested a health overhaul should also include more use of private clinics, home care, long-term and chronic care facilities.

MacKinnon said hospitals are the most expensive place to do any service.

The study estimates the average daily cost of a hospital bed to be $842, while the average daily cost of a long-term care bed is $126 and home-care costs about $42 a day.

"People should be diverted from the hospitals over to long-term care facilities," she said. "The problem is the incentives in the system are wrong. It's free to stay in the hospital, but you end up paying part of the long-term care facility."

MacKinnon said her study is about the need for comprehensive change.

"I'm saying you've got to deal with the whole package of the problem."