Number Nine: Medicare-type spending is the best way to improve health

Again, a lot of people seem to believe this, but it just ain’t so. In fact there are many forms of spending that are far more likely to improve health outcomes than health care spending. Consider, for example, that there is a very close link between health and wealth. The wealthier you are, the more likely that your health is to be good. This implies that spending that is likely to improve the wealth creating capacity of society is also an investment in health. That means things like education, economic infrastructure, and a reasonable tax burden are all key determinants of health. So too are public health measures like sanitation, water quality, environmental protection, preventive measures such as pap smears, etc., etc.

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The irony is that as the health care budget expands in Canada, it is crowding out many of these other forms of public spending. For example, the provinces, who have responsibility in Canada for the delivery of most services, such as health care, primary, secondary and post-secondary education, roads, environmental protection, water provision, etc. have seen health rise from around 30% of provincial program spending to nearly 50%. In all provinces it is expected to exceed 50% within a decade. And Canada’s tax burden is about 8-10 percentage points of GDP higher than the United States, so that our tax burden is uncompetitive with you, our major market and major competitor, while the health care budget is cannibalizing scarce public dollars that could be spent on things much more likely to produce superior population health outcomes. But the politics of health spending is powerful, and have proven nearly irresistible to date.