Health Care Investment

As I sit here with my leg in a splint, I begin to ponder the Canadian health care system and the constant claims that health care spending constitutes an investment. {My leg is in a splint because I dislocated my kneecap (for about the 12th time). Its not bad, not even that painful any more, just annoying. But that’s a story for a different day.}

Creating a publicly funded health care system was probably one of the most intelligent things Canadian governments have ever done. The system provides coverage to the entire population and we end up spending a significantly smaller portion of GDP to get it done. (This is compared to the American private system). The current system is not perfect. There are a number of things that can be improved. The basis of the system, “universal” health care with public funding creates a problem that needs to be discussed. The basic stregnth of the system is also its greatest flaw. Health care is no longer treated as if it were scarce.

Providing health care is expensive. The expenditures for various procedures can easily run to the 10’s of thousands of dollars. If this expenditure is to be an investment, we must ask ourselves what the future benefit will be. If there is no future benefit, we’re talking about consumption, not investment.

There is one fact that brings the issue of consumption versus investment to the forefront. The average age of the Canadian population is getting older. The issue arises when we think about where health care spending goes. You tend to be the biggest user of health care when you’re very young and when you’re old. One expense can clearly be claimed to be an investment. Making sure people start out relatively healthy is a good investment. It tends to mean few medical costs in the future or at least delays those medical costs. The trick comes when we start to consider health care spending on people toward the end of their life.

Consider the following situation. A person is dying of some untreatable illness. This person is over 90 years old. They fall and break their hip, confining them to a wheelchair. Is it an investment to spend the 10 to 20 thousand dollars to give them a replacement hip? Or is it consumption? I think its consumption. I want to be clear. I’m not against this person getting a replacement hip. Heck, I’ll even chip in – granted I already do – what I’m objecting to is calling this expenditure an investment. There are ways we could think of this as an investment. The medical team gets to practise a procedure for use on other people. By creating a demand in consumption, we might be spurring some important research and development, but of course we could invest in research and development directly. The problem is that we aren’t doing it for these reasons. We’re doing because it makes us feel good. That’s consumption.

I guess the way to save the investment argument is really cynical. It is an investment from the point of view of politicians. By spending ever increasing amounts of our money on health care they earn a return of re-election.

I'm going to post something with a little more edge tomorrow. Tangentially related to the Virginia mess.