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Wednesday, September 19, 2007

Will the aging population bankrupt medicare? No, it won't

Japan's aging population is beginning to put a strain on the country's healthcare system, . There, seniors' care now accounts for 40% of all health spending. And the trend is projected to continue: as the world's longest-living people, 40% of Japanese will be 65 or older by 2055.

Japan's elderly health costs crisis appears to be the real thing -- unlike the one allegedly underway in Canada, (PDF).

Marc Lee, the author of the report, :

"There's a notion in the public that as the baby-boom generation recedes into retirement years, this is going to push health-care costs over the cliff, but it's not true."
The study concludes that the effect of aging on healthcare costs will be no greater than a 1% increase in spending per year over the next 40 years. That amount is easily manageable, Dr Lee says. The nominal growth of the Canadian economy has been 5.4% per year over the past 20 years, and Dr Lee predicts that the current state of the healthcare system can be maintained with increased spending of about 4.4%.

The CCPA study may sound a bit unbelievable given the excited protests of Canadian governments citing the "unsustainability" of the current system and the need to supplement it with public-private partnerships/user fees/private insurers/increased private delivery of care/all of the above. But the logical conclusion, based on the results of the CCPA study, is to realize that governments have been dishonest in their assessments.

In fact, a 2005 CIHI study found nearly the same result as the new CCPA report. I wrote about that in February in relation to British Columbia's projection of out-of-control health spending in the future, when I asked "" (Hence the Chicken Little illustration above.)

Canadian Medicine when a UBC economist named Robert Evans published a working paper that similarly debunked BC's desperate claims.

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