The Sustainability of Medicare

Hugh Mackenzie and Michael Rachlis

Canadian Federation of Nurses Unions

The facts do not support the contention that Medicare costs are increasing uncontrollably or unexpectedly. The alleged Medicare cost crisis does not exist. Medicare costs have indeed been increasing, however modestly, because of the changing age structure of our population and the failure to control certain cost drivers. However, the main problem remains the failure to fulfill Medicare’s original vision for a transformed delivery system. By contrast, many of the changes suggested are likely to create a crisis of sustainability where none previously existed. Proposed changes often include a shift in emphasis towards both private finance – through user charges, utilization taxes, restricted public insurance coverage and increased reliance on private insurance – and private, for-profit delivery within the publicly financed system. Our investigation suggests that rather than reduce costs, many of these measures would actually drive health care costs higher. More private financing would make our system less equitable than it is now. Moving away from our single-payer system would make Medicare less efficient by increasing administrative costs and making it more difficult to manage and control the very cost increases about which Medicare’s critics are so concerned.