Premium hike seen as essential to pay for rising cost of services

Patients and health care providers, such as nurses and doctors, will feel a double pinch stemming from Tuesday’s provincial health budget, which will see health insurance premiums increase while health- sector capital funding is set to drop.

Additionally, the relatively austere financial plan extends the wage freeze health care workers have faced for the past two years. Finance minister Kevin Falcon was unequivocal when he told a briefing for journalists there’s “no money in place for additional wages, in case anyone had any doubt about that.”

Medical Services Plan premiums will increase by about four per cent on Jan. 1, 2013. Quebec is the only province besides B. C. to charge health care premiums. At current rates, individual British Columbians pay monthly premiums of $ 64, a couple pays $ 116 and the family rate is $ 128. With the hike, that will increase in 2013 to $ 66.50, $ 120.50 and $ 133.

About 50 per cent of MSP premiums are paid by employers.

Falcon said 800,000 lowincome B. C. residents pay no premiums, while many others are subsidized. No one likes premium increases, Falcon said, but they serve as a reminder that “we have a very good health care system but it’s expensive.”

In 2012- 2013 MSP premium increases will add an additional $ 22 million to revenues and another $ 87 million in 2013- 2014, bringing total premiums raised to more than $ 2 billion in each fiscal year. That revenue only goes so far in B. C.’ s $ 16- billion health care enterprise.

Falcon was clear historical spending by the Ministry of Health must be reined in; indeed, annual increases will be limited to 3.2 per cent from 2012 to 2015. Average annual spending increases from fiscal 2005 to 2009 were seven per cent, and then limited to 4.8 per cent from 2009 to 2012.

“Budget 2012 marks a turning point,” Falcon said bluntly. “This is a very important reality for government.” Falcon said his goal going forward is to start “bending the cost curve down.”

Even with a cost- containment approach that will see average additional spending of $ 500 million a year over the next three years, the total spending on health care by the province as a whole will reach $ 19.1 billion by 2014- 15. That represents 42.2 per cent of all government expenses.

“We just can’t keep pouring more and more dollars in. We have to find creative ways to minimize expenses, and we are,” he added.

Although, apart from $ 200 million in projected savings through consolidation of services like laundry, purchasing and information technology, the budget doesn’t shed much light on further cost- saving innovations.

Falcon said a focus on prevention programs will reduce incidence of expensive- to- treat chronic illnesses like cardiovascular disease and diabetes, while a greater emphasis on healthy living should help curb demand on health services. Even though B. C.’ s per- capita spending of $ 3,604 is already the second lowest in Canada ( after Quebec), Falcon justified his conviction to rein in spending, noting B. C. boasts “the nation’s highest life expectancy [ of 81.4 years], the lowest death rate from cancer [ 147.4 per 100,000] and the second- lowest death rate [ after Quebec] from heart disease.”

It is clear the government has neither ambition nor appetite for big, new hospital construction projects. From 2005 to 2015, the projected average decline in health- sector capital funding will be 2.3 per cent.