CONTROLLING HEALTH CARE
COSTS FOR THE AGED
CAROLYN HUGHES TUOHY
OVER THE COURSE OF THE 1980s AND 1990s, GOVERNMENTS IN Canada and the U.S. adopted a number of measures directed at holding down the rate of increase in health care costs borne by the public treasury. In both countries, these measures focused primarily on controlling payments to providers rather than reducing eligibility or scope of coverage. The two countries’ rates of increase in nominal health care expenditures in both public and private sectors had paralleled each other at double-digit values in the 1980s. In the 1990s the rates of increase began to slow in both countries and both sectors. But interestingly, the pattern of change in public and private finance diverged in this period. In Canada, the rate of increase in public spending was sharply constrained. As for private finance, however, although the rate of increase declined, it more than kept pace with general inflation. In the U.S., just the reverse was true: Public expenditure was constrained less tightly than was private expenditure. Toward the end of the decade, however, both public and private spending rebounded in both countries, and rates of increase began to converge.
While the restraint measures undertaken by public payers in the 1990s had effects on the availability of health care services, they were targeted in the first instance at providers. Because health care providers—particularly physicians and hospitals—are hardly without political resources, these instances of loss imposition beg to be explained. Indeed, the health care arenas of Canada and the U.S., densely populated with interests and accounting for a substantial proportion of public budgets, provide fertile ground for an exploration of the politics of loss