Canada's medicare is financially unsustainable, Fraser claims.

Public health insurance in Canada is financially unsustainable, Vancouver's Fraser Institute concludes in its annual review of spending on health care. The study, Paying More, Getting Less 2006: Measuring the Sustainability of Public Health Insurance in Canada, projects health expenditures will rise to more than 50% of public spending in some provinces by 2016.

To slow rising costs, the conservative think-tank proposes these measures:

* require co-payments for publicly insured health services;

* permit patients to pay privately for all types of medical services, including hospitals and physician services;

* allow providers to charge extra fees above the public health insurance payment level;

* permit both for-profit and non-profit health providers to compete for the delivery of publicly insured health services.

According to this year's report, public spending will reach the 50% mark in Manitoba and Saskatchewan by 2016, Alberta by 2017, and British Columbia and Prince Edward Island by 2019. Because of equalization transfers from Ontario and Alberta, Nova Scotia, New Brunswick, Newfoundland. and Quebec will reach the 50% level at later dates. In previous reports, the conservative think-tank predicted that health care expenditures of most provinces would reach the 50% mark by 2035. However, the report suggests that the rising health care costs could bankrupt the provinces by 2060.

Paul Moist, President of the Canadian Union of Public Employees, challenges the Fraser Institute projections. He claims the extrapolations are based on the previous five years expenditures. These were not typical years because "after years of neglect, federal and provincial governments have re-invested substantially in health care over the past decade."

Moist also points out that the Fraser report does not confront the fastest growing component of health care: the rising costs of drugs.

The Fraser report was prepared by Brett Skinner, the Institute's Director of Health Research.

www.fraserinstitute.ca