SASKATOON - A former Saskatchewan NDP finance minister says it's time for a fundamental restructuring of the health system and that includes having patients cough up cash for care.

Janice MacKinnon makes the comment in a study commissioned by the Macdonald-Laurier Institute, an Ottawa-based think-tank.

The study says baby boomers will need more health care services as they age, but at a time when many will be retiring, leaving fewer wage earners to pay for a system of open-ended demand.

MacKinnon said that means the burden will fall on young people, who would face higher taxes to pay the bill.

"If you look at the economic projections, you're not going to be able to sustain the current system without more money," she said Thursday.

"But if you link some of it to use of the system, then the baby boomers who will be using the system more will be paying more, and I think it's fair and it's more effective to do it that way."

MacKinnon rejects the idea of user fees, saying they could discourage people from seeking care.

She said the best way to pay for the costs would be to use the income-tax system with a ceiling at three per cent of income. Lower income people could be exempted.

MacKinnon, who served under former premier Roy Romanow, is now a professor of fiscal policy at the University of Saskatchewan.

She said health costs are rising faster than government revenues and are crowding out spending on other programs, such as education.

She suggested a health overhaul should also include more use of private clinics, home care, long-term and chronic care facilities.

MacKinnon said hospitals are the most expensive place to do any service.

The study estimates the average daily cost of a hospital bed to be $842, while the average daily cost of a long-term care bed is $126 and home-care costs about $42 a day.

"What should be happening is people should be diverted from the hospitals over to long-term care facilities," she said.

"But you need more of them, you have to build more, and part of the problem is the incentives in the system are wrong. It's free to stay in the hospital, but you end up paying part of the long-term care facility. Hence, my argument that you should take part of the cost of health care right directly from the services used because then there wouldn't be any incentive to just stay in the hospital."

The study also says provinces should bulk-buy prescription drugs to save money and not compete against each other by giving big wage increases to doctors, nurses and other health workers.

It's not the first time MacKinnon has taken a shot at health reform.

In 2004, she did a study for the Institute for Research on Public Policy which said Canadians should be required to pay for health care in proportion to how much they use the system, with tax breaks for good lifestyle choices.

MacKinnon says the latest study is about the need for more comprehensive change.

"I'm saying you've got to deal with the whole package of the problem."

—By Jennifer Graham in Regina

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