Canadian health care: Follow the leader

The provinces crack down on prescription-drug spending. AS AMERICA debated health-care reform last year, many advocates of universal coverage looked approvingly at Canada, which spends less per head on medical care than the United States does and has a longer life expectancy. Yet this pillar of Canada’s national identity is now creaking under the burden of cost. Health spending, which is administered by the provinces, has increased from nearly 35% of their budgets in 1999 to 46% today. In Ontario, the most populous province, it is set to reach 80% by 2030, leaving pennies for everything else the government does, not counting tax increases or new federal transfers. The biggest culprit is prescription drugs, which have seen their share of public-health spending triple since 1980. Cash-strapped provincial premiers are starting to focus on medicine costs—prompting fierce resistance from the drugs industry. Read the complete article in The Economist here.

The Feckless Fed

Ben Bernanke knows the dangers of deflation. So why isn’t the Fed using its tools to head it off? Read Krugman's column in the NYTimes here.