Better Health Care or Financial Folly?

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Appeared in the New Brunswick telegraph Journal and Calgary Beacon

When it comes to health care, all three of Canada’s major federal political parties are drinking the same Kool-Aid. All three say they will maintain the six per cent annual increases to health care transfer payments to the provinces past 2014. But does it not seem odd they want to spend more money on a problem that has little to do with how much we spend, especially at a time when Ottawa can ill afford it?

The reality is that Canada’s health care system is already one of the most expensive universal access health care programs in the developed world. On an age-adjusted basis (older people require more care) in the most recent year for which comparable data are available, only Iceland spent more on their universal access health insurance system than Canada as a share of GDP, while Switzerland spent as much as Canada. The other 25 developed nations who maintain universal health insurance programs spent less than we did; as much as 38 per cent less as a percentage of GDP in the case of Japan.

Yet, despite this very high level of spending, Canadians endure poor access to physicians, poor access to modern and advanced medical technologies (many of which are old and outdated), and some of the longest waiting lists for medical care in the developed world.

The real problem in Canada is not a lack of funds or inadequate transfers from the federal government. It is our inability to put the already generous financial resources to good use. That stems from a lack of policy freedom for Canada’s provinces which has contributed to poor health care policy at the provincial level.

All of the top-performing universal access health insurance programs in the developed world, be they programs that outperform others in outcomes from the health care process (such as Sweden, Australia, Switzerland, and Japan) or programs that deliver universal access to care without waiting lists (such as Switzerland, Japan, France, and Germany), subscribe to the same set of health care policies. Every one of these nations has cost sharing for universally insured services, private hospitals delivering universally accessible/publicly funded care, and a private parallel health care (financing and delivery) sector.

Yet none of Canada’s three main political parties mentioned the possibility of adopting, let alone even studying, these sensible and successful health care policies. More importantly, they also made no mention of removing the strings attached to health care transfers by Ottawa so that provinces could be free to choose for themselves how best to organize health care. It seems, the six per cent commitment will come with the usual strings attached, leaving Canadians with more costs, yet the same results from a failing system.

The policy restrictions Ottawa attaches to health care transfers can in part be found in the Canada Health Act. The Act, whose principal purpose is to set out the rules under which Ottawa will make cash transfers in support of health and social services to the provinces, specifically prohibits user fees or cost sharing for universally accessible services. Provinces that implement cost sharing, a policy that is employed in all of the developed world’s top performing universal access health care systems, put their health and social transfers from Ottawa at risk.

Ottawa has also repeatedly committed to disallowing a private parallel health insurance system in Canada. While the constitution clarifies that such a policy decision is for the provinces to make, Ottawa’s sizable cash transfers to the provinces no doubt play an important role in provincial policy making.

The only policy common among top-performing universal access health care systems not disallowed by the federal government is private competitive provision of hospital services. Put differently, provinces are free to follow the lead of countries like Sweden and allow private hospitals to deliver health care under the terms of the public insurance program.

Clearly, the federal government has restricted the provinces’ ability to positively reform health care. The international experience and economic literature show that these policy restrictions have been to the detriment of both Canadians in need of health care and taxpayers who fund health care services.

What Canadians need from their major federal parties is a commitment to reforming the Canada Health Act to require universality and portability and to leave the details of how the universal health care insurance program is to be structured to the provincial governments. Such a revision to the Canada Health Act leaves intact the noble goals of Medicare but allows choices over health care policy to be made by governments that are much closer to the populations the health care system serves and recognizes that Canada’s 10 provinces often deal with very different realities.

Canadians are poorly served by commitments to shovel large sums of money at the health care system without any substantial change to the way health care is organized in this country. They would be far better served by commitments to allow the provinces greater flexibility to implement sensible health care reforms and the freedom to depart from our current failing health care policies, many of which are mandated by Ottawa.

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