Fraser Forum

Alberta health minister’s proposal ignores fundamental problem with Canadian health care

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Last week, the Hon. Sarah Hoffman, Alberta’s minister of health, got it right when she said “[w]e simply cannot continue increasing spending on health care in this province the way we have done in the past.” However, her proposed solution—to change the way physicians are paid in the province from a fee-for-service basis to some alternative model—is a classic case of grasping at straws while ignoring the real problem with Canadian health care.

First, let’s acknowledge some basic statistics. In 2013 (the latest year of available comparable data) Alberta did, indeed, report that fee-for-service payments constituted a largerinical payment proportion (86 per cent) of total cls to physicians than any other province (about 15 percentage points above the Canadian average). Its government also spent the second highest amount ($4,619) on health-care services on a per capita basis, and its wait times were nothing to write home about (23 weeks; GP to treatment).

On the other end of the spectrum, in the same year Nova Scotia reported the highest proportion of total clinical payments to physicians (50 per cent) through other methods (the majority using what is defined by the CIHI as “block funding”). It did indeed spend a few hundred dollars less per capita ($4,131) than Alberta, but forced its patients to wait a few weeks more than Alberta did (26 weeks; GP to treatment).

What can we draw from this comparison? The truth is—not much.

The problem of a high-cost low-performance system is not just a provincial one—but a Canadian one.

The lack of a robust private-parallel sector to serve the unmet health-care demands of patients means that the government is obligated to either try and supply enough services through the public system (which, if it’s even possible, will require higher spending) or justify the long wait times that patients will inevitably endure.

At the same time, the lack of user-fees and co-payments means that individuals face no financial incentive to use the public system judiciously.

In fact, using a fee-for-service payment mechanism to incentivize physicians to provide treatment is perhaps the one thing Canadian health care gets right. Paying physicians according to the number and complexity of services they provide encourages them, in simple terms, to focus on the quantity, and possibly, the quality of care provided. While there is a theoretical concern that they may provide more services than required, the long wait times that patients are forced to endure combined with relatively lower rates of surgery compared to other developed countries suggests that Canada’s health-care system actually isn’t even close to providing enough services to meet demand.

Importantly, moving to alternative methods of payment may control costs for the government, but may also risk longer wait times or reduced access for patients.

If the Minister Hoffman is truly interested in improving the efficiency of the health-care system and returning the government to a more fiscally sustainable path, she should seize this opportunity to implement meaningful reform. Alberta, and Canada more generally, should follow the examples of other successful universal health-care systems by employing limited user-fees to encourage responsible use of the public health-care system, and allowing patients access to a private alternative. Doing so is in the best interest of government, taxpayers, and most importantly, patients.


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