Fraser Forum

Alberta should look to France, Germany and Australia to improve its health-care system

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The office of the auditor general of Alberta recently delivered a report on the province’s expensive but underperforming health-care system. During an interview, the auditor general (Merwan Saher) rhetorically asked reporters “You are paying for the best, so why would you not demand the best?”

While the report Better Healthcare For Albertans explored a number of important aspects of the province’s health-care system worthy of consideration for improvement, its focus on moving towards more integrated care, tweaks to physician compensation, and improved clinical information systems may not bring about the transformative change its authors hope for.

The problem with Alberta’s health-care system, like Canada more generally, is that it costs a lot of money but doesn’t deliver enough services to meet demand. As a result of this imbalance, the government has to ration services to patients who are forced to wait for treatment. In 2016, patients in the province could expect to wait 22.9 weeks between getting a referral from their family doctor and finally receiving medically necessary care. That’s about three weeks longer than the Canadian average.

Some may posit that the long wait times for care in Alberta mean that the province isn’t spending enough money on health care. But the data suggests a lack of funds is not the problem. In fact, Alberta spends more money per person than almost all other provinces on health care and still has waits that exceed the national average. Spending on health care in Alberta also increased almost twice as quickly as the provincial economy grew over the last 15 years. Unfortunately, so did wait times. The 22.9-week wait recorded last year was about five weeks longer than the wait patients had to endure 15 years ago.

While long wait times despite high levels of spending may be particularly galling in Alberta, the country as a whole suffers from the same syndrome. Although Canada is no slacker in terms of spending (either per capita, or as a proportion of its GDP), comparisons with other successful universal health-care systems around the world routinely indicate it has fewer medical resources, and performs abysmally on indicators of timely access to health care.

For example, the Commonwealth Fund’s most recent report found that Canada tied for last place in terms of ability to get a same or next-day appointment when sick. Canada also finished dead last when it came to wait times for treatment in emergency rooms, waits to see specialists, and overall waits for elective surgery.

So, if spending is not the problem—a fact that is also acknowledged by auditor general’s report—then what is?

The report points mostly towards a lack of integrated care, physician payment incentives and clinical information systems. While improvements in these areas may help the system at the margin, they are unlikely to fundamentally transform the performance of Canada’s health-care system because none of them fully address the uncommon and harmful characteristics of our system that are ultimately responsible for long wait times and weak overall performance.

For example, unlike Canada, most other universal health-care systems that spend about the same as we do but perform better in terms of patient access generally embrace the private sector for the financing and delivery of core medical services—either as a partner to increase capacity, or as a pressure valve helping reduce the strain on the public system. Patients are often free to choose from a diversity of providers—including private for-profit facilities. In fact, in countries such as Australia, France and Germany, as much as a third of hospitals are for-profit facilities that are an integral part of the universal health-care system.

Patients are also generally expected to share in the cost of treatment, helping temper demand. And such payments are never a financial burden due to the use of annual limits and exemptions for vulnerable populations. Finally, other more successful universal health-care systems also generally fund hospitals on the basis of activity—incentivizing them to provide treatment and compete for patients.

Canada, on the other hand, relies mostly on centrally determined “global budgets” that don’t incentivize productivity gains or quality improvements.

The combination of these three policies is routinely found in countries that outperform Canada without necessarily spending more. Without their inclusion, any policy discussion aimed at improving the health-care system in Alberta, or any Canadian province, remains incomplete.