Fraser Forum

Canadian health-care fix—innovation, not more money

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Researchers have long noted that while Canada ranks among the most expensive universal health-care systems in the developed world, it has fewer medical resources (physicians, beds, diagnostic scanners) on average, a mixed track record on outcomes, and some of the longest wait times for medically necessary treatment.

These realities have often been either ignored or denied by politicians who sometimes face incentives to perpetuate the myth that Canada’s is the best universal health-care system in the world.

So it was refreshing to hear federal Health Minister Jane Philpott acknowledge in a recent speech to the Canadian Medical Association that Canada’s health-care system is in desperate need of repair and that more money isn’t the answer. The minister also provided some examples of countries that outperform Canada on a number of indicators, but which do “universal health care” differently.

The minister’s acknowledgement that more money (through the Canada Health Transfer, or CHT) is not the answer also marks a bold move away from the promises of arbitrarily-determined, and unsustainable, annual increases in federal funding that we saw in the 2000s.

Unlike many of her predecessors, Philpott has signalled that innovation and not more taxpayer funding is key to improving our health care system. So what kind of innovation is needed, and what’s preventing it from taking place?

One major reason for a lack of meaningful innovation through policy reform has to do with the Canada Health Act (CHA).

Although health care is a matter of provincial jurisdiction, the CHA sets the terms and conditions that provinces must fulfill in order to receive a full cash transfer from the federal government. Some of its criteria—like universality—do not significantly intrude on what provincial governments would anyway likely abide by on their own. However, other aspects of the act can be used to discourage provinces from employing policies that are routinely found in Australia, the United Kingdom, France and Germany—the very countries the minister pointed to as potential models for reform.

Specifically, each of these countries embraces the private sector as either a partner or an alternative for the insurance and delivery of medical services. Further, Australia, France and Germany expect patients to share in the cost of treatment (with annual caps, and exemptions) in order to encourage them to make more informed decisions about the use of costly medical resources. Notably, all four of these countries outperform Canada on measures of wait times for medically necessary treatment.

If the federal government is truly interested in promoting meaningful beneficial innovation it could relax the CHA and give the provinces more latitude to pursue policy reform.

Minister Philpott’s recent statements were refreshingly honest about the state of Canadian health care and the need for policy innovation. What remains to be seen is whether the minister will be bold enough to allow provinces to introduce the sorts of policies long-ago adopted by the very countries she pointed to as potential models for reform.


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