Fraser Forum

Lack of funding not the source of Canada’s health-care ills

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Canada’s premiers are meeting in Whitehorse, Yukon this week and media reports suggest that health-care transfers from Ottawa may be high on the agenda, particularly as changes to the transfer formula are set to kick in next year. For instance, on this issue, newly-minted Manitoba premier Brian Pallister said: “…we need a partner in Ottawa that is not backing away from its obligations, and that is I think what the premiers are encouraging to happen now.”

We’ve seen this script before. Back in 2004, the federal-provincial health accord was heralded as a landmark agreement that would solve many of the wait times issues plaguing Canada’s health-care system. In retrospect, it achieved very little and was very expensive to boot.

The 2004 health accord essentially just specified that the Canada Health Transfer (CHT), the major federal funding transfer to the provinces for health care, would grow at six per cent annually for 10 years until 2014.

During this period, annual health transfers increased from $19 billion in 2005/06 to $32.1 billion in 2014/15. And yet, despite significantly increased federal transfers, the 2004 health accord did little, if anything, to reduce Canada’s national wait times.

The Health Council of Canada itself noted that “wait time benchmarks are not yet fully met in most of the priority areas" and that "[o]verall, the accords didn’t lead to the major changes that were expected." The Fraser Institute’s annual report on wait times found that when other specialties were included, Canadians faced an 18.2 week wait from referral by a general practitioner to receipt of treatment in 2014—about the same length of time they faced in 2004 (when the accord was introduced) and significantly higher than the 9.3 week wait they faced in 1993.

Even so, the previous federal government promised an extension of the annual six per cent increase in transfer payments until 2016/17. Starting next year, the rate of increase will be set by a three-year moving average of nominal economic growth, with a minimum three per cent annual increase guaranteed regardless of the state of the economy.

While this interim commitment better balances the health-care demands of our society with our ability to pay for them, both plans ignore the fact that the real source of Canada’s health-care ills is not a lack of funding; it’s lack of fundamental reform to the system.

Several countries with universal health-care systems spend about the same as Canada does, but generally have more resources, greater choice, and shorter wait times. However, these countries generally embrace the private sector as a partner or alternative for the insurance and delivery of health-care services, and expect patients to share in the costs of treatment.

If the premiers are truly interested in improving health care for their residents, they should instead negotiate for greater freedom from Ottawa (and the Canada Health Act) to experiment with such policies, and structure their health-care systems according to the needs of their own unique populations. Crying for more money from Ottawa will do little to improve our health-care system in the absence of fundamental reform.


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