Fraser Forum

More money from Ottawa won’t solve Canada’s health-care woes

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More money from Ottawa won’t solve Canada’s health-care woes

On Tuesday (Feb. 7), Prime Minister Trudeau will meet with the premiers to discuss a possible deal that involves increased health-care funding for the provinces. This new spending from Ottawa will likely contain additional strings and “accountability measures” and the expectation that earmarked funds be put toward specific priorities. Unfortunately, tying performance and accountability expectations to cash injections is nothing new and is unlikely to the achieve the necessary performance improvements.

Contrary to the belief that the country’s health-care system is underfunded, Canada already operates one of the most expensive health-care systems in the world. In fact, when compared to other universal systems, total health-care spending in 2020 comprised 13.3 per cent of Canada’s economy (1st among 30 advanced countries) while we rank 8th (out of 30) on spending per person (adjusting for age).

But this high spending has not produced better performance. In 2020, Canada performed poorly on key indicators including the availability of physicians (2.8 per thousand people, for 28th out of 30 countries), hospital beds (2.2 per thousand people, for 23rd out of 28 countries), MRI machines (10.3 per million people, 26th out of 29 countries) and CT scanners (15 per million people, 27th out of 30 countries). And these poor rankings existed even before the pandemic.

But what about access to timely care?

In 2020, Canada ranked last (10th out of 10 universal health-care countries) on access to specialist visits in under four weeks (38 per cent of patients). We also ranked last on elective surgical care in under four months (62 per cent of patients), far less than in Germany (99 per cent of patients), Switzerland (94 per cent), France (90 per cent) and the Netherlands (87 per cent). The Commonwealth Fund found similar results with Canada ranking last on measures of timely care in 2016, years before the pandemic.

The evidence is clear. Despite being one of the highest spenders on health care in the world, Canada performs poorly relative to other universal health-care countries. Money has not been the issue. So, if federal cash injections are unlikely to achieve their stated objectives, what’s the answer?

Instead of simply asking for more money from Ottawa, provinces could instead learn from previous episodes of Canadian policy reform. In the 1990s, the federal government reduced transfers to the provinces for social services while eliminating most strings attached to the funding. The result was an increase in the autonomy provinces had over the use of these funds, greater local policy experimentation and ultimately some fiscal relief.

The existing program of federal health-care funding already comes with numerous conditions, with both mandatory and non-mandatory penalties for the provinces if they are violated. The result is a policy arrangement at odds with most other universal systems, many of which outperform our own.

If the premiers want a high-performing and efficient health-care system, they should instead advocate for higher degrees of local control over their own jurisdictional affairs and craft solutions tailored to their own unique challenges.

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