It has been one month since the federal election, and discussions about health-care reform - never prominent during the election - seem to be even further away from the public spotlight.
Nonetheless, some are trying to get their remedies noticed. The usual suspects like the Health Council of Canada - made up of councillors appointed by the federal, provincial, and territorial governments - have put forward their recommendations for improving Canada’s health-care system. However, a significant problem in their approach is how they do not address one fundamental fact about our health-care system: it is financially unsustainable.
The Council’s most recent report focuses primarily on the progress in reducing wait times, catastrophic drug costs, and on health innovation. It also includes recommendations for how the system could be improved. Although the council appropriately concludes that simply pouring more money into health care will not fix the system, it argues that a good management strategy is key to improving efficiency. But the Council is mistaken: we don’t primarily have a management problem; we have an economic problem.
Instead of dealing with health-care financing, the council promotes improved management tools such as public accountability through benchmarks and wait-time targets. While such a strategy for surgeries and diagnostic exams may likely have shortened wait times there, such remedies have not decreased wait times. The Council’s own report implicitly acknowledges this. Although provincial and territorial governments have received $5.5 billion in funding to tackle wait times, long queues for medical services such as diagnostic imaging remain persistent in many jurisdictions.
Our recent survey of physicians found Canadians seeking surgical or other therapeutic treatment faced a median wait time of 18.2 weeks in 2010 across all 10 provinces. Canadians now wait 96 per cent longer than in 1993 when the median wait time was 9.3 weeks.
Wait-time strategies and discussions of public accountability become irrelevant when the public coffers are empty. We can talk about improved efficiency through electronic health records or curbing physician prescribing habits all we want. But provincial governments will continue to face unsustainable growth in health-care costs because policy-makers continue to deny the fact that we can’t keep paying for health care through public means alone. This reality has recently been echoed by numerous organizations, including TD Economics, the C.D. Howe Institute, the OECD and the IMF.
Over the past 10 years and averaged across 10 provinces, government health expenditures grew at an annual average rate of 7.5 per cent. Over the same period, total provincial revenues increased at an annual average rate of 5.7 per cent, while the economy grew by 5.2 per cent. Project these growth trends into the future and it’s clear that most provinces will soon be facing a financial crisis. By 2017, six out of 10 provinces are expected to spend 50 per cent of total available revenues on health care. Some provinces are nearly there, such as Ontario and Quebec, where half of provincial revenues will be swallowed up by health- care costs by the end of 2011.
Now, provincial governments will have to either introduce new taxes or increase current imposts, cut other programs, and/or cut back on medical services currently financed out of the public purse.
Critically, increasing taxes discourages economic growth and reduces the long-term potential revenue base for governments. On health care, rationing cannot continue indefinitely without increasing medical risks for patients.
Patients and providers require the appropriate economic incentives to use the system more responsibly and effectively. This can be achieved by introducing patient cost-sharing (such as user fees or percentage-based co-payments), in addition to allowing for-profit and non-profit health providers to compete for the delivery of publicly insured services. These policies are common all over Europe, and would introduce the necessary competitive incentives that would naturally regulate the supply and demand of medical services and resources.
It’s time policy-makers and Canadians in general understood that our health care system should not be placed on a pedestal that defines us as a nation. While there is still hope, we need to face economic reality, and meaningful reform will require a time-out from the Canada Health Act to allow the provinces to experiment with a number of effective and economically sensible policies that are common elsewhere and lead to better health-care outcomes.
Mark Rovere is the associate director of health policy studies with The Fraser Institute and a Troy Media columnist.
