The 800 pound gorillas

downloadThere is an 800 pound gorilla in Canada’s political-fiscal living room and. sooner or later, it is going to go on a rampage and tear the place apart. In fact, sadly, there is an 800 pound gorilla in every room. There are more than a dozen of them and they have the potential to bring the whole house down. The only problem is that we all LOVE our 800 pound gorillas and we are terrified about what our lives might be like if anything, anything at all, were ever done to disturb them. The gorillas are, of course, our “sacred” health care systems ~ federally mandated but managed and (mostly) paid for by each province and territory.

Let’s first, take a look at how much the 800 pound gorillas cost:

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Health care consumes from 20% (Yukon) to 46% (Nova Scotia) of provincial and territorial budgets or from just over $5,600 per person (in Quebec) to over $13,000 (in Nunavut). On average it accounts for $6,000 for every man, woman and child in Canada, that’s $215 Billion or 11% of GDP, and it’s growing. The rate of growth has slowed, somewhat, in recent years, but it’s still growing at more than 2% per year.

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Compare that to, just for example, national defence, which, at around $21 Billion, or $600 per person, consumes just 1% of GDP and is actually declining.

defence_chart1

But, I’m not trying, today, to make a case for more defence spending … I’ve done that before.

The case I want to make, is for potential Conservative leaders …

… and it is that we need to face our fears and confront the health care funding challenge.

 The problem is, it seems to me, both reasonably simple and very, very scary.

The scary part, first …

Remember her?

Solange Denis_2

That was Mme Solange Denis (with a Liberal MP helping her) and, way back in the mid 1980s, when it appeared that Prime Minister Brian Mulroney might start to try to make some sense out of the rubbish heap of social spending that Pierre Trudeau had left for him, and for us, she came out of nowhere and shouted at him: “You lied to us. I was made to vote for you and then it’s good-bye, Charlie Brown.” Prime Minister Mulroney was, by all accounts, terrified by the implications of one little old lady and that one sentiment and the next thing we knew social programmes, especially health care funding, were a “sacred trust.”

It appears to me that every government since, including Stephen Harper’s remains quite resolutely  committed to appeasing Mme Denis and her ilk by refusing to even examine social spending. But look at these two charts, for Ontario:

The health sector consumes 42% of the Ontario government’s spending ($50 Billion), more than twice as much as education. That means that every penny collected as personal income tax in Ontario and every penny collected as sales tax is used to fund health care. Everything else, roads, education, police and prisons and, and, and is paid for by corporate taxes and the education share of property taxes and the tiny health insurance premium and federal transfers and so on. But here, in a repot from the Conference Board of Canada is some much more frightening data:

Canada spends more on health care than most other Organization for Economic Cooperation and Development (OECD) countries (the OECD is the “club” of rich, advanced nations) , except for the United States; but

Canada’s health outcomes, measures that tell us how good our health care system performs, are not as good as most other countries. You can compare for yourself at the OECD’s web site. Click on the green @ symbol for Data visualisation and you can see that, again and again and again, Canada spends too much and gets too little.

Why?

We need to go back to 1984 when, in one of their last acts in office, Pierre Trudeau and Monique Begin passed the Canada Health Act. The act doesn’t really say anything much about keeping Canadians healthy, because that, health care, proper, is a provincial responsibility, it, through five principles, deals with five administrative and financial matters …

5-criteria

… but in so doing it dictates that we must, effectively, have a “single payer” public health insurance system. Now, maybe, in 1980 people actually believed that public insurance systems are better, more efficient and cost effective than private ones operating in a competitive marketplace, and, maybe, some people still believe that … but they aren’t, it’s not true. What the Canada Health Act does is forces provinces, the governments that actually provide health insurance, to use single source ~ taxpayer ~ funding only. The result is that we have a very expensive health insurance system, not quite as expensive as the US one but more costly than most OECD members, that doesn’t help us to get very good healthcare.

Canada is 4th out of 11 countries in costs per capita but we are not in the “Top 2” in any measure of effectiveness and we are in the bottom two in four out of 11 of those measures. Overall, in that ranking, we are 10th out of 11, only the USA does worse. Study after study after study says the same thing, but nothing happens … because health care is a “sacred trust” and Canadian have come (very, very incorrectly) to equate the Canada health Act with health care.

So, to restate the problem: health care costs continue to grow inexorably, they eat a greater and greater and greater share of provincial budgets, crowding out e.g. education and infrastructure (road and bridge) maintenance, and, effectively, weakening the economic base for the future of each province and every Canadian. Health care costs keep rising for a number of reasons but one of them is that demand seems endless. And one reason it is endless is that Canadians think that health care is and must be free.

But “free” health care was not what Saint Tommy Douglas had in mind. Tommy Douglas 1998_douglas_stampwanted to protect us all from catastrophic medical bills … and such things existed in the 1950s. There was a time when ordinary Canadians thought very long and hard before calling a doctor or even visiting a doctor’s office and many a Canadian died too early, perhaps only by weeks or months but in too many cases by years because they quite simply could not afford to go to a hospital. That was a fact of life in this country in the 1950s. But I’m pretty sure that Tommy Douglas didn’t really want what Pierre Trudeau and Monique Begin provided because he was a premier who always balanced his budgets and he would have been able to see that the Canada Health Act was a recipe for fiscal disaster.

The countries with the most successful health care systems, those with both lower costs and better outcomes than Canada, all have mixed funding: some health insurance, to cover “medically necessary” services is provided to all at very highly subsidized (by the taxpayer) rates, and all are able to buy private health insurance to provide more, or “better,” (nicer) and faster health services. In my mind Singapore has the best system, but those of e.g. Britain, Sweden and France are all better than Canada’s. The only system which is not any good at all is the US system. We really need to stop talking about US health care it is not a useful model for anyone, anywhere, ever.

Just take a look at the five “principles” of Singapore’s Health care system:

  1. Singapore believes in ensuring quality and affordable basic medical services for all. At the same time, Singapore promotes healthy living and preventive health programmes as well as maintains high standards of living, clean water and hygiene to achieve better health for all.
  2. Singapore’s healthcare system is designed to ensure that everyone has access to different levels of healthcare in a timely, cost-effective and seamless manner.
  3. Healthcare services are accessible through a wide network of primary, acute and step-down care providers.
  4. The Ministry of Health and its statutory boards regulate both the public and private providers of healthcare in Singapore.
  5. To ensure that patients are treated safely with good healthcare standards, the Ministry strives to promote better quality and innovation through various initiatives.

Now, Singapore being a unitary state, can have a “holistic” system while Canada, being a federal state, must have “principles” like portability (Number 4 in the Canada Health Act). But, that aside, what the Singapore system offers is a mix of good ‘operational’ effectiveness (health outcomes) and efficiency (cost effectiveness). Everyone who receives any medical service in Singapore receives a bill for it. Now, of course, not everyone can pay their bills and that is where the mix of state and private insurance comes in. Singapore assumes, correctly, that, as in politics, people are distributed along a bell curve:

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There are a few people, way over at the right edge, who are both smart and healthy, because smart people tend to take good care of their health, and, also because they are very smart, so rich that they do not need any help from anyone. Over at the extreme left there are also a few people who need a lot of help, in every way, but who, for all practical purposes are beyond help. The Singapore system is designed to help the other 98.8% some of whom (1.7% of the people) need a lot of help and consume a lot of taxpayer resources and a similar number who need very little help and almost never need any government support, and then 4.4% who need considerable help and some government support and so on until we get to the 40% who need only occasional medical help and who can, mostly, manage with private insurance.

There is no reason why a Canadian province, say Quebec, which has a population slightly larger than Singapore’s, could not design a health care system based on a approach similar to Singapore’s and then provide its people with better health care (and still portable) at lower costs … and if Quebec did that, and showed the way, then other provinces would follow suit and also offer better, comprehensive, universal and portable,  health care at lower costs.

Well, that’s not quite true, there is one reason no Canadian province could do that, could implement a better, more effective and more cost effective health care system: the Canada Health Act restricts how it can provide health insurance.

Provinces, like Ontario, try to contain health care costs but it seems like an exercise in futility. Every so often a doctor or a bureaucrat tries to put a lid on something, perhaps to define “medically necessary” or to prescribe an “adequate” treatment even though a newer, perhaps better one might be available at much higher cost. Understandably the patient, an “ordinary Canadian” just like you and me, wants the best, not just the “adequate,” and she or he wants to decide, with her physician, what is “necessary” for her or himself. The media ends up reporting on the patent’s plight and the government, inevitably, gives in and spends more than it planned. The systems, in each province and territory, need more and More and MORE money, but the taxpayer, the single payer in the system, is unwilling to pay higher taxes nor is she or he wiling to drive on inadequately maintained highways or to pay even higher tuition for her or his college age kids. So the government borrows, running higher and higher deficits leaving HUGE bills for our grandchildren to pay.

Problem-Solution-300x199The Canada Health Act is part of the problem, not part of the solution. We, Canadians, must, eventually, bell the health care cat, but before “we,” in our provinces, can even start doing that, the national government, in Ottawa, must remove the barriers, the problem, the parts of the Canada Health Act that confine provinces within a fiscal straight jacket. A national government needs to do that.

The national government that we will need to amend the Canada Health Act so that provinces can experiment and design and then implement systems that work better and cost less is unlikely to be a Liberal one.

That means that the Conservative Party needs a leader who will commit to reviewing and revising the Canada Health Act so that we, Canadians in our provinces, can have health care as good as our British, French and Swedish friends enjoy and at prices that are closer to what they pay.

A Conservative leader needs to chase the 800 pound gorillas out of our rooms. It will be, I’m afraid, a bit of a test for me … leadership means making the hard choices; leadership means leading the charge, from the front; leadership means facing down the scary people ~ like little Mme Solange Denis ~ and standing up for principles;  I will base my choice for the next Conservative leader, in some part, on how (s)he proposes to help solve Canada’s health care funding dilemma: the 800 pound gorillas.

 

16 thoughts on “The 800 pound gorillas”

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