Are we ready yet for that big reform pill?

By Don Newman, CBC News

Are Canadians ready for a health-care system that would, among other things, include:

  • Patient user fees or medicare premiums?
  • Doctors with their incomes capped but able to charge the privately insured for extra services?
  • Private hospitals operating alongside public ones with the same funding formulas?
  • "Essential" drugs covered by the public system.

These are some of the key recommendations for Canadian health-care reform made by the Organization for Economic Co-operation and Development, to help put our current system on a more sustainable footing.

The Paris-based OECD is one of the world's biggest and best known think-tanks, set up to critique the economies of the 30 developed countries that make up its membership.

Its recommendations to help solve Canada's health-care problems were set out by Dr. Alexandra Bibbee, the senior OECD economist responsible for Canada, at a recent forum of the Institute of Health Economics in Edmonton.

These recommendations were to be the working document for the forum to discuss "Innovation and sustainability in health systems."

But I would have to say they were greeted by polite skepticism by many of the health-care professionals, administrators and politicians at the gathering.

This is perhaps understandable in that some of the recommendations clearly contravene the Canada Health Act, the federal law that regulates the broad conditions of medicare and how Ottawa will fund it. But what the OECD recommendations point out, without directly saying, is that health care is going to cost even more money in the future than it does now. And that "tweaking" the current system isn't going to be nearly enough.

The meaning of innovation

For someone coming to meetings like this from outside the health-care community, it can be a bit of a surprise to discover that when professionals talk about innovation they are often talking about two different things.

Those in the scientific and research community consider innovation to be the improvements in treatments brought about by new drugs and better equipment and techniques.

People at the delivery end, however, speak of innovation as a way to try to contain the escalating cost of providing care.

This cost is increasing at twice the rate of inflation and, if left unchecked, will soon devour more that 50 per cent of all provincial government spending.

What's more, as these things go, one type of innovation (treatment) is putting enormous pressure on the other.

As today's new drugs and procedures extend life for many, they also contribute to an already increasing demographic of older people who will likely require additional support from the system.

This is one of the driving factors that are pushing up costs and making necessary more innovation on the delivery front.

Political deadlines

No one at the Edmonton forum questioned or wanted to slow the research that leads to new drugs and other medical breakthroughs.

But they did feel a strong need to get a handle on rising costs, particularly given the impending political deadline.

Hanging over everyone's heads is the fact that the 10-year funding agreement between Ottawa and the provinces will expire in just over three years and the fiscal future isn't looking particularly rosy.

The 2004 agreement was struck at a time when Ottawa and most of the provinces were running budget surpluses and when it was possible for the federal government to pledge $41 billion in additional health-care spending over 10 years.

Today's context is radically different. In the wake of the worst economic downturn since the 1930s, Ottawa is weighed down with its biggest deficit in history.

What's more, all the provinces are struggling mightily as well and the two biggest, Ontario and Quebec, are deep in the hole.

Federal Finance Minister Jim Flaherty has pledged to return Ottawa to a budgetary surplus by mid-2016. And in the past he has said he would do that without reducing transfers to the provinces, part of the way the federal deficit was eliminated by the Liberals in the mid-1990s.

However, while recently announcing that the deficit for the current fiscal year would be about $3 billion more than expected, Flaherty also suggested that the growth in the amount Ottawa now sends to the provinces could be scaled back.

Not a full-fledged cut perhaps, but less than the amounts for which provincial governments might have hoped.

It is the kind of talk that has undoubtedly sent a chill through provincial capitals.

Bad timing

Ottawa currently contributes about 20 per cent of the money that finances health care. Cutting the growth rate of that spending would drive that contribution down.

That would mean provinces would have to reduce services or else make up the shortfall from their own revenues.

This is not a new phenomenon and negotiations over health care funding have always been difficult. In this case, though, the current political calendar just makes it that much trickier because no government is going to want to be the Grinch that short-changed health-care while it is up for re-election.

Because of fixed-date elections, Manitoba, P.E.I., Ontario, Saskatchewan and Newfoundland and Labrador will all have elections in 2011.

Alberta and Quebec are expected to go to the polls in 2012, while B.C. goes in 2013 and, possibly, Nova Scotia a year later.

The next federal election is scheduled for October 2012 but minority governments are on a constant election footing. So the economy and the political calendar both bode ill for negotiating a new health-care agreement.

But a new agreement must be reached if the current system in not going to sputter even more than many people think it does now.

Innovation may mean different things to different people. But change is coming. And that change is going to cost more.



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