Hot! This health-care crisis will require more than savings around the edges

TheGlobeandMail.com – Opinions – Unless we want perpetual debt or much higher taxes, it’s time for some difficult conversations
Published on Wednesday, Jan. 27, 2010. Last updated on Friday, Jan. 29, 2010

Not that long ago, health care was at the top of the political agenda, federally and provincially. Any number of opinion polls showed it as top of mind for most Canadians, too.

Suddenly, no one was talking about it. The environment and climate change became the hot issue. More recently, the economy has consumed the attention of the public and politicians, understandably.

Meantime, however, the burgeoning crisis in health care has become more daunting.

Now, it appears the federal government understands there is a reckoning about to occur. Finance Minister Jim Flaherty can read numbers as well as the next guy and he knows that the current cost of delivering health care in Canada is unsustainable unless the country wants to go into perpetual debt or people are prepared to pay much higher taxes.

Ottawa’s current health funding deal with the provinces – $41-billion over 10 years – expires in 2014. Given the precarious state of the federal treasury, it seems unlikely it will sign a new long-term health financing agreement as generous as that. Health spending is increasing faster than government revenue. Increasingly, budgets for education, infrastructure investment and social services are contracting to support health care.

At the same time, the number of taxpayers available to support the system is shrinking.

It is usually at about this point in the discussion that people start talking about efficiencies that will have to be found. And believe me, there isn’t a province in Canada or a country in the world that hasn’t been looking for them for some time now. But ultimately, you’re talking about savings around the edges.

For example, 70 per cent of B.C.’s health-care budget goes toward wages and benefits for doctors, nurses, residential care aides and so on. A billion dollars of the province’s $16-billion annual health care budget is spent on drugs. Then you have the costs of supplies, administration and other areas.

Yes, in a system that big, there are likely to be some things you can do to streamline the process. That might affect productivity, but talk to health-care managers and they’ll tell you those moves don’t lead to a lot of savings. The government has introduced some competition among hospitals in Greater Vancouver, which has driven some productivity improvements but not significant cost reductions.

No, if governments are serious about changing the present course of health-care spending – and it has to be changed, because the route we’re on leads us over a cliff – there have to be some difficult conversations. And one has to occur between Ottawa and the provinces.

Yes, Ottawa distributes important health-care money to the provinces, but it only covers a small percentage of their overall costs. B.C., for instance, gets about $3-billion a year from the federal government, about 20 per cent of its total health budget. And yet, B.C. has to administer its system under rules set out by Ottawa and the Canada Health Act.

Think about it: If a province wanted to delist certain procedures from coverage in the interest of saving money, it couldn’t because someone who is only helping pay a fraction of its costs says it can’t. In some cases, Ottawa even adds to the provinces’ burden by expanding the scope of areas that have to be covered under medicare.

There is something fundamentally wrong with this arrangement.

There is never any real progress on rethinking our health-care system because of politics. No party wants to talk publicly, for instance, about making individuals more accountable for their own health, or about rewarding those who look after themselves and penalizing those who don’t. No politician wants to even raise the spectre of an income-adjusted annual health-care surcharge based on how often you use the system.

And certainly no one wants to talk about the lengths to which we go to keep the aged and near-dead alive, or about the delisting of certain drugs and procedures from medical coverage and allowing private providers to fill the gap. Mention any of these ideas and the opposition parties, regardless of their ideological persuasion, rev up the fear-mongering among seniors and others, leaving us in the precarious situation where we find ourselves today.

“Health care is so effective and so desirable that our demand for it is almost without limits,” says historian Michael Bliss. “Whoever tries to impose limits is bound to be unpopular.” And so we drive toward the horizon as the cliff gets closer every day.

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