User-fee follies revisited

TheStar.com – Opinion
Published On Wed Apr 07 2010.  By Thomas Walkom, National Affairs Columnist

Quebec Premier Jean Charest says he plans to make patients pay a $25 user fee each time they see a doctor. Federal Liberal Leader Michael Ignatieff says that sounds fine by him. If this is the so-called adult conversation the country is planning to have on health care, we’re in bad shape.

The reason? We’ve had this hoary, old conversation before – over and over and over again. Mike Harris suggested user fees for medicare when he won the Ontario Tory leadership in 1990. Former Liberal prime minister Jean Chrétien mused about them in 2001, as did Ralph Klein, then Alberta’s Conservative premier, a year later.

Each one eventually dropped the idea. First, monkeying with medicare is political dynamite in Canada. But second and more important, user fees don’t work.

That’s the conclusion of study after study. Earlier in this decade, a Senate committee looked into medicare user fees and, indeed, was initially keen on the idea.

But in the end, it concluded that a low user fee would cost more to collect than it would raise in revenue. And a high user fee would deter the sick from seeking necessary medical help early, contributing to higher costs later on.

“Shifting more of the cost to individual patients and their families via private payments, the facile `solution’ recommended by many, is really nothing more than an expensive way of relieving, or at the least, diminishing governments’ problem,” the Senate committee concluded in 2002. “There is only one source of funding for health care – the Canadian public.”

In plain English, that means that off-loading medicare costs onto the sick might make governments look better in the short run. But in the end, we all end up paying as much or more.

Nor was the committee the first to reach this conclusion. A 1979 Ontario Economic Council report concluded that user fees penalize the sick without creating significant savings. A 1980 study done for Ottawa made much the same point. A 1987 study undertaken in the U.S. by the RAND Corp. found that user fees deterred people from seeking medical help when they needed it most. And on. And on. And on.

At first glance, all of this seems counterintuitive. In other areas of life, user fees do encourage judicious consumption.

But health care is not just any consumer product. The big spending decisions, such as when to have an MRI or undergo chemotherapy, are made not by patients but their doctors. In fact, health care is one area where penny-pinching now (“Oh, this lump probably isn’t cancerous; I don’t need to see a doctor”) can cost much more later.

Oh. And did I mention that, contrary to Ignatieff’s bland assertion, the Quebec scheme almost certainly contravenes the Canada Health Act. The federal statute governing medicare explicitly outlaws any kind of user fee (except for accommodation and meals in long-term care facilities) no matter when or where it is levied.

Ignatieff’s insistence that Quebec’s user fee plans are mere “details” is a depressing demonstration of how little he has followed the last 30 years of political debate in Canada

As Toronto physician Michael Rachlis recently pointed out in these pages, the real cost drivers in health care are those services that lie outside of medicare proper – mainly drugs. If Quebec, or any other province, seriously wanted to control health costs, it would use its bargaining clout to negotiate lower drug costs with the big pharmaceutical firms.

That would be the beginning of a serious adult conversation.

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