An opening for health care reform

Posted on April 14, 2010 in Health Debates

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Posted: April 14, 2010.  Shaun Francis

The last few weeks have brought a series of changes to health care in North America. Budgets from various Canadian jurisdictions have presented a mixed bag for addressing (or failing to address) this country’s sustainability gap. Meanwhile, south of the border, U.S. President Barack Obama signed a law providing medical insurance to approximately 32 million Americans who previously couldn’t afford it.

Taken together, these events offer no single prescription for reform — with the U.S. taking a major step toward the principle of universality, while Quebec flirts with distancing itself from said principle; and Ontario confines its own reform efforts to the prescription-drug industry, leaving broader challenges for future governments to tackle.

Personally, I am optimistic that the U.S reforms will open the doors to change in Canada. The United States now has a form of universal coverage, and that fact is bound to have psychological implications for Canadians. Many Canadians seeking the best care in the world often go south, to the United States — just like Newfoundland Premier Danny Williams recently did for his cardiac treatment. Such decampments may hurt our national pride, but in the past we could always console ourselves with the offsetting fact that Canada is the only North American country to have universal health care. We had the moral high road, we told ourselves. Now, that’s not as clear cut.

The Americans now have the edge in quality, thanks to their advanced technology and therapies, as well as a system that is set to become just as humane as our own. As that reality reverberates throughout Canada, domestic pressure to reform our increasingly faltering systems will increase.

However, neither Ontario’s nor Ottawa’s recent budgets addressed health care in any substantive way, a decision that is particularly puzzling for Dalton McGuinty Liberals, who face the country’s largest challenges: Health spending is projected to rise to half the province’s budget outlay by 2014. McGuinty well knows this. But because he faces an election in 2011, he’s loath to impose any substantive reforms that critics could claim were eroding the public system.

In fact, in a recent speech to the Canadian Club, Ontario Health Minister Deb Matthews made it clear that the Liberals were elected to save the province from the alleged threat of private health care, and that there would only ever be a monopoly government payer under the Liberal watch. Meanwhile, hospitals make do with minimum levels of funding and infrastructure is ageing. It will take a while, but Obama’s reforms eventually may shame McGuinty into action.

Not that I am a fan of Obamacare. Sure, more people will be covered, but the reforms contained few measures designed to control the cost of the provided care. There was a chance here to promote competition, to place the consumer at the centre of heath-care decisions and spending. Instead, Obamacare will make the world’s most expensive health system even more expensive.

The Congressional Budget Office predicts that Obamacare “would produce a net reduction in federal deficits of $143-billion over the 2010–2019 period.” To which I respond: Not a chance. There is no way to provide subsidized health insurance to 32 million people without increasing costs.

The key here is the term “subsidized.” Just like in Canada, newly insured U.S. consumers won’t have to pay the real economic cost of the services they’re getting. And so they’ll overuse the services. It’s a prescription for budget spirals.

What’s the right path for Canada? Quebec could point the way. With its late-March budget, Jean Charest’s government seized the health-reform initiative. The proposed user fees of $25 per doctor’s visit are far from radical when compared to other Western jurisdictions. But they give health-care consumers a modest inducement to not use the health-care system frivolously. At the very least, Quebec’s government is being honest, admitting that the current system is unsustainable.

The Harper Conservatives could prevent the Quebec government from instituting the proposed user fees, which certainly violate the spirit of the Canadian Health Act. But the Prime Minister hasn’t blocked the changes. Realizing the severity of the situation, Harper has tacitly allowed the provinces to innovate, to compete to come up with the best solution. That’s the way our federal system is supposed to work.

Bolder reforms would include activity-based funding for hospitals, real wait-time commitments and freedom to purchase care when those commitments aren’t met. A few years ago, such reforms seemed impossible. But recent events suggest we’ve entered a new, reform-friendly era for health care in this country. Let’s get to it.

National Post

Shaun Francis is chairman and CEO of Medcan Health Management, Inc., a leading health-care services provider.

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