Medicare has a very good month

Posted on November 9, 2010 in Health Debates

Source: — Authors: – Opinion/Editorialopinion
Published On Tue Nov 09 2010.   Dr. Michael Rachlis

The past month has seen some excellent news for medicare. Of course this doesn’t translate into national attention. If it bleeds, it leads. If it succeeds, coverage recedes.

In October, the Canadian Institute for Health Information released the latest figures on health spending.

Last year, health spending shot up to 11.9 per cent of the country’s economy mainly because the economy fell apart not because spending particularly increased. Still, the data generated concern and resulted in panic stories about the end of medicare’s sustainability.

However, with a tighter hand on the cash, this year per-capita health costs grew by only 1.4 per cent after controlling for inflation. Public sector costs grew even more slowly. With a recovering economy, health costs slid to 11.7 per cent of GDP this year and will almost certainly continue to fall for the next two to three years.

The other good news concerns events on the Prairies. The Calgary Health Resource Centre (HRC) has been a focus of the Alberta privatization debate since a local group bought the old Grace Hospital for $1. HRC ran into financial problems earlier this year and was pushed into bankruptcy by a supplier.

During the summer, the provincial health services board chose to purchase services from a new public ambulatory surgical centre on the site of the Foothills Hospital instead of HRC because of costs. Then HRC sued the health services board. On Oct. 14, Alberta Health Services quietly settled with HRC. The clinic appears on the way to bankruptcy but this year the health services board paid out $4 million to keep HRC operating, including $2.6 million in legal fees.

This summer, the Saskatchewan government announced that as part of its wait list strategy, the health regions in Regina and Saskatoon would purchase services from private clinics. CUPE represents workers at the Regina Qu’Appelle Health Region and has a clause in its collective agreement which puts the onus on the employer to prove that costs would be lower before they can contract out services.

On Sept. 30, arbitrator Dan Ish, a former dean of law at the University of Saskatchewan, concluded that the employer’s costing methodology was faulty and that even if additional capital expenditures are required, i.e. building a public ambulatory surgical facility, it would be less expensive than to pay for care in the private clinic. The arbitrator declared that contracts for private services need to be terminated by 2013 and the procedures returned to the public sector. (Full disclosure, I co-authored a report with Toronto economist Hugh Mackenzie for CUPE and appeared as an expert witness for them.)

These reforms are not unknown in Ontario. The Queensway surgicentre, part of the Queensway ambulatory site of the non-profit Trillium health-care system, has been North America’s largest free-standing day-surgery facility since it opened in 2001.

Wait times have plummeted in Ontario for most of the elective services that the 2004 federal-provincial-territorial health accord targeted. Increasingly, many provinces have concluded that public agencies can capture the efficiencies of private ambulatory care facilities. And innovation is humming in Canada’s not-for-profit health-care organizations and care teams.

Putting the last month together, we should be pleased that medicare’s affordability is improving while we make progress in improving access to some services. We can fix other problems like primary health care and community care for the elderly with a similar focus on improved public sector management and service redesign. Medicare remains as sustainable as we want it to be.

Dr. Michael Rachlis is a health policy analyst and an associate professor at the University of Toronto.

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