Shrinking Medicare, Expanding Poverty

Posted on April 27, 2011 in Health Delivery System

Source: — Authors: , – news – Public message sponsored by the Canadian Federation of Nurses Unions
Thu, 2011-04-21.   Steven Lewis and Linda Silas

Medicare as defined by the Canada Health Act is constantly shrinking. In 1975, spending on hospitals and doctors – the core medicare services – accounted for 60% of total health spending. In 2010 the figure was 41%. Governments fund only half of all other types of care and have deinsured medically necessary services such as optometric visits. But the biggest and growing gap in the system is in the care of seniors: prescription drugs, home care, and long-term residential care, known as LTC.

During the past two decades, federal government leadership in defining national medicare has vanished. Ottawa has become little more than a cheque-writing machine except for the areas where it is constitutionally responsible for service delivery. The provinces are delighted to bank the mainly unconditional cash transfers that grow at 6% a year. But what’s good for provincial governments may not be so good for the Canadian public, and especially the elderly.

LTC used to be a universal program under which residents paid a flat-rate room and board charge that even the poorest seniors could afford. That has changed significantly in several provinces which charge residents escalating rates based on assets and income. In British Columbia, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador, the maximum monthly charge in public facilities now exceeds $2,500. As ever-greater shares of seniors’ incomes go to paying for LTC, the result is a growing population with little or no discretionary income – the functionally poor.

No one wants to move to a nursing home, and first class home care can make it possible for many frail elderly people to stay in the community. Yet home care remains the poor cousin of the health care system. Budgets are strained and eligibility criteria are stringent, driving seniors and their families to buy care from the private sector. Seniors’ biggest needs are the management of chronic diseases, help with the activities of daily living, and support for family members who take on the bulk of the care responsibilities. These forms of care are chips in a poker game where governments bet that families will fold and deliver, accept to do without, or pay for the services themselves. Often seniors persevere without assistance until their health breaks down, they turn up at hospital emergency wards, and end up in LTC. For all the talk of prevention and helping people stay in the community, the system is stingy with inexpensive home care and more generous in providing expensive institutional care. It’s a classic lose-lose: worse for the person, and more costly for the public.

Compounding the problem is Canada’s uneven and inefficient prescription drug program. Some provinces offer good coverage to seniors while others do not. After years of discussion there is still no Canada-wide drug insurance coverage. Too many people choose not to fill prescriptions because they cannot afford them. Canadian governments finance only about half the costs of prescription drugs, compared to 75% and more in most OECD countries. The result is compromised health, a patchwork system of private insurance and out-of-pocket spending, high drug prices, and often poor quality prescribing. The health and financial risks fall disproportionately on those with no coverage.

The toll exacted by this fragmentation mounts daily, making a mockery of the core medicare principle of comprehensiveness enshrined in the Canada Health Act. Countries such as Denmark have truly comprehensive home and community care systems and excellent drug coverage. Seniors care is there a collective, tax-funded responsibility. Election campaigns are a good time to ask political parties to declare whether Canadian seniors and their families are similarly deserving.

The 2003 and 2004 Health Accords were touted as a fix for a generation, but they left out the generation that needs home care, LTC, and good drug coverage. The motivating ideal that created medicare was to protect Canadians from financial hardship due to health care costs. It did so at the beginning, but for many, it no longer does. As health care shifts away from doctors and hospitals, the Canada Health Act becomes less relevant to everyday health care needs. The harsh reality is that if you don’t need to be in an acute care hospital, you are largely on the hook for most of your expenses either directly or, if you are lucky, through insurance at your work.

The poverty of health care policy has resulted in a poverty of choices for seniors and their families and financial poverty for those whose nominally adequate incomes are increasingly spent on various forms of care. Rather than contain costs, these policy failures have made the entire system less just and less efficient. The absence of federal leadership didn’t create this debacle by itself, but principled and strategic federal leadership is essential to righting the ship. Health care continues to be a top priority for Canadians. It is timely to call upon leaders to articulate their plans for addressing these long-standing gaps.


Steven Lewis is President of Access Consulting Ltd. in Saskatoon and Adjunct Professor of Health Policy at the University of Calgary and Simon Fraser University. Linda Silas is President of the Canadian Federation of Nurses Unions that represents 176,000 nurses. Visit

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