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PoliticsThe Uncertain Future of Canadian Health Care

The Uncertain Future of Canadian Health Care

The Uncertain Future of Canadian Health Care

In the past decade, Canada's health care I system has declined from one that was "the envy of the world" to one that is in dire need of renewal. Canadians no longer feel as confident about Medicare as they once did. Hospital waiting lists are too long. Drug prices are too high. No one is accountable for how the system is financed.

To put it simply, Medicare in Canada is in trouble. As a result, Prime Minister Jean Chretien appointed former Saskatchewan Premier Roy Romanow to head a commission on the future of health care in Canada. Meanwhile, Senator Michael Kirby and the Standing Committee on Social Affairs, Science and Technology have released their own study — which has resulted in some important, yet conflicting, recommendations to the Romanow report. And Federal Health Minister Anne McLellan will play a crucial role in deciding how the federal government will react to each report's recommendations.

Just days before the release of the Romanow report on November 28, Ottawa Life reporter Peter Gill sat down for separate interviews with Romanow, Kirby and McLellan to discuss the uncertain state of Canada's health care system.

Ottawa Life Magazine: Two generations of Canadians have benefited from universal health care. Can you define this key component of Canada's national identity?

Roy Romanow: That is a very tough question. The underlying principle behind universal health care is that ability to pay is not the paramount factor in delivering health care services. However, universal health care does not mean that everything is included in a publicly funded health care system — only the components necessary for good health and illness prevention.

OLM: You were quoted recently in the National Post as saying that all the recommendations you make with respect to dollars are in the context of available economic and fiscal data. Yet the federal government has other important issues that must be addressed, namely the Kyoto Protocol and re-equipping Canada's armed forces. How much money will be needed to implement your recommendations?

RR: I can't give you specific numbers, but let me make a few points about the issue of fiscal sustainability. First of all, it's clear beyond any doubt that governments were facing a very serious public finance situation a decade ago. Deficits were high and debts were accumulating. So health care expenditures were scaled back. The Canadian Institute of Health Information documents by graph a sharp dip from 1990 until 2000, when the First Ministers met and the federal government agreed to replenish over five years its contribution to health care funding. Today, we spend about 9.1% of our total GDP on health care. We have been as high as 10.1%. Now take a look at another fact – (Finance Minister John) Manley's update report on the fiscal situation. Mr. Manley says that by 2007-08, the surplus will be $14.5 billion. Those numbers are supported, not only by Department of Finance officials, but by three independent financial houses that had access to the records.

So that's the money. That's without raising one penny of tax. I will make no further comment, except simply leave it to the individual taxpayer to determine whether or not – with that kind of an estimated surplus – sufficient funds are available to repair the deficiencies of earlier years.

Canadians are prepared for any new reallocation of funds, but only if those new funds buy "transformative change" for the system. The best example is the September 2000 accord over five years – $21 billion more re-injected by the federal government into the health care system. Yet less than two years later, people don't see any benefit. They still argue about waiting lists and are concerned about the future of health care. We need to transform the system in areas of primary care, pharmacare, homecare and advanced diagnostic services. The outlook on all credible evidence is that we have the money available now to replenish. If we do so, we must do it this time with purpose and with reorganization.

OLM: Senator Michael Kirby would like to see an immediate infusion of $5 billion a year into the health care system, from new taxes. Why do you think his plan for a special premium is "regressive," as the National Post quoted you as saying?

RR: This "premium" would be a very regressive tax, because it is not based on the principle of ability to pay. If you make $100,000 a year, you still pay the same flat premium. If you make $40,000 a year, you would still pay that same flat premium. So it's not a fair tax, because any tax – as much as we like or don't like to pay them – should be based at least on the principle of the ability to pay. The more you make, the more you pay. The less you make, the less you pay.

The Senate committee has attempted to make it more sensitive by putting five categories under these variable premiums. You would have to add another 15 categories to make it sensitive to the various income brackets that people fall into. In effect, coming right back to the progressive taxation principles of our current system, you can't calibrate it with that degree of accuracy without a tremendous amount of duplication of paperwork and ending up exactly where you left off. So you end up with a tax that hurts those at the bottom end of the economic scale. Statistics show that these are the people who are most likely in need of health care.

OLM: Do you think the universal, single-payer health care system should be expanded beyond the current services offered by doctors and hospitals? If so, which services should be expanded? Which should have priority?

RR: It is clear that the single-payer system is more efficient than a multi-payer system. The evidence is there. Research in the United States shows that, on average every year per capita, the administrative overhead costs of delivering health care through a multi-payer, so-called competitive system – is about US$1,150 per person per year. In Canada, it is about US$350 per person per year.

Before Medicare, we had private for-profit health care. This is touted as something new. Well, if they want me to recommend something new, I can take them back 50 years when we didn't have Medicare. Back then, we paralleled the U.S. in the cost as a percentage of GDP. But then we became a single-payer — following the lead of some European countries — and we leveled off at 9.1% or 10.1% of GDP and America at 13.5%, indicating greater efficiency on our part. But Medicare was limited to hospitals and doctors. Now we are moving toward more home care, greater use of drugs to prevent hospitalization and new advanced diagnostics – Magnetic Resonance Imaging (MRI), Positron Emission Tomography (or PETscans), you name them — and the same principle of efficiency should apply in these areas as well. It becomes a question of which new services should be brought into the health care basket under the single-payer system. My report speaks to that.

Finally, not everything will be in the basket. This is not possible. And there is always room for profit, dearly in those areas outside the basket, not brought in under the single payer. There is also room for partnering, mainly in ancillary areas, such as linen laundry, blood- and urine-testing, and the like. That's the argument for expanding the basket. I generally favour expansion, because we haven't changed the fundamentals in 40 years.

OLM: On that same note, even today with all its problems, Canada's health care system is still viewed, for the most part, as the best system in the world and is still being copied by many developing countries. Do you think Canada's system is the best right now?

RR: Ten years ago, Canadians said it was the best system in the world. They don't feel that way about it today, because they have witnessed the steady cutbacks and something just as debilitating, if not more so — a dysfunctional federal-provincial atmosphere characterized by long-distance hollering, finger-pointing and accusations. Federal and provincial politicians are not cooperating to look after the people of Canada's health care needs. One can't be surprised, then, in this loss of confidence in the system. The objective of this exercise should be to restore that confidence. I'd like to add that even though our system is under stress and needs reform and renewal, it's still a pretty doggone good system, one that is the envy of many countries.

OLM: In your opinion, is there anything drastically wrong or flawed with the Canada Health Act?

RR: I think the Canada Health Act has served Canadians very well and in its fundamentals, it is not flawed. I think it speaks to Canadian values and has reached an almost iconic status. But it could stand a positive modernization. For example, many Canadians have told me that an accountability principle should be added to the Act. Canadians want to know where their tax dollars are going. My report speaks to this whole issue of governance. Wait and see.

By: Peter Gill

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