Canadian Health Care Needs Innovation, Not Privatization

Canadian voters consistently rank health care among their highest priorities, so it was not surprising to see it pop up as an issue during the recent federal election campaign. However, by promising to renew the 10-year deal with the provinces and territories on the Canada Health Transfer, all the main party leaders were able to avoid explaining in detail what they would do to reform and revitalize the health system.

More disquieting, however, was the fact that their commitment to this deal removed any motivation for the premiers to sit down with the prime minister to set a new direction for medicare. After all, the money has been promised with no strings attached.

This is most unfortunate because, whether we like it or not, "business as usual" in health care is not a viable option. We must choose which road of reform we want to go down. There have been some positive efforts to improve the quality and timeliness of targeted public health-care services, but these actions have been too incremental, too sporadic, and, well, just too small to be real game-changers.

While both the federal and provincial governments had the luxury of pumping money into health care over the past decade without running deficits, this will not be possible in the coming years -- the recent recession and rising inflation almost guarantee greater public-sector restraint. Meanwhile, the cost of "business as usual" is ballooning, with health care taking up between 40 and 50 per cent of program spending in the provinces.

We have two possible, contrasting approaches to health reform. One assumes that universal medicare has been a failure and that we need to build something else entirely, while the other argues that, building on the achievement of medicare, it is time to implement its second phase.

The anti-medicare approach goes like this: Given the impact of aging, we cannot continue to spend billions of taxpayer dollars on health care. It is time to be grown-up about this, and to make Canadians assume greater individual responsibility for health care by delisting services and imposing user fees and co-payments. This way, we can release the pressure on public budgets by funding more health care privately.

Moreover, since health care is a provincial responsibility, the federal government should reduce, or eliminate, federal transfers to the provinces, and allow them to experiment with private funding -- even if this means getting rid of the Canada Health Act. In effect, this approach to health-care reform assumes that the problem is on the funding side, and thus advocates replacing a tax-based pooling with private financing as the fix. Far from being a visionary, future-oriented approach, this is in fact a trip back to the past, to the era before the existence of universal medicare.

A half-century ago, as a critical first step to ensuring every Canadian had access to necessary medical services on the basis of need, rather than income, we reformed how our health services were funded. That transformation produced remarkable results. But further change is now needed to improve the quality and expand the range of services for Canadians. Accordingly, the sounder choice for reform is to provide more innovative, responsive, and integrated care, but to do so in ways that preserve the advantages of universal access under medicare. There are many ways to encourage this innovation, and none are really impeded by tax-based funding.

Single-payer administration of hospital and physician services has been "our ace in the hole" in terms of keeping administrative costs down. Private insurance is far more costly and administratively burdensome for both patients and providers. The two most costly health systems in the world -- in the United States and Switzerland -- have been built on private health insurance.

The federal role remains important. The principles behind the Canada Health Act and federal transfers not only ensure Canadians have access to insured health services on roughly the same terms, but also reduce regional inequalities through a national tax pool, and promote mobility through the portability condition.

What we don't need is yet another commission on health care. In fact, the opposite is true. A decade ago, a plethora of commissions and advisory bodies informed federal and provincial governments of varying partisan stripes. They had quite different recommendations on the delivery side, but they were of one view on funding: None recommended replacing single-payer administration with private health insurance, and none advocated the abolition of the Canada Health Act.

After extensive and multi-layered consultations, the Romanow Commission found that the majority of Canadians continued to believe in access based on need rather than the ability to pay. But Commissioner Roy J. Romanow urged the federal government to meet with the provinces and collectively provide direction on major health reforms to ensure better performance and future sustainability. While he felt that some money from Ottawa was necessary after years of underfunding, he said that money should be used to facilitate fundamental changes in governance, accountability, and service delivery.

In 2004, then prime minister Paul Martin agreed to an enormous increase in health care transfers to the provinces as well as an annual escalator of six per cent per year for 10 years. Perhaps this investment allowed him to avoid the conversation altogether.

Recent calls for yet another commission remind me of referendums on separation, and, particularly, some people's desire to keep holding them until they get the answer they want. In 1964, the Royal Commission on Health Services released a report that made recommendations for a public health-care system that were met by howls of outrage from many in the Canadian establishment because they were not the answers they wanted to hear. But the recommendations were supported by a majority of Canadians, and the report eventually forced then prime minister Lester B. Pearson's divided cabinet to decide.

The recent commissions have done their work. Now, it's time for our federal, provincial, and territorial governments to act, but in ways that respect the priorities and values of the majority of Canadians, rather than the interests of a few.

Gregory Marchildon is Canada Research Chair at the University of Regina and was the Executive Director for the Romanow Commission. He is also an expert advisor with EvidenceNetwork.ca, a comprehensive and non-partisan online resource designed to help journalists covering health policy issues in Canada.