Having now had time to analyze the impact that the federal government’s take-it-or-leave-it funding offer will have on the delivery of health care, Canada’s premiers gather this week in an attempt to forge a united response to Ottawa’s plan.
It will not be easy.
On the eve of the talks, conference host B.C. Premier Christy Clark is demanding changes to a federal proposal she says does not factor in the higher costs of health care for seniors. And while her demographically weighted solution to the problem will be music to the ears of some provinces, it is certain to be met with fierce resistance by jurisdictions such as Alberta that would pay a steep price.
Although Ms. Clark’s position certainly threatens any hope of the premiers emerging from their meetings with a consolidated position on the new funding formula, it is not the only area in which there is expected to be deep disagreement.
While some provinces regard the payment scheme that Finance Minister Jim Flaherty presented the provinces in December as merely the starting point for negotiations on a new health-care funding model, others accept Ottawa’s view that it is a non-negotiable offer and that the best that can be hoped for is some tweaking to address unintended problems of the nature Ms. Clark has outlined.
The talks are certain to highlight just how radically health-care policy in Canada is about to change under the Conservative government. After decades of complaining about the strings that Ottawa has attached to health-care funding, the provinces will now be able to do what they want with that money.
But with that freedom comes more responsibility and the ever-increasing pressure that rising health-care costs are putting on budgets.
To that end, the premiers are expected to talk about joint strategies they can undertake to help slow some of those cost drivers. Those discussions will centre around initiatives that individual provinces have taken to reduce expenditures (innovation success stories), new funding models that are helping to shrink outlays, and ways to improve quality in the system that are also leading to savings.
Saskatchewan Premier Brad Wall and Ontario Premier Dalton McGuinty intend to press for an innovation fund that would help underwrite initiatives that would produce efficiencies in the system, such as electronic health records.
But before the first ministers get there, there will be more talk, some of it no doubt heated, about the funding model Mr. Flaherty unveiled to the premiers as a fait accompli.
The current health accord with Ottawa expires in 2014. Mr. Flaherty presented the premiers with a plan in which annual increases from the federal government stay at the current 6 per cent until 2017 and thereafter are tied to inflation and economic growth until the pact expires in 2024.
Almost immediately, the new deal that allocated funds on a per-capita basis rather than giving poorer provinces a disproportionate share of federal health dollars was hailed by growing and economically robust jurisdictions like Alberta, which will be the biggest winner under the revised formula. Provinces such as Quebec and Ontario, among others, were not as thrilled as they are likely to receive proportionately less money than they do now.
Ms. Clark, who will chair the first ministers’ meeting, concedes that there are varying views among the premiers about Ottawa’s offer.
“Some think of it as a starting point for negotiations, and others look at it and see it as a position that can be shaped and improved but not through a full-blown many-year-long negotiation,” Ms. Clark said in an interview. “Personally, I think we need to be focusing on a decision that we can shape.”
On that note, the B.C. Premier is going to table a proposal that seems fair on the surface but is certain to engender resistance from some of her colleagues, mostly notably Alberta Premier Alison Redford.
While B.C. is pleased the new funding model leaves all decision-making on how it will be spent up to the provinces, Ms. Clark says it does not recognize demographics, which are a huge cost driver in the health-care system.
“I think the consequences of the new model, unintended as they are, are going to be severe for seniors all across the country,” Ms. Clark said. “The decision to go to straight per capita regardless of age represents a massive shift in health-care dollars away from senior citizens. We can’t sustain a health-care system across the country under those circumstances.”
As such, B.C. would like to see the funding weighted to take into account senior citizens leaving snowbound outposts in Alberta in retirement for milder locations in its province.
In Canada, people between the ages of 65 and 75 cost the health-care system nearly triple what those under 65 do. Seniors 75 and over, meantime, are twice as expensive as those between the ages of 65 and 75.
“Straight per capita means you’re giving a lot less money to provinces where seniors reside and a lot more to provinces where they don’t,” Ms. Clark said. “So in B.C. where a lot of people move as they age we’re going to see a growth in our allocation under the Canadian Health Transfer (CHT) of .05 per cent. In Alberta, they’re going to see a growth in CHT of about 50 per cent.”
Officials in the B.C. Ministry of Health have run numbers of what a new health funding formula might look like if it was weighted for demographics. Not surprisingly, B.C. (along with Quebec and New Brunswick, among others) would do much better, and provinces such as Ontario and Alberta would be worse off.
This is why Ms. Clark’s proposal is likely to be one of many difficult discussions Canada’s premiers are going to have at this meeting.