Tommy Douglas, the father of Canadian medicare, speaks to a New Democratic Party convention in Toronto in 1965.Boris Spremo/The Globe and Mail
Canadians keep being told that we have one of the best health-care systems in the world. And we want desperately to believe that we do.
Since public health insurance came to Saskatchewan 50 years ago under the Co-operative Commonwealth Federation (and became fully national 10 years later), medicare has become a Canadian icon.
According to a 2010 Environics survey, 85 per cent of us ranked it as our most important national symbol, and myriad polls identify health care as our most important issue. In other countries, public health-care systems are important social programs; in Canada, medicare is who we are.
But medicare is like any 50-year-old – it is showing signs of wear and tear. The principles of risk-sharing and public organization remain sound, but the application of those principles is creaky. Talking about change, however, is difficult when it is wrapped up with the nation's self-definition.
Medicare is the third rail of Canadian politics: Touch it and you die. Political survival demands avoiding a serious debate. Instead, election campaigns usually consist of bidding wars among political parties promising to spend more on health care.
Deeper discussions get snuffed out immediately by accusations that critics harbour secret plans to bring "two-tier" U.S.-style health care to Canada. "Down there," former prime minister Jean Chrétien liked to quip, "they check your wallet before your pulse."
The U.S. comparison is a bogeyman – no Canadian public figure since medicare began has ever argued for U.S.-style health care. Why would anyone want it? The United States spends 50 per cent more of its national economy on health care than Canada, without getting 50 per cent better outcomes.
Put the U.S. example aside and instead compare Canadian medicare with other largely public health-care systems in the world: Alas, Canada's performance is only average at best when judged by money spent versus results.
Today, health care consumes 11.7 per cent of the gross domestic product and eats up 42 to 46 per cent of provincial budgets. In most years, health-care costs grow faster than provincial revenues, faster than population growth plus inflation and faster than economic output.
From 1998 to 2010, health-care spending in Canada rose by 4.7 per cent a year after inflation. No other program's spending increased remotely that fast.
Post-2008 recession, deficit-laden provinces are trying to keep spending increases much lower. Some, notably Ontario, are succeeding temporarily.
History suggests that periods of restraint are followed by explosive growth as pent-up demand for higher wages, more beds, more tests – more of everything – puts pressure on budgets.
Something has to give.
That something is almost everything else (except education) that provincial governments do. Though no politician would admit it, health care is stealthily forcing governments to reduce spending on everything from roads to justice, social welfare to the environment, child care to recreation. Cash-desperate provinces now earmark most of their gambling revenues for health care.
Meanwhile, the population is aging. More seniors will bring more financial demands – not some kind of "grey tsunami," but at least an additional 1 to 1.5 percentage points in cost increases per year. As well, Canada, like other Western countries, has entered an extended period of slower economic growth, meaning slower provincial-revenue growth. And the Stephen Harper government has announced that it will reduce the index for federal health transfer payments to the provinces from 6 per cent to 4 per cent three fiscal years from now.
No right amount exists to spend on health. Rich countries always spend more on it than poor ones, and Canada is rich. We could spend even more than we do – if we were prepared to tax ourselves and/or to continue to cut spending. But we need to debate the options, to have what some call an "adult conversation" about health care.
Among countries with public systems, Canada is in the top five spenders per capita from public and private sources. But it is far from being in the top five on any international survey on results, whether you measure outcomes, quality of care, wait times, patient satisfaction or other factors.
At best, international surveys show the Canadian system in the middle of the pack or lower – a 2010 study by the Commonwealth Fund, a U.S.-based health-policy research group, ranked Canada sixth out of seven countries, ahead of only the United States.
Looking at other countries with public systems, one is struck by how little Canadian medicare has changed, compared with what is happening elsewhere.
In Sweden, a country with a deep social-democratic tradition, health care has been blown open so that private and public providers compete for patients, with the state paying. In Britain, hospitals and other health-care institutions pay directly for doctors' and nurses' services. In Australia, a private system runs parallel to the universal public one, and people who make more than a certain income are penalized with additional taxes if they do not purchase private insurance.
None of these places, or other countries, has found the holy grail, but they have been willing to experiment and change beyond what has been tried in Canada.
Here, medicare has Cadillac costs but Chevrolet results. It's a system unique in the world – not for its excellence (although elements of it are indeed excellent, especially for acute care) but for its gaps: Medicare covers costs associated with hospitals and physicians; beyond that, we have a patchwork of private and public coverage. As the Organization for Economic Co-operation and Development unkindly but pertinently observed, in many respects Canadians have U.S.-style medicine.
Other public systems provide some or complete coverage for drugs, eyeglasses, dentistry, home care, nursing homes, long-term care. Canada does not. At 70 per cent, this country stands at the low end internationally of what share of health care is covered by the state.
We are told that medicare incarnates Canadian values. It does not, because every country with a public system agrees with risk-sharing and equity of access.
What is Canadian is the way we give effect to those values. No other country organizes and finances health care the Canadian way, and for good reason.
We have a system plagued by inefficiencies in too many areas, especially wait times that are the longest over all in the Western world.
Canadians also pay among the highest costs in the world for pharmaceuticals, and do not receive appropriate research investments in return from brand-name drug companies. Provinces, with Ontario and British Columbia in the lead, are trying to scale back drug-cost increases by ending rebates to pharmacists and lowering generic drug prices.
Still, Canada has the worst method for purchasing drugs among all countries with largely public health care: Provinces set their own formularies, then negotiate their own deals. Instead, there should be one national buyer and formulary, as in countries such as Australia, to take advantage of bulk purchasing on behalf of the largest number of consumers.
Also, each province has a seniors drug plan. These, predictably, are a hodgepodge, and costs are rising everywhere as the population ages. As the premiers suggested in 2004, there should be a national seniors plan – paid for in the same way as the Canada Pension Plan and attached to it, with contributions from Canadians, their employers and governments, in exchange for drug coverage (with deductibles) when they turn 67. Pay now, benefit later.
Otherwise, we will continue to put costs unfairly on the shoulders of the next generation. Medicare is based on fairness across society; it also needs to be based on fairness between generations.
Canada pays doctors and nurses handsomely by world standards. According to a 2010 OECD report, Canadian specialists had the highest ratio of remuneration to the average wage of 33 countries; family practitioners had the fifth. Some provinces are – and other provinces will be – in tough negotiations to scale back remuneration increases. And why not, given how well health-care professionals and hospital administrative staff have done?
How well is that? From 1998 to 2008, the cost of physicians' services jumped 6.8 per cent a year; half from higher fee schedules, half from higher volume of demand. Payments to physicians increased on average 9.6 per cent in 2008-09, ranging from 3.9 per cent in British Columbia to 13.4 per cent in Quebec. Nurses' incomes from 2000 to 2009 rose twice as fast (2.3 per cent after inflation) as the average wage of all workers (1.1 per cent).
The most dramatic surge came after governments followed the recommendations of the Romanow commission and, starting in 2005, poured vast additional sums into medicare: $41-billion.
The result was predictable. Big new contributions to a public system are going to be gobbled up disproportionately by the providers, in this case doctors and nurses and administrators. They are the most motivated and best mobilized to take the new money, which they did.
Physicians' and nurses' remuneration have to be held to the rate of inflation for a decade. The move to change physicians' pay to blended remuneration based on a mix of fee for service, salary and quality outcomes for patients should continue. In exchange for the large public subsidy for their education and the handsome remuneration they receive, physicians have to agree to work more hours (and in groups) that are convenient to patients rather than to themselves.
Patients, after all, are not organized. They arrive as individuals in the system, whereas the providers are organized in associations or unions, and have structured the system to their convenience over a long time.
Today, every government report on health care insists that the system must be "patient-centred." Every political speech uses the same rhetoric. If the system were truly "patient-centred," every official utterance about the system would not need to repeat the cliché.
The Romanow commission a decade ago naively argued that heaps of new money would "buy change." Instead, the money bought time, but little change. Wait times in five designated areas – cataract surgery, joint replacements and the like – did come down somewhat, but at a cost much too high to justify the results. More change actually occurred when funding was restricted in the mid-1990s.
Three objectives now beckon: to enhance quality, improve timeliness of care, and tilt down the cost increases. Achieving them will require changes to many aspects of the system, starting with de-emphasizing hospital care, wherever possible. A bed in a hospital, or a patient treated in emergency, costs more than care provided in clinics, nursing homes or even at home. Our system, originally built around hospitals, has to be "de-hospitalized" so that hospitals can do what they are best equipped to do: provide acute care.
As well, under the current system, hospitals struggle to handle as many patients as their budget allows. Instead, they should be rewarded for how many patients they see, and the outcomes that result.
The Canada Health Act, contrary to popular view, does not prohibit private delivery of health-care services. The act says only that health care has to be administered publicly; it is silent on how services are delivered.
Moreover, the civil servants who drafted the fact later wrote an interpretive manual (published for the first time in my book, Chronic Condition) explaining what each clause meant.
They wrote: "The Act cannot be interpreted to mean that services cannot be provided on a for-profit basis. It simply means that the organization, commission or agency that administers the provincial plan cannot record a profit on its operation."
As part of de-hospitalization, private clinics for repetitive surgeries and testing should be encouraged, just as private providers of long-term care, in-home care and nursing homes should be welcomed, provided that they are regulated and monitored by the state and can provide lower costs. The state should be agnostic about who provides service, as long as the state pays.
Observers of health care have championed for years the need for more nursing and long-term-care facilities. If we wait for cash-strapped governments to build them, we will be waiting too long, and far too many hospital beds will be occupied by the frail elderly, at great cost. Private-public partnerships should start immediately getting on with the job.
And if hospitals have unused capacity in operating rooms, as many do, they should be able to charge patients to have surgeries done more quickly in rooms that would otherwise sit idle – with the money earned put into the hospitals' budgets – and to bring patients from abroad to earn money.
Before any of these, and many other changes, can be considered, Canadians need to think about medicare as a program, not an icon. We need to understand its costs and what those costs are doing to other programs. As our population ages, we should begin to think about intergenerational equity, not just horizontal fairness.
Our system has undoubted assets and solid underlying values, but it is not meeting the value-for-money test. So we need to shuck off ideology and fear and open our minds to the changes that will make health care better.
Jeffrey Simpson is The Globe and Mail's national affairs columnist. This essay is adapted from his book Chronic Condition, published this month by Penguin Canada.