Memo to Canada's premiers and health ministers as you move toward a moment of truth: Your health care debate is on the wrong road.
Instead of cost containment, government should focus on the health care industry as a source of wealth creation, exports and 21st century jobs for Canadians. Such a focus on the upsides would mitigate many of today's downsides and, who knows, it might better the national discourse on this topic.
Consider two facts. Fact one, Canada has attributes that could position it as a world leader in health product and services exports. Canada has, more or less, a single-payer (albeit balkanized) system, which provides economies of scale that could drive development of a domestic export industry. It has first-class health education, researchers and delivery systems. It is next door to the most prolifically creative market for health products, services and innovation. It is well respected. And its taxpayers are about to make a mind-boggling investment in this industry, estimated at $1.5-trillion over the next 10 years.
Fact two, the health industry is in the midst of a once-in-a-lifetime information technology-driven innovation wave.
Historically, IT spending by health institutions and professionals has been tiny in comparison with other industries. Today, industry leaders agree that expensive IT initiatives such as the electronic health record (EHR) will improve care while cutting costs. The EHR in turn will generate rich databases for population-based health research. Bioinformatics, a hybrid of computing, mathematics and microbiology, is now the basis of research in cell behaviour. The IT-based growth opportunities are enormous, but the time is now. In a few years, laggards will not be on the bus.
The payoff can be huge. Health is a $1-trillion and growing global business and half of that is in the United States. As emerging economies such as China and India ramp up, so will their health spending. Meanwhile, Canada and its provinces are in the early phase of a multibillion-dollar series of investments to create electronic health records, digital diagnostics, next-wave biotech, integrated patient care, and other such systems designed to simultaneously improve outcomes and reduce costs.
You'd think there'd be a pony in there somewhere, wouldn't you?
Quite the contrary. Canada spends nearly 10 per cent of its gross national product on health. Yet, according to a study led by distinguished Genome Canada chair Dr. Henry Friesen, we run a trade deficit of $6-billion to $8-billion a year in this industry, which translates into 60,000 to 80,000 private sector jobs in foreign countries — mainly the United States. Not only should these jobs be here, Canada ought to have 100,000 more people producing health-oriented products and services for customers in around the world.
Instead, it gets worse. Not only do Canadian taxpayers routinely send their health care dollars to other countries, they also subsidize the creation of intellectual property assets for global product and service vendors. Health technology initiatives costing tens of millions of dollars in British Columbia, Alberta, Ontario, Quebec and elsewhere, hire IT vendors to create state-of-the-art tools and capabilities (like a province-wide pharmaceutical system). Taxpayers often pay a premium for such technology innovation. Yet rarely does the government's contract require a return on investment to taxpayers if the vendor uses the innovation in foreign markets.
Even more rarely, if ever, does the contract require that the vendor turn the innovation into a sustainable Canadian-based business, with Canadian jobs, to service the global health marketplace.
Meanwhile, we give $500-million subsidies to the auto industry, which suffers from a capacity glut in North America and globally.
Fixation on cost reduction, combined with rivalries between the federal and provincial governments, among provinces, and among institutions within provinces, means that health decision makers fail to see the industry growth opportunity forest for the "but our needs are different" cost containment trees.
To put it simply (some might say simple-mindedly), if the premiers, health and economic development ministers got together and decided to turn health into a Canadian growth industry, many things would change fast. Sure, they'd still need to handle cost issues, jurisdiction, accountability and the rest. But they'd also conclude that it's in their interest to collaborate.
Imagine: Two, four, maybe even all provinces and territories might get together on the procurement of key technologies to create economic development incentives (and rules) for suppliers (and maybe cut cheaper deals in the process). They might mandate a faster and more market-oriented design of the electronic health record infrastructure so it could better service Canada's biotech industry. Perhaps they'd rejig tax incentives and education system priorities to favour health industry entrepreneurship and growth. Or maybe, as Dr. Friesen suggests, they'd eliminate the "perverse incentives" of public systems that penalize (e.g. cut government subsidies to) any institution that profits from a successful commercial (e.g., export) initiative.
Everyone seems to agree that the system doesn't work. More money is needed, but it's not enough. We must change the way we deliver health services. Information technology, based on nationally agreed standards, is a big part of the answer.
Beyond these points, the consensus fractures into bickering about jurisdiction, control, privatization and similar matters of little interest to anyone other than politicians and bureaucrats. It's time to cut a fork in the road and choose an entirely different path.
David Ticoll's new book is The Naked Corporation: How the Age of Transparency Will Revolutionize Business, written with Don Tapscott.
