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Nothing matters more, individually or collectively, than our health. Regardless of political allegiance, there is near unanimity that a universal health system is a good thing – for reasons of economics and social justice.

That's why every Western country save one has a universal system. When it comes to health care, only the United States is morally bankrupt and economically inept.

Canadians take pride in besting the United States on the health front, but it is a hollow victory. The reality is that every other developed country has universal health care that is better, fairer and cheaper than ours.

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We are big on grand pronouncements such as, "Medicare is what defines us as Canadians." But we are laggards on the practical side.

Canadians want care that is appropriate, timely, accessible, safe and affordable, from birth until death. Yet our system is failing on virtually all those measures. Why?

For starters, we lack vision and goals. Canadian health care is a $200-billion-a-year enterprise with no clear goals and a dearth of leadership.

We talk endlessly about the sustainability of medicare but have no idea what we want to sustain.

Our medicare model is a relic, frozen in time. Tommy Douglas's role in shaping publicly funded health insurance for hospital and physician care is celebrated, mythologized even. But we conveniently ignore that medicare was designed to meet the needs of 1950s Canada.

In 1957 – when the program became nominally national – the average age of Canadians was 27. Health care consisted of acute, episodic care: going to the doctor for treatment of an infectious disease, or to the hospital to give birth, have surgery or die.

Today, the average age of Canadians is 47. The technological advances of the past half century have been dizzying. The vast majority of our care needs are now for treatment of chronic illnesses.

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Neither the model for delivering care nor the insurance payment model has adapted to the new reality. You can't deliver modern health care with a 1950s model.

So, how do we drag medicare, kicking and screaming, into the 21st century?

Our favoured response has been to throw more bodies and more money at problems. The solutions need to be more fundamental, and come on two levels: funding and delivery.

Let's start with delivery. Action is required in five broad areas:

Primary care: We need to essentially take our hospital-based care system and turn it on its head to make community-based primary care the focus. We need to move away from an acute, episodic care model to a chronic care model. Every Canadian needs a medical home, a central co-ordination point for their care – preventive, acute and chronic – and an electronic medical record. And care should be delivered by teams, not individual practitioners, due to the complexity.

Drugs: We need to extend universal health coverage to prescription drugs. Currently, through a patchwork of public and private schemes, about 22 million Canadians have drug insurance; it should be 32 million. A public plan need not pay for everything from Aspirin to Zyprexa, just the essentials. Quebec has demonstrated that a universal prescription drug program – a mix of public and private insurance – is feasible and affordable.

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Homecare: We need to treat people where they live, in the community, not in expensive, soulless, germ-ridden institutions. Too expensive? Not if it's an alternative to hospital and nursing home care. For example, there are currently 7,500 Canadians living in hospitals – meaning they have been discharged but have nowhere to go – and that's the tip of the iceberg.

Social determinants: We need to invest in prevention efforts, particularly for socially disadvantaged and marginalized groups such as aboriginal people. Let's stop pretending that health is merely a medical issue, and spending as though it were. Education, housing, income and the environment are essential to good health. A whole-of-government approach is required.

Quality: Safe, prompt and effective must be the guiding principles for care delivery. For the most part, these are engineering and administrative issues, not medical ones. Care is rationed in every country. You can ration by creating financial barriers, as they do in the United States, or you can ration based on results – which ensures everyone gets basic, effective care. Quality care is cheaper in the long run.

Reforming the delivery of care is the easy part. In Canada, there is no question that funding is the Gordian knot.

Spreading risk – and health costs – across the entire population, as we do with medicare, is a good model. But there is an essential element that is missing that undermines medicare: a failure to define clearly what is covered by public insurance and what is not.

Canadians have to accept that public health insurance covers only the basics. At the same time, those who oversee the system have to recognize that physician and hospital care is not sufficient in the 21st century.

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We need to expand the areas medicare covers – into drugs, homecare, long-term care – while at the same time limiting coverage across the board to the essentials.

Universal coverage is not a synonym for unlimited, open-ended coverage. There are choices to be made. They include:

•As stated already, defining clearly what is covered by medicare and what is not;

•Paying only for what works: There are a lot of interventions that are of dubious value or that are not cost-effective. They shouldn't be covered by public insurance;

•Paying a lot more attention to patients with complex needs because they drive costs. One per cent of patients account for 25 per cent of costs, and 5 per cent account for half of all spending;

•Instituting a means test: An equitable system does not mean you have to provide equal services to all at equal cost; user fees and co-payments are not necessarily unfair, but these approaches have to be used smartly;

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•Regulating rather than outlawing private insurance and care. One of the most important lessons we have to take from Europeans is that we need a combination of a well-regulated private system and a well-managed public system.

The so-called public-private debate is the third rail of Canadian health politics. But it's a false dichotomy.

Every health system worth its salt has a mix of private and public delivery and payment. In every country, including this one, most delivery is done by private providers. (That includes not-for-profits, for-profit businesses and independent contractors such as doctors.) On the funding side, the split is usually in the 70-30 to 80-20 range, public-private. The only unique feature of Canadian medicare is the bifurcated payment system. Hospitals and doctors are 100 per cent publicly funded. Other services – drugs, homecare, long-term care, dental – get between 0 and 50 per cent public funding.

The question is not whether or not we have private and public care. It's getting the mix right.

There are things private enterprise does well. There are things that public and non-profit enterprises do well. Let's be pragmatic and benefit from both, as most European countries do. We need to pay much more attention to equity – making sure everyone is cared for – and less to who is delivering the services.

Implementing these changes will, of course, require leadership. But there is nothing radically new in these proposals. The real challenge in Canadian health care is implementing what we already know is needed.

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Everyone has a role to play: Ottawa, the provinces and territories, health professionals, allied workers, labour, business, consumer groups, patients and citizens. But they all have to put a little water in their wine – and whine a little less.

Reform is going to happen only if the political environment changes, if we stop shouting down every proposal for change because it threatens vested interests. It's time for the interests of patients – and society more broadly – to rule.

We don't need a values debate. We don't need more tiresome private-public rhetoric. We don't need Chicken Little screaming that medicare is unsustainable. We need a debate about structure and funding and priorities.

Let's be frank. For many years, we have failed to live up to our responsibilities. We have been lazy and we have been profligate in our spending.

But there is reason for optimism. The public isn't just ready for some change – the public is demanding it.

It's time to stop talking and start acting.

Adapted from the Conference Board of Canada's 2012 CIBC Scholar-in-Residence lecture in Ottawa on Wednesday night.

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