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Jeffrey Simpson's book Chronic Condition: Why Canada's Health-Care System Needs to be Dragged into the 21st Century was the winner of the $50,000 Donner Book Prize on Thursday night.

Those who govern and operate Canada's health-care system are finally facing facts. Myths are being banished. Reality is replacing rhetoric. Reforms, long discussed, are beginning to occur. Many more changes are still needed, but changes are happening, in part because the old prescriptions have been found wanting.

Health ministers, who used to quake at telling the truth (or perhaps didn't know the truth), now speak the unspeakable: Canada's health-care system, by international standards, is expensive but underperforming. An informed audience today will hoot off the stage anyone insisting that Canada has the best health-care system in the world – a comfortable staple of political speech-making not that long ago.

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The informed know that, in the Commonwealth Fund study of 2010, Canadian health care ranked sixth out of seven countries, with the U.S. last. Another Commonwealth Fund study, on the use of technology by family doctors, placed Canada ninth or 10th out of 10 countries in every category. OECD studies, the gold standard for number-crunching, show the Canadian system in the top five for per capita spending but with middling outcomes.

Governments, following the Romanow commission of 2002 and the federal-provincial accords of 2004, poured money into health care: $41-billion in additional funds, indexed at 6 per cent annually. A huge injection was, in Roy Romanow's words, to "buy change" or, in then-prime minister Paul Martin's language, to produce "transformative change" and to "fix medicare for a generation." It did nothing of the kind, as could easily have been predicted.

The money bought time but not change, or at least not nearly enough change to justify the cost. Big chunks of the money went to organized and mobilized providers – doctors, nurses and health-care staff. Their wages went up, but, because they worked as they had always done before, productivity (always hard to improve in health care) actually went down. Spending more money largely reinforced the status quo.

Even if governments unwisely wanted to try another Romanow-Martin fix and pour large additional sums into health care, the money isn't there. Ottawa and every provincial government, except Saskatchewan, is in deficit.

From 2004 to 2010, health-care spending increased about 7 per cent a year. That annual increase was much faster than economic growth plus inflation and population growth. Seven per cent, in the words of Ontario finance minister Greg Sorbara in 2004, was "unsustainable," although his government drove up health care by 7 per cent every year from 2004 to 2011, while the province's deficit mounted.

In province after province, health-care spending squeezed almost every other part of the budget – by stealth, because citizens didn't realize the yearly leaking of money from other programs to buy more health care. Perhaps because so much money was spent for such modest results, citizens now are apparently more skeptical that money is the answer. Asked in a recent Focus Canada survey by the Environics Institute about what's needed to improve health care, respondents chose efficiency over money 2.5 to 1. A decade ago, efficiency and money earned roughly the same level of response.

With economic growth slowed, the population beginning to age, the Romanow-Martin fix discredited and their fiscal circumstances strained, provinces are slamming on the brakes. From 7 per cent, the Canadian Institute for Health Information reports that spending is down to 3-per-cent annual increases. It might go lower still, what with New Brunswick and Newfoundland's freezing spending, Ontario's dropping its health-care budget increase to 2 per cent, and Alberta's wrenching it down from 9.5 per cent yearly over the past decade to 3 per cent.

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Less money means more innovation. When more money is no longer readily available, people have to use their brains instead of their bargaining power. And so, with varying degrees of speed, changes long discussed are happening.

Pharmacists and nurse practitioners are being given new responsibilities to deliver certain medical services at a lower cost. More family physicians are grouping together and working with other professionals. Physician and nursing wages are settling down to something like the inflation rate. At the margin, money is going into home care and long-term institutionalized care, the greatest need for an aging population. New systems are being introduced to curtail wait times, which, in Canada, are among the longest in the Western world. Provinces are negotiating collectively for a few generic drugs and slicing generic costs.

An imposing list of changes are still ahead, including properly financing seniors' drug plans through social insurance, creating a national drug formulary, dehospitalizing as much of the system as possible, introducing private delivery for certain services paid for by the state, and figuring out how to make the population healthier.

But expensive lessons have been learned about what not to do and tired rhetoric has yielded to a certain candour. For these advances, we can only be grateful.

Jeffrey Simpson, The Globe and Mail's national affairs columnist, is the author of Chronic Condition: Why Canada's Health-Care System Needs to be Dragged into the 21st Century.

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