Expensive, outdated and mediocre Canadian health-care system needs urgent reform

by Maj (ret'd) CORNELIU E. CHISU, CD, PMSC, FEC, CET, P. Eng. Former Member of Parliament Pickering-Scarborough East As the COVID-19 pandemic winds down, it is becoming evident that Canadians are paying too much for too little health care. According to a recent study by the Fraser Institute "Less Ottawa, More Province, 2021: How Decentralized Federalism is Key to Health Care Reform" published on October 19, 2021, this is because by current legislation, the federal government prohibits the provinces from reforming an expensive and deteriorating system. COVID-19 has exacerbated two of the most important ongoing public policy challenges facing Canada: the deterioration of government finances and the underperformance of our health care system. The two problems are related as the cost of Canada's inefficient health care system continues to grow over time, consuming a larger share of government resources and putting increasing pressure on public finances. Provincial governments are responsible for providing health care services, but federal government policies play a crucial role in shaping how health care is financed and delivered across the country-and not always positively. Specifically, the Canada Health Act, established in 1984, governs the way the federal government transfers payments to the provinces and territories in support of health care, and uses the threat of financial penalties to discourage provinces from experimenting with policies and innovations. An extension of previous federal laws related to provincial financing of health care, the Canada Health Act (CHA) of 1984 set the terms and conditions upon which Established Programs Financing (EPF) funding would be contingent, and created provisions for withholding transfers if they were not met. The Canada Health Transfer (CHT) set the terms and conditions under which provincial governments receive federal health transfers; they remained in place when the EPF was replaced by the Canada Health and Social Transfer (CHST), and they remain in place to this day. To date, the federal government has not withheld transfers due to noncompliance. However, the threat of withheld payments is almost certainly a constraint on provincial health policy action. In essence, there is a need to modernize the Canada Health Act and that should be a priority for the federal liberal government. Unfortunately, while economic issues, particularly inflation, are on the fast track, the government seems to be more concerned with international issues, putting this essential service for Canadians on the back burner. We need to be clear and blunt that as of today, there are two major problems that have either emerged as a result of, or been exacerbated by, the current system of federal health transfers. The first of these is that as the population ages, almost all projections suggest that health care costs across the country will rise significantly. Recent research projects substantial growth in age-related health care spending in the years ahead. Secondly, a significant body of evidence suggests that, despite sustained spending growth, Canada's health care system is underperforming relative to peer countries with universal health care systems. These facts raise important questions about the sustainability of our current approach, and suggest the need for policy reform to make Canadian health care spending more sustainable in the medium and long term. However, the pressure that rising health care spending is placing on provincial budgets is not the only evidence that points to the need for meaningful reform. Also important is the fact that, despite what by international standards are high levels of spending on health care, Canada's health care system underperforms relative to several other countries with universal health care systems. Despite very high expenditures, Canada ranks 26th out of 28 in the number of doctors (2.8 per 1,000 people); 25th out of 26 in acute care hospital beds (2.1 per 1,000) and 24th out of 28 in psychiatric beds (0.4 per 1,000). Canada ranks 21st out of 24 countries in the number of MRIs (10.5 per million of population); 22nd out of 26 in CT scanners (15.2 per million) and 17th out of 24 in PET scanners (1.6 per million). Canada's medical wait times are the longest in 10 comparable countries with universal health care systems that are members of the Organization for Economic Co-operation and Development (OECD). While Canada ranks close to the average of high-income OECD countries with universal health care for the rate of doctor consultations and CT scans, it performs poorly on other indicators. In particular, Canada reports the lowest degree of hospital activity (as measured by curative care discharges) 12 per hundred thousand populations. In conclusion, as of today, Canada has one of the most expensive universal-access health care systems in the OECD. However, its performance in terms of availability and access to resources is generally worse than the average OECD country, while its comparative ranking in terms of use of resources and quality and clinical performance is mixed. The data presented in the above Fraser study is supported by separate analyses from the Commonwealth Fund, which show that in several areas of health system performance Canada underperforms peer countries despite its high expenditure levels. Clearly, there is an imbalance in the performance of our health care system, given the relatively high amount spent on provincial health care systems. The question for federal, provincial and municipal politicians, is how can we improve our health system performance and outcomes without spending more money to do so. In my opinion this should be the primary focus of any politician truly interested in the wellbeing of Canada's citizens, not other political fantasies. What are your thoughts?