Whither the health debate?

by Alex Paterson. Posted April 25, 2012


The current federal health accord expires in 2014. Most expected that, by now, we would be entering a period of protracted wrangling over what would replace it. Instead we face something of a void.

In December 2011 the federal finance minister unexpectedly – and unilaterally – announced a surprisingly generous new offer to the provinces: continued 6% annual increases in federal transfers for three years after the current health accord ends, after which transfers will be pegged at the rate of nominal GDP growth with a guaranteed base of 3% a year.

This money comes with no strings attached. The federal government seems to have abandoned the semblance of a policy role in healthcare, beyond its fiduciary responsibilities to aboriginal health (enshrined in the Constitution), its responsibility for military healthcare, its funding of health research, and its role in drug approvals.

What does this mean for us, the consumers – and ultimate financers – of healthcare in Canada?

The healthcare authors in our book, The Canada We Want in 2020, writing before the December 2011 announcement, all agreed that the there was an important leadership role for the federal government in healthcare. In particular, they suggested that an active federal government, acting in a sensitive and collaborative mode, could help address many of the core challenges that our system faces. These include:

  • addressing the disparity in care across provinces/communities (developing, en route a meaningful set of common indicators);
  • stimulating a process of modernization so that our healthcare system better addresses current needs (such as chronic rather than acute care and addressing the high cost of outpatient drugs/the need for a national pharmacare programme);
  • ensuring better and more consistent evaluation of which procedures should be funded (evidence-based not media-driven decision-making);
  • institutionalizing a culture of innovation in healthcare;
  • placing a clear focus on healthcare outcomes, within a systems approach, rather than concentrating on inputs and procedures;
  • helping to forge a societal consensus on paying for healthcare and providing leadership on diversified revenue sources.

This pro-federal leadership viewpoint is also espoused in a March 2012 Senate report entitled, Time for Transformative Change: A Review of the 2004 Health Accord. This largely unpublicized report notes: “…..there is a need for federal leadership in promoting healthcare reform across jurisdictions.” (p. 83).

Apparently, the federal government disagrees. All these deep and difficult challenges will now be left to the provinces. It has therefore provided a swift answer to the question posed in our volume by Philippe Couillard, physician and former Quebec Minister of Health: Does [the federal government] want 2014 to be a low-profile rubber stamping event or does it wasn’t renewal of our health system to be part of its legacy?

For if renewal does take place – and that is a big if – it must be the provinces that take the lead (and thus the glory). Whether they will be capable, or willing, to do this remains to be seen. The challenge is all the greater since many of the problems of healthcare, such as inter-provincial disparities, may actually be exacerbated by the new federal stance. Under the new arrangements, federal funding will be allocated on a strict per capita basis across the country. (At present it is a mixture of per capita payments and tax points which means that certain provinces, notably Alberta, receive much less per capita than others). The new arrangements could have a negative impact on those provinces with a higher proportion of older – more expensive in healthcare terms – Canadians.

Though Canada’s health system scores well on important indicators (for example, we are above average on life expectancy at birth and at age 65, though dismally below average for the aboriginal population), ours remains one of the most expensive systems in the world. Health spending accounts for 11.4% of GDP, almost 2% above the OECD average.

Sadly, the problem of financing healthcare has not miraculously disappeared with this announcement. Increasing amounts of money still need to be found and if new sources of revenue are not identified (for example, the type of social insurance premium that our author, Mark Stabile talked about in his piece), healthcare financing will continue to squeeze other priorities in both federal and provincial budgets.

Neither have the severe problems around First Nations’ healthcare been resolved. The federal government has recently announced that its National Aboriginal Health Organization will cease to operate by June 30, 2012. It is not year clear what path has been chosen for moving forward in this area.

Maybe, though, the provinces will surprise us. Now that their energies need no longer be wasted on battling the federal government on healthcare, perhaps they will be put to better use innovating, modernizing and refocusing.  Time will tell. Polls suggest that most Canadians still want a federal role in health. But, regardless of who is taking the decisions, our contention at Canada 2020 is that the policy issues around healthcare for all Canadians must remain firmly in the spotlight.