Canada’s health care system is affordable

But to make it sustainable, we need to change the way we deliver services
Troy Media
December 8, 2011

Recently the Canadian Institute for Health Information (CIHI) released the latest figures on the country’s health spending. It provides a cool analytic antidote to a heated political issue. Health costs are not out of control. And the report’s findings remind us that the real issues have little to do with money.

Almost every day some politician or pundit declares that provincial health-care spending is massively out of control, eroding government’s ability to fund everything else. Our roads are full of potholes, our kids can’t do long division, and it’s all the fault of a rapacious health-care system.

Health spending actually falling

Several reports have suggested that health spending will inexorably rise to 70 or even 80 per cent of provincial government program spending in the next 10 to 20 years. The CIHI graph of provincial health-care spending over time draws a very different picture from that portrayed in our public debate. Health spending was fairly steady at 33 per cent of program spending during the early and mid-1990s. After 1997, it rose rapidly to 39 per cent of program spending in 2003 before plateauing there until 2008. It has been falling since.

Provincial health-care costs decreased on average from 39.3 per cent of program spending in 2008 to 37.7 per cent in 2010. In some provinces, like Ontario, the decrease was even more startling, from 45.5 to 40 per cent. In Saskatchewan, costs fell from 37.2 to 34.7 per cent while they actually increased in Nova Scotia from 42.4 per cent to 47.2 per cent



Of course, governments increased non-health-care spending during the recession as welfare, employment insurance and other costs rose. But CIHI forecasts provincial health-care spending will fall this year as a share of GDP from 7.8 per cent to 7.5 per cent.

It would be nice if those who spew fire and brimstone about rocketing health costs would read the annual CIHI reports. Then maybe we could get onto the three big issues that get little or no media attention.

First, we don’t have to spend a lot more money to fix the system. Most of health care’s problems – from long wait times to inadequate follow-up of chronic illness – are due to antiquated, provider-focused processes of care. The remedy? A high-performing, patient-friendly system. And, contrary to the ill-informed Canadian chin-wag consensus, this shouldn’t mean higher costs. To quote the 2001 Saskatchewan health-care royal commission, “better quality care almost always costs less.”

For example the referral route from family physicians to specialists has not changed fundamentally since the professional model was created during the Middle Ages. In Canada you can wait months to see a spinal surgeon. But 90 per cent of patients referred to Ontario spinal surgeons don’t need to have surgery. They may need physical therapies, medication, counselling or acupuncture. But they don’t need surgery and very few of them should even be seeing surgeons.

The solution? In Hamilton, 20 psychiatrists are working part-time with more than 100 family doctors, 80 mental health counsellors and dozens of other professionals. Urgent questions for the psychiatrists are answered immediately by cell phone. The psychiatrists also drop into the family practices every week or two where they see patients directly, discuss other cases with staff, and generally raise the already high standards of mental health delivery.

It’s well past time to change the practices of other Canadian specialists. All medical specialists and their teams should be working more closely with primary health-care practices. No Canadian should wait longer than a week for elective specialist input into her case.

Second, we should be spending more public money if it remedies private market failures. Justice Emmett Hall’s 1964 royal commission recommended public insurance for physicians because it would cover everyone and cost millions less to administer than a private system. The same argument holds for drugs, long-term care and home care.

Finally, we need to resuscitate our shrinking public sector. Health care increased its share of the public pie from 1997 to 2008 largely because government cut the size of the pie by axing other programs. For example, the feds eliminated the National Housing Program in 1993 and Canada’s spending on early childhood programs is the lowest of any OECD country. These policy mistakes have made a lot of people sick and applied pressure to hospitals and other health-care organizations.

Redesign delivery systems

According to the latest figures from the Department of Finance​, from 2000 to 2010 Canadian governments cut their incomes by 5.8 per cent of GDP, the equivalent of $94 billion. If we had cut taxes by only half that amount, all governments could be out of deficit by 2012. Or we could afford to pay for first-dollar universal pharmacare, long-term care and home care, as well as regulated child care for all parents who want it, free university and college tuition, 20,000 new social housing units a year, and a hike in the Canadian Child Tax Benefit to $5,000 per child.

Our health-care system is affordable. To make it sustainable, we need to complete Tommy Douglas​’s vision for medicare by changing the way we deliver health services.

Let’s set aside the shroud-waving about rising costs and refocus on redesigning the delivery system. Medicare remains as sustainable as we want it to be.

Dr. Michael Rachlis is an Expert Advisor with EvidenceNetwork.ca and a health policy analyst and an associate professor at the University of Toronto. EvidenceNetwork.ca is a comprehensive and non-partisan online resource designed to help journalists covering health policy issues in Canada.