Health Care Delivery In Canada

Gordon Gibson

November 2005

This topic we've had in the last couple of days is fascinating for a non-medical outsider because of a strange contrast.  The healthcare field appears to be extremely open to change in the field of technology or procedures or pharmaceuticals and yet it's so closed and fossilized in terms of things like finance, regulation, administration and labour markets.  So why should this be?  And why is it as others have put so well that we are stuck with this very strange philosophy that we're not allowed to spend our own money on our own health unlike any other country in the world?  I think these rigidities are all about politics, as Tom said, and when the smoke clears that's the reason we're here.  Indeed federal/provincial relations in this area, my assigned topic, are not about health at all, they are about cash and they're about politics.

In that context, I think this conference is a conference of extraordinary hope.  I say that first of all because of those who are here.  Many of you I know as dedicated front land practitioners.  The second reason for hope is the ideas that have been exchanged.  I'm not competent to assess the details of health system change that we've heard about this morning, but the visions of reform put forward yesterday by Preston Manning and Michael Kirby, Senator Kirby, I know will resonate with the public if the rest of us can find the right way to advance those thoughts, that's the challenge.  So I'm going to organize this talk as a series of messages that need to be taken to the public.

The first message is as simple as it is heretical, governments are no good at producing and delivering services, everyone knows this.  There's an old saying that if the government ran it even crime wouldn't pay.  Though with their drug laws they've certainly made private crime more profitable, that's another story.  Healthcare is in the issue – in the end a resource availability question and an allocation question.  We answer these questions in two ways in our society, both markets, one is private markets which are characterized by voluntary exchange, by competition, by transparency, by regulation by an honest and agreed on currency.  And then there are the political markets and that's where the healthcare system is stuck.  And the political markets are characterized by coercion rather than freedom, monopoly rather than competition, a distinct lack of transparency, governments today still go by their freedom of information dictated Emperor Diocletian in Rome 1800 years ago when he said, "It is neither right nor proper that you should know everything" it remains true today.  And the votes – the currency in use in a political market is not honest currency it's votes.  The political market is a terribly inefficient way to get things done and a guiding rule on social organization in my view is if you can keep some task out of the clutches of government do it.

So that leads to this observation, if healthcare were a free market situation we would not be here today.  There would be no problems of human resource availability the market would look after that, there would be no problem of finance; the market would look after that. There would be technical questions that every industry has but we wouldn't be here talking about the things we are talking about.  Why isn't there a free market in health?  Somebody observed yesterday that food is more important to daily life than healthcare, and we have a more or less free market in food.  There are no questions – conferences -about the food system.  But, you know, food and health are different.  Food requirements are relatively stable, similar in cost from person-to-person.  Healthcare by contrast is lumpy and episodic and terribly personal.  Most of us need relatively little in our lives until we get older but some need enormous quantities all their lives.  And there are two particular factors that make for a public involvement in healthcare which is going to be the case in Canada always.  One is a quirk of fate and that is catastrophic needs can hit any of us at any time.  And the Canadian notion of fairness states firmly that while lottery winners in the 6/49 sense should not be taxed, lottery losers in the catastrophic should be supported as required.

The second factor is a quirk of nature.  Care needs are concentrated in the elderly, the elderly have a lot of votes and they can mobilize a lot more from their kids.  There is always going to be a serious public place in the healthcare system.  It's easy enough though to design a universally accepted – accessible system that has minimal intervention which would include catastrophic insurance for everyone, some variation of the existing public pay system, universal access for all medically necessary matters but also include experimentation with such things as user fees or medical savings accounts or private insurance alternatives, and be primarily public sector delivery.  That of course is not at all how our system has involved, although Tommy Douglas clearly had the first element of catastrophic protection foremost in his mind.  Rather it has grown into a public monopoly through reaction to demographic factors such as the great increase in the age of death over the past century, technological progress generally and the political competition of parties and levels of government for votes.  Our current structure was built incrementally from the first hospital insurance and adding a bit here, a lot more there, a new regulation over there, the Canada Health Act, the gradual evolution of Pharmacare and so on.

That brings us to the situation we have today.  The current situation has very serious problems and it's not sustainable, we all know that.  Where we are today is a situation characterized by high public expectations, low public understanding of healthcare realities, with the exception of our individuals at the course, utterly terrorized politicians, frustrated healthcare workers and gridlock.  We know the gridlock can't continue we know the spending trends are already seriously distorting the ability of provincial, not federal, but provincial governments to look after other duties and this will rapidly worsen if nothing else changes so we know something will change.  The question is how to guide it.  And this can be assisted by an examination of the players and their motives.

Let's begin with the public; the view of the public is pretty simple they want the best possible care delivered now for free.  This is impossible, there have to be trade-offs.  It would be a very good thing if politicians started to say that in no uncertain terms and if the politicians won't say it practitioners should do so more loudly and more often than you already do.  Politicians are very afraid of this issue, they're afraid to take leadership. They know the facts but they fear that the first messenger will be shot.  In my opinion, the public is not stupid and would find some honesty on this question quite refreshing but then of course I am not currently running for public office.

The public is also the prisoner of prejudices in this field, the greatest prejudice is against two-tier medicine and there are two reasons for this.  The first is a deep vein of anti-Americanism in this country which can be mined by politicians, particularly in Ontario, and the second is a view that if the public delivery monopoly is broken, everybody but the rich will get second class care.  That's really what everybody is worried about here.  The first issue is easy to deal with as this conference has so wisely done by looking at examples other than the United States.  The second worry is harder to put to rest.  It would be foolish to argue that the rich will not get better care because they already do by going to the United State or having better access to the system one way or another and we know this.  Every bureaucratic system everywhere in the world finds a way to look after so called important people, that's a fact of life.  But the essential point here is to go beyond that and say we can design a public/private delivery mix that will credibly assure the voters, credibly assure them, that the ongoing "free" public system will be at least as good as it is now and almost certainly better.  That I think is where Senator Kirby has tried to go and that is the argument we have to make and I would say it's not a difficult argument.  Because politicians can point to the fact that they're elected by ordinary people and they are certainly not going to be foolish enough to allow the public healthcare standards for their constituents to deteriorate.

So if you take that base, and you add the new private money which will certainly enter the system the case is made as everyone in this room knows.  The trouble is the argument needs to be made by politicians.  They are the gatekeepers to reform, I don't know of a single major politician in this country, with the exception of Mario Dumont in Quebec, who is prepared to do this at the moment.  I can't underline this point too strongly, people want a good publicly paid Medicare system and any system that doesn't guarantee that is politically dead on arrival.  The alarmist logic for a single tier system is simple.  It's this, if the wealthy and powerful are allowed to leave the system it will be allowed to deteriorate, therefore, let us use the hostage theory force the wealthy and powerful to stay in the system by outlawing anything else.  That may be bad policy, it may be bad ethics but it's very believable to the ordinary person.  This public view has to be met and answered.  It cannot be ignored or we are not going to break out of the system we are in.

The next message is this; all of the players have to get real and as far as possible check their politics at the door.  Everybody in the system has politics.  The lowest level of politics is at the front line, the professional level, but most care workers are conscientious and competent, interested in the welfare of patients.  And these people, you people, are the reason the system works so well or as well as it does.  But even at this level there's politics.  In the professions there are questions of credentialing for immigrants and the like.  At the trade union level the healthcare unions know that the public sector in this country is massively unionized, the private sector is only lightly unionized, so the incentive is simple, do absolutely anything, say absolutely anything to convince the public that any system that does not involve a public monopoly will destroy the health system and be unsafe.  So naturally that's exactly what happens and the media feeds this back to the public and the public believes it.

The professions, particularly doctors, I say have a duty to speak out here, a duty of care to speak out.  Doctors should make this point, no, unionization and government operation of hospitals or whatever has zero to do with the preservation and safety of public healthcare.  Unions don't want to see the end of the public sector delivery monopoly but for the good of patients that has to happen.  Not the end of public delivery but there's got to be a new openness to private delivery.

The next class of players are provincial governments.  Now if it's possible to feel sorry for people who extract taxes from you, that's difficult. We should feel sorry for the provinces.  Under our constitution they have the responsibility for all social services including health and they can't push that responsibility down to the municipalities, they don't have the money, they can't push it up to the feds because the feds don't want it, you recall they rejected an opportunity to take over National Pharmacare a year ago, the provinces are trapped.  They – people demand more healthcare, must be supplied by the provinces, the extra money is in Ottawa.  For those who are at this conference not from Canada I'll give you a short vignette in Canadian place names.  It's well known to most Canadians that the City of Montreal is named after an Indian word meaning collection of huts.  New research has indicated that the place named Ottawa is named after an Indian word meaning collection of taxes.  Michael's not smiling at that one.

If you divide things between real world concerns and pure politics, at the caregiver level it's maybe 90/10 at the provincial level it's maybe 50/50.  At the central government level it really turns weird.  In Ottawa it's all about politics.  The feds do have a few real world concerns to be fair, drug certification, disease research, pandemics, statistical collection all of which are important, all of which deserve more resources.  They have another constitutional responsibility under Section 91.24 for the Indian people of this country which they increasingly attempt to offload onto the provinces.  In Alberta for example, the feds a couple of years ago stopped paying for Air Ambulance services from reserves to a 100 percent provincially paid hospital.

But apart from these areas, the feds have zero constitutional mandates in healthcare and yet they desperately want to be in the game knowing the huge voter concern.  So they've successfully convinced people, and I lay the blame for this very much on the media, that Ottawa has an essential role in healthcare, that is not the truth.  In delivery systems the feds are not a part of the solution, they are part of the problem.  They are the keystone to the current failing structure and the barrier to real reform, strong statement.  Let me give you an example, look at education.  In education in this country K to 12 is run exclusively by the provinces.  In international tests, Canadian provinces do very well in this world.  In terms of national standards which have no federal component at all there's good transferability among the provinces.  The education system works just fine with no federal intervention.  Healthcare could too, and it could experiment in ways that it can't now, that's what I mean by the barrier to real reform.  Because as long as you're caught in federal requirements to do things like this you can't try to do them like that in British Columbia or Newfoundland.

The political parties are part of the problem.  Politicians are fine people who have a great facility for speaking more clearly than they think often and none of the parties are prepared to talk honestly about healthcare.  And without openness to new ideas it's hard to get better results.  Indeed the insistence upon a mythical threat to healthcare from private delivery is one of the prime weapons that parties use against each other and therefore they are locked totally into a defensive mode and will be in the next election.  What's the hope?  I don't know.  I don't know how many of you have visited Parliament.  I visit it from time-to-time and I sit in the gallery, again not the Senate where I watch with great respect.  I do, I wrote a paper last year saying the Senate is far more valuable to this country than the House of Commons but I sit in the House of Commons.  And I look down at what goes on there and I think of the remark of the Duke of Wellington before one of his battles, which did not go well for him, and he was inspecting a regiment which had been hastily raised and this was a shabby slovenly bunch, ill-equipped, no morale at all.  And he turned – he reviewed this bunch and he turned to his aide and he said, "Sir, I know not what the enemy will think of these men but by God they terrify me."  Don't expect much out of Parliament.

The Canada Health Act is part of the problem.  It's vague; nobody knows what medically necessary really means though perhaps that's an opportunity.  And the public administration clause attempts and succeeds through the use of the federal spending power to impose the dead hand of government monopoly of delivery over a huge sector of our economy.  While wanting to control things, the feds have no interest at all in accepting responsibility. The Pharmacare story is very revealing.  A year ago, the provinces offered Ottawa an opportunity to take over one of the most visible and important healthcare issues in this country, a big deal, namely funding assistance for prescription drugs that are such an increasing and important part of our system.  Tempting as the visibility and political kudos must have been, Ottawa turned the offer down not wanting an actual operational responsibility like the provinces live with day-by-day.  Ottawa likes to talk about the need for national standards and accountability but in fact the accountability runs in a very straight line from the voters to provincial governments.  If the hospitals aren't working, if the emergency rooms aren't working, the voters know who to blame and it's the folks in Victoria or Edmonton or where ever.

In fact, Ottawa brings little to the healthcare need except money and even that of course is our money, but it's been a brilliant public relations coupe to convince Canadians that Ottawa is central to our healthcare system.  And the media finds the myth convenient because so called national stories are much cheaper to write than complex local stories.  But the media also love to play up federal/provincial differences.  And one of the ways out of this box I think, is for the premiers to start doing their job and hammer this message all the time, give up the tax points that you use to give us money for Medicare, give them up.  We will occupy that field, we will take responsibility for the full funding of healthcare and then get out of our hair.  That would marry accountability with responsibility which is always a good thing in governance design.  There are a couple of reasons why this don't happen – why this doesn't happen.  The six small client state provinces have never been able to annoy the feds who deliver so much money to them, and all of the provinces would rather have somebody else hit the taxpayer and then just hand over the cash.  But it really is a little silly, when you think of it, to send a lot of our money to Ottawa just to have it laundered and shrunk and sent back.

This won't change until one or more of the four large provinces, and Alberta and Quebec are the logical candidates, are prepared to stand up for local control.  Alberta can afford it, Quebec has just indicated it's bringing private insurance of some sort, but there's no major challenge to the status quo on the horizon.  And there's another reason why this won't easily happen, many, perhaps most Canadians, still see Ottawa as the guarantor of Medicare.  It's not true, but that's the belief.  The case must be made and continue to be made until Ottawa with its insistence upon monopoly state delivery of services changes that view, it's the greatest single enemy of a sustainable and affordable healthcare system, it's a good thing to say so.  It's easy to resolve without embarrassment, you don't have to repeal the Canada Health Act, you just have to look at public administration quotes in a much more flexible way to permit private delivery, but that won't happen without pressure.

So to summarize, we have a problem, we are at the moment prisoners of history and the status quo, the world is not coming to an end, the system is not yet breaking down but it will and the earlier we start reform the easier the transition will be.  And the way out in the Canadian context is quite clear in principle being a mix of private and public funding and mostly private delivery.  What to do about it?  Giving the solution is always the tough part.  A point like this again, I always think about a favourite story of a powerful U.S. Senator who was great speaker but a dreadfully nasty man and a bully to his staff.  He became completely reliant upon a brilliant speech writer, so much so that he wouldn't even read the speeches first.  But he also treated his speech writer badly and this gentlemen decided he would get another job and he did get another job and then he wrote one last speech for the senator.  And the senator was breezing along on a real stem-winder and near the end of the speech at the bottom of the page the writer had him say, "And now it is time to give you my solution to end inflation, world poverty, disease and gain peace and security in our time."  The senator turned the page, at this stage quite interested himself in the answer, and there were the words upon the otherwise blank page, "And now you SOB you're on your own."

Well I'm just about out of time so here are my thoughts, as Sir Humphrey might say.  The indispensable condition for progress is open discussion by politicians, professions and the media this conference is an important step.  People need the data and concepts and vocabulary to think and talk about this rationally, that's for those in this room and other experts to provide.  Professional associations, the CMA and others, have a special responsibility for this.  Preston Manning talked yesterday about issued-based campaigns, very hard for individuals to do.  Preston and a few did it with the Reform Party but it's very hard to do, it's much easier if associations can get their act together and do it instead.

Legal challenges of one kind or another will certainly probe for weaknesses in the existing structure.  This could be far more significant than might seem on the surface because public delivery is not a matter of law, it's a matter of a lot of deterrence, it's a house of cards, and a few little cases could bring it down, it's an interesting possibility.  And the provinces should take governmental leadership in this area because Ottawa will not.

Some province has to say, at some point, we are going to reform our healthcare system the way we think it should be.  We are going to make possible the laboratory of federalism to work across this country so each province can go its own way and then we'll find out what works best.  And we want you to send us the tax points required for that.  If you won't do that, we want you to continue sending the money anyway.  And if you won't do that, we invite you to come around to the next federal election and explain to our voters why they should keep paying their federal taxes.  This is hardball, there's nothing wrong with that in a good cause.  For in the end if no one else does anything, some provincial government will have no alternative but to reform the system somehow.  You can't have what you can't pay for and the current system is rapidly becoming unaffordable.  Medicare must be changed in order to save it, that's the future.  Thank you.