That takes care of the international comparisons and shortcomings in care delivery. What about administration of the $228-billion-a-year health system? “I’ve been struck by the lack of leadership, co-ordinated management, accountability, and responsibility—and, yes, needless waste,” Turnbull said. “Worse, we allow staggering inefficiency, ineffective management processes, incoherent decision-making and practice variations that undermine quality and safety.” Despite it all, he remains optimistic. “I do believe this can be changed ... that we can create a better health-care system in the future.”
Turnbull has a diagnosis and a prescription. It begins with getting back to basics. Medicare—and other social programs—were created to address social inequities, to make good health achievable and affordable for all. Yet today in Canada there is “devastating and epidemic health inequity”—and it has become a major driver of health costs. One way to address inequality in health-care delivery is to ensure all Canadians have access to a basic level of prescription-drug coverage, a “glaring failure” of medicare, Turnbull said. Similarly, there needs to be a massive shift in approach (and resources), from the 1950s-style illness-care system we have now to a twenty-first-century health system that emphasizes chronic care and prevention.
In his time as CMA president, Turnbull championed this transformation. He created a blueprint, a document titled Health Care Transformation in Canada: Change That Works, Care That Lasts. It’s by no means perfect, but it’s a start. It does not merely advocate shoring up the system that is eroding but rebuilding it from the ground up—all the while keeping the foundation, the public insurance model. As Turnbull told his CMA colleagues, “Leadership demands vision to see the path before us, the courage to take it and the strength to follow it.” Not just hope, not just words, but purposeful actions.
Is Canada’s public health-care system financially unsustainable?
It is often stated that Canada’s health system is unsustainable—a vague, undefined term that is used as a synonym for unaffordable. The problem is the unsustainability argument is based on a few dubious assumptions:
that annual spending will continue to grow at the same rate as in the past, if not faster;
that the aging of the population will actually accelerate the spending increases; and
that nothing can be done to reduce spending. This, in turn, assumes that nothing can be done to change the way we deliver health care or to keep people healthier longer.
In short, it is a pretty cynical world view. And, more importantly, concrete solutions are rarely proposed to alleviate the problem, other than to privatize more health services. Philosophical arguments aside, doing so does not reduce overall costs but merely shifts them from the collectivity to individuals, from public insurance plans to private ones or, worse yet, to out-of-pocket costs. What this dreary set of assumptions does do, however, is remind us of one of the major failings of Canada’s publicly funded health system: we do very little planning and analysis, especially of a financial nature. That’s why a 2013 report from the Canadian Institute of Actuaries was a welcome contribution, albeit a modest one.
The CIA (the actuaries, not the US spy agency) undertook a straightforward task: to create a model for projecting future health-care costs. They chose the province of New Brunswick as an example of how that model could be used. The limitation was that the modelling exercise examined only steady-state health-care costs—meaning costs based on the assumption that there would be no changes to health-care coverage or financing, and no major changes in the economic environment. But this was nonetheless useful because it provided some concrete data about what health spending would look like if all things remained the same. In this analysis, health costs were predicted to rise 4.43 percent annually until 2020, just as they had done in the previous decade. Practically, that meant the provincial health budget would increase to $4.6 billion in 2020 from $2.8 billion in 2009. Per-capita costs would rise to $5,976 from $3,711 in that same period. Put another way, at the time of the study it cost about $75 a week to provide health care to each of the 750,000 residents of New Brunswick. By 2020, it will cost $115 a week. (That is slightly above the Canadian average.)
Is that unreasonable? Unsustainable? The actuaries’ report didn’t answer those questions. It just crunched the numbers. But data make for a much more concrete discussion than rhetoric.
One of the more interesting sets of numbers was a breakdown of the 4.43 percent annual increase. Based on data from the Canadian Institute for Health Information, the actuaries said the rise in health costs had three main elements:
Health-care inflation accounted for 1.99 percent of the increase, money that goes mostly to wage increases. In fact, about two-thirds of all health spending is for labour.
Aging, which is often cited—wrongly—as the principal reason health costs are becoming unsustainable, accounted for 1.27 percent of the annual rise in costs. This is because per-capita costs increase as people age.
Increased utilization made up the rest of the cost escalation, at 1.10 percent. This is a reminder that people of all ages are using more services, not just seniors.
The report also estimated projected annual increases in major categories, including hospitals, physician services, drugs and other institutions (like nursing homes). Overall, the numbers are sobering. Without changes in how we deliver health care, per-capita costs will have tripled from 2000 to 2020: to $3,599 from $1,219 for hospitals; $1,105 from $354 for physicians; and $452 from $104 for drugs.
These data give some ammunition to those who argue that the system is unsustainable, at least superficially. But what they should really do is provide impetus for reform. Canadians don’t need a discussion of how to rein in costs, because that usually results in little more than trimming around the edges. What we need to discuss is delivering care differently, including actuarial modelling of new approaches.
A public insurance plan should, like a private plan, ensure that it has enough money to provide insured services. But the first crucial step is determining what those insured services are. Those are political and societal choices. The accounting exercise comes later.
Medicare needs a culture change
“Canada is a country of perpetual pilot projects,” Monique Bégin famously wrote in the Canadian Medical Association Journal. The former minister of health and welfare pithily described a long-standing, frustrating problem in our medicare system: we have solved every single problem in our health-care system ten times over, but we seem incapable of scaling up the solutions.
This inability to learn, to share and embrace innovation across jurisdictions, is explored thoughtfully in the 2015 report of the Advisory Panel on Healthcare Innovation. The panel, led by David Naylor, a physician and former president of the University of Toronto, emphasized that “Canada has no shortage of innovative health-care thinkers, world-class health researchers, capable executives, or dynamic entrepreneurs who see opportunity in the health sphere.” But innovation is stifled by the structure and administration of the health system, and by a dearth of leadership. Medicare—the name we give our publicly funded health-insurance scheme—is, in fact, not a system at all; it’s a collection of fourteen federal, provincial and territorial programs