In a year-end interview with the CBC’s Rosemary Barton last month, the prime minister restated his view that a “long-term conversation about increasing funding to health care” should happen “when the pandemic’s over.”
A few weeks later, with the Omicron variant spreading fast, it’s even harder to know when that conversation should start.
But an unofficial debate about health care in Canada is already taking shape — between demands for more public funding on one side and calls for a “greater role for private health care delivery” on the other.
With the highly contagious Omicron variant and a sizeable population of unvaccinated Canadians threatening to swamp hospitals, health care capacity is the concern of the moment.
Canada is hardly unique in that respect. Thousands of surgeries have been cancelled in the United Kingdom since the pandemic began. But the strain on the Canadian system was also foreseeable. In fact, Frances Woolley, an economist at Carleton University, predicted that COVID-19 would expose the fragility of the system back in March 2020.
As Woolley wrote, Canada has the second-lowest number of acute care beds per capita among nations in the Organisation for Economic Co-operation and Development (OECD) and nearly all of those beds tend to be filled.
While the total number of acute care beds has declined broadly across advanced economies over the last 50 years as a result of changes in technology and care, the especially low number in Canada can be traced to “a failure of funding levels to keep up with population growth,” Woolley argued.
Danyaal Raza, a family physician in Toronto and a former chair of Canadian Doctors for Medicare, made a similar case last fall. He said that when it comes to health care costs, Canadian governments are picking up a smaller share of the bill than governments in many of our peer countries.
The case for spending more
That’s due in part to the fact that Canada’s universal system doesn’t include things like pharmacare and mental health. Raza argued it’s also due to a lack of public investment.
While Trudeau has declined to engage with provincial demands for a substantial increase in the Canada Health Transfer (CHT) — the primary mechanism through which the federal government funds health services at the provincial level — the Liberals have proposed to deal with specific services.
Building on previous agreements to fund mental health services, the Liberals promised last fall to create a dedicated Canada Mental Health Transfer with an “initial investment” of $4.5 billion over five years. The Liberal platform also promised $9 billion to improve long-term care and $3.2 billion to help provinces and territories hire new doctors and nurses.
Lingering somewhere in the background is an outstanding federal commitment to expanding pharmacare. Ottawa signed its first (and so far only) agreement to improve drug coverage with Prince Edward Island last August.
But the provinces have been demanding much more than that — an immediate increase of up to $28 billion in the CHT, the dedicated fund for hospitals and doctors that gives provincial governments money they can spend as they see fit.
Promises without price tags
In that year-end interview, Trudeau contended that the support the federal government has provided to the provinces during the pandemic — which includes a $4-billion “top-up” to the CHT this year — proved that “yes, the federal government is absolutely willing to step up on more health care. How much and what it looks like and what is needed, well, those are really important conversations to have.”
Those conversations will pose big questions that need answers.
In the last election, Conservative Leader Erin O’Toole proposed to increase the CHT at an annual rate of six per cent for at least the next ten years. He didn’t account for what that would mean for the federal budget in the long term. The Institute of Fiscal Studies and Democracy warned such an increase might “require significant reductions to other spending measures or increases in revenue measures to maintain fiscal sustainability.”
Back at the start of the pandemic, Woolley argued the federal government was best positioned to shoulder the burden of increased investment. She also suggested the GST could be raised by two points to pay for it.
That option might seem politically untenable. But while Raza said Canada needs to be “smarter” about its health spending, he also argued that the public system faces not a cost problem but a revenue problem, driven by lower taxes on corporations and the richest Canadians.
The public-private debate ramps up again
Greg Marchildon, executive director of the last royal commission on health care in Canada, suggests that rather than increasing the CHT, the federal government should focus on pharmacare and long-term care, which would help cover heavy costs currently being carried by the provinces.
But Sean Speer, a former senior policy adviser to Stephen Harper, wrote this week that 2022 should be the year Canadians face up to the shortcomings in the health care system and consider a greater role for private delivery.
Such talk might revive a debate that played out clumsily during the last election.
Though it was almost completely lost in the tempest over the editing of a video posted by Chrystia Freeland, there was a real point of disagreement between the Liberals and Conservatives over private health services.
Arguing that access to care should not depend on the ability to pay, the Liberal government has threatened to withhold CHT funding from Saskatchewan in response to a program in the province that allows residents to pay for MRI scans from for-profit clinics, so long as those clinics provide an equal number of scans to people on the provincial waiting list. The Liberals made similar threats in 2016 in response to user fees charged by the Quebec government.
But O’Toole has said he would support “innovations” like Saskatchewan’s program that offer Canadians “more choice” — a notion that, while debatable, might appeal to Canadians frustrated with the public system.
“I think the thing that creates these discussions [about privatization] is when we under-invest in these public universal systems that we know are the most equitable way to deliver care,” Raza said in an interview this week.
Most prime ministers might be unwilling to transfer a lot more money to the provinces without some assurances that the money will be well spent.
But if the Liberal government wants to forestall those angling for private “innovation,” it might need to ante up. And then, if necessary, make the case that the cost is worth it.
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