Are We Serious about Fixing Medicare?

Commentary, Healthcare & Welfare, Frontier Centre

After a recent speech in Winnipeg on tax policy, Conservative Party leader Stephen Harper fielded a question about his intentions vis-à-vis Medicare. In the context of bolder, successful reforms embraced in other places, his vague response did nothing to make us expect substantive changes to Canada’s most important social program. If their main opponents waffle, why would the Liberals budge?

Although Harper’s answer headed in the right direction – that we need to measure the system’s performance – his suggested method for reaching that goal was fuzzy. Hardly unique, his tentativeness on the subject is shared by politicians of every stripe in Canada. Yet other countries have made significant progress in addressing the structural problems inherent in universal, single-payer programs. By avoiding real answers our politicians are selling Canadians short.

Harper would refer a diagnosis of Medicare’s dysfunctions to the new National Health Council, recommended by the Romanow Commission and set up by Health Minister Anne McLellan last December. The Council, composed of representatives from every province except Alberta, which initially refused to sign on, is augmented by 13 “expert representatives” and chaired by Dr. Michael Decter, a former deputy minister of health in Ontario’s Bob Rae NDP government. With apologies for the hackneyed phrase, how is this different from the proverbial fox appointed to guard the chicken coop? The Council’s mandate is impressive but flawed, and its composition troublesome.

It is intended to “measure the performance of the health care system, and prepare an annual performance report,” a worthy goal and it is supposed to function as an independent body. But the pressure is already overwhelming to keep the Council’s reform recommendations within the parameters of the Canada Health Act, which obsesses on public administration. Does anyone expect the Councillors, all of whom are seriously invested in the existing system, to do anything beyond defending it?

Same old, same old, and the Conservatives should know better. The Fraser Institute is already reporting on Medicare’s dismal performance, with its annual reports on constantly lengthening waiting lists. The National Health Council may duplicate the reporting of bad news, or more likely, paper it over to make it more palatable to the public. Britain and Sweden, two countries with similar systems and problems, both with social democratic governments, are engaged in a serious re-examination of performance and in serious reform.

In England, at the beginning of May, Tony Blair’s Labour government signed contracts with private hospitals, working through the National Health Service, to perform 25,000 publicly funded surgeries a year for the next five years. The new contracts follow on similar arrangements last September that farmed out work for orthopedics and general treatment, to cut the backlog in cases. “By 2005, nobody should have to wait longer than six months for an operation,” according to Health Secretary John Reid. “Today’s announcement adds even more capacity to an NHS which has already seen a massive increase in capacity.”

In a stunning refutation of the claims of Medicare’s defenders that such a recourse would skyrocket costs, they are instead falling. Reid says that “tough negotiation with independent companies on a planned, national level has allowed us to drive down costs for the NHS.” The use of the NHS’s bulk purchasing power and the entry of foreign providers are pushing prices down, including doctors’ fees. David Mobbs, chief executive of one new contractor, Nuffield Hospitals, predicts further “price deflation in the market.”

Ironically, some of the foreign providers hail from Sweden. Capio Healthcare operates 21 independent hospitals throughout Britain (see This private company purchased Stockholm’s largest hospital in 1999 from the Greater Council of Stockholm during a wave of reform that contracted out of major sections of the public health care system. Incidentally, this was all supported by healthcare unions. Improved outcomes led government to expand the program to include doctors and nurses, the majority of whom now bid into the public system for contracts. Costs declined, while productivity and provider reimbursement went way up. Sweden’s current Social Democratic government is seriously considering the sale of more facilities.

All this is possible within a program of public financing. And the Swedes need not rely on performance evaluations from non-objective stakeholders in the system. Sweden’s major independent health policy think tank, Timbro Health Policy Unit is publishing the Swedish Care Consumer Index to encourage reluctant county councils to improve service (see ). “Who would dream of buying a car or a mobile phone without comparing performance, service and prices?” Timbro asks, “Or make an airline reservation or take out a mortgage?” Through consumer surveys, the index compares the speed, price and effectiveness of medical procedures. The information they provide is accurate and truly independent because they operate outside the self-interested scope of the public sector.

None of this is rocket science, nor is it inaccessible to our rigidly “in-the-box” political parties. Competition works and monopoly doesn’t. If Stephen Harper and Paul Martin et al are offering the same, tired bromides especially the “a few more dumptruck loads of cash is the answer” approach, the future path of Medicare is sure to continue straight downhill.

The new National Health Council is part of the problem, not the solution.