Getting More for the Health Reform Budget

The federal government has pledged billions of dollars to the provinces to help them deliver better healthcare, and to deliver it faster. So far, this hasn't happened. Some specific changes can help ensure that health reform budgets aren't wasted.
Published on June 27, 2008

The Health Council of Canada issued an assessment of health-care reform earlier this month, and it wasn’t encouraging.

Despite tens of billions of additional federal dollars being allocated to the provinces, access and outcomes remain substandard, and few meaningful reforms have been made. Waiting lists have been shortened for a selected few specialties and procedures, but in general we lag behind European states on a number of indicators.

If the provincial health ministries continue to receive these massive health-care bailouts, as they are scheduled to do for another five years at least, they ought to pledge the money to specific programs that will better serve Canadians, and lead to lasting structural reform.

Here are three suggestions:

Pay hospitals for performance.

Canada is one of the last countries still using block funding, in which a hospital budget is not tied to the number of procedures carry out in the institution, or the number of people cared for. Block funding is the root cause of waiting lists. Hospital administrators are effectively given incentives for rationing care, since every patient treated represents a loss of revenue, and not a source of income.

Allocating federal money to hospitals based on an appropriate fee for each test, therapy or procedure would mean more people would get treated more promptly.

The benefits of ending block funding are manifold, as fewer people would suffer the mental and physical distress waiting for a diagnosis or treatment.

Politically, ending waiting lists would be a tremendous accomplishment. And the best course of action in medical terms is also good for the bottom line, as well as for the number of Canadians whose conditions worsen as they wait, requiring more expensive treatment down the road.

It would also reduce the number of people unable to function normally because of undiagnosed or untreated problems.

Provide easier access to pharmaceuticals.

Only 38 per cent of total pharmaceutical spending in Canada is subsidized, compared with more than 90 per cent in France, Germany, Italy, Spain, Switzerland and the UK.

As our population ages, Canadians will increasingly become dependent on pharmaceuticals to manage chronic disease. This problem will be compounded as retirees leave the workforce, and their drug costs are no longer subsidized by supplemental insurance provided by their employers.

The appropriate use of pharmaceuticals is crucial to good medical outcomes. Mental illness can increasingly be managed by medication, which makes a striking difference in the quality of life enjoyed by these patients.

New drugs that fight hypertension and heart disease extend lives. Not so long ago such a diagnosis meant a greatly reduced lifespan. Other pharmaceutical breakthroughs are leading to progress in the fight against cancer, arthritis and many other diseases that debilitate or kill. Lives often depend on reliable access to drugs, and so does quality of life for even more people.

Boosting the use of the right medications makes good economic sense, too. The Canadian Health Care Consensus Group, whose mandate is to offer real solutions that result in better health care for Canadians, found that every dollar spent on drugs reduced other costs to the health-care system by $2.65.

In Canada, 70 per cent of patients with hypertension and 60 per cent of those with asthma (two common chronic conditions) did not have their disease properly under control. While the necessary drugs can be expensive, every $3 spent on asthma medication saves $17 in emergency room costs.

If provinces use their federal health-care supplements to make drugs more affordable for all Canadians, they will not only see improved outcomes and quality of life for those with chronic diseases, but also savings in other areas.

But using this additional money to pay for more drugs, more diagnostic procedures, and more treatments will only help Canadians in the short term. Lasting and sustainable change will require reorienting the delivery of medicine in Canada away from its traditional focus on providers and administrators, and towards health-care consumers.

Re-orient the delivery of medicine toward health-care consumers

The strongest health-care systems in Europe are decentralized, allowing individuals to choose their providers and to determine the level of health coverage they want, and providing them with alternatives in the private sector and in neighbouring regions if the local public provider proves inadequate.

Investing in a new model for health care, and making the transition toward a flexible, responsive system in which the government regulates health care, and otherwise empowers patients to have as much freedom as possible, is the third priority for provinces to consider in spending their increased health-care transfers.

It is this step that might one day obviate the need to go to the federal government, cap in hand, asking for yet more money to fix health care.

Featured News


Rodney Hide: My Journey

Rodney Hide: My Journey

It’s been awhile since I have written. I have tried. But I have not had anything useful to say. My concern has always been public policy. What should the government do for the best result? My writing on the government was technical. Here’s what the government is...

Sadly, AFN Remains Bad Venue for Future-Oriented Prosperity Message

Sadly, AFN Remains Bad Venue for Future-Oriented Prosperity Message

Manitoba’s First Nations should reflect on the AFN’s direction as they consider negative reactions to Conservative Leader Pierre Poilievre at a recent Assembly of First Nations (AFN) meeting in Montreal. Poilievre, who in the past has boldly said we need to end the...

They Are Closing Up the Internet

They Are Closing Up the Internet

Such confusing times, so much in dispute, so much to discover and know. Billions of people are right now lifting their phones to their faces and searching for answers. The results they see are dramatically different from what they were just a few years ago. You have...