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Finding money to fix medicare
CAROL GOAR
Health care tops every poll when Canadians are asked to rank their political priorities. But pollsters seldom ask people what they are prepared to give up to accommodate an ever-expanding medical budget.
That is the question bedevilling the nation's political leaders.
Some, such as Alberta Premier Ralph Klein, are raising it openly and aggressively. Others, such as Prime Minister Paul Martin, are pondering it quietly.
Ottawa and the provinces spent $85 billion on medicare last year. It was the sixth consecutive year in which health expenditures rose by 7 per cent, outstripping economic growth and starving other government programs.
Yet still the premiers are warning that medicare will not survive the decade without more federal funds; still the Canadian Medical Association is predicting a worsening shortage of doctors, nurses and hospital beds; and still patients are complaining that they have to wait too long for treatment.
Roy Romanow assured Canadians 16 months ago that medicare was sustainable.
The former health commissioner said Ottawa would have to add $15 billion to the system by 2006, then raise its yearly contribution by $6.5 billion. But he foresaw no difficulty, given that the finance department was projecting a string of healthy surpluses.
There were difficulties, of course:
The finance department's rosy forecast fell victim to SARS, mad cow disease, a spate of natural disasters and a rapidly appreciating dollar.
The provinces, desperate for funds, ignored Romanow's appeal to invest in change and used their new federal money to pay their operating bills.
The federal government engaged in its old game of underestimating the surplus, angering the premiers and setting off a new round of recriminations.
So once again taxpayers find themselves caught between battling governments, watching their health-care system deteriorate.
The reforms Romanow recommended — round-the-clock teams of health-care professionals, improved home care, bulk buying of prescription drugs and clear performance standards — still make sense.
But his plan to pay for them — relying on Ottawa's future surpluses — doesn't.
It makes no allowance for the possibility of an economic downturn. It provides no relief from intergovernmental wrangling. And it gives medicare first claim on every unallocated dollar, crowding out other priorities.
That is why federal officials are seriously considering the possibility of a national health-care premium.
The idea was advanced by a Senate committee a year-and-a-half ago, but ignored by the government.
The 11-member committee, headed by Michael Kirby, proposed that Ottawa raise $5 billion a year through a "variable national health-care insurance premium" based on an individual's ability to pay. The money would go into a special account, dedicated strictly to fixing medicare. It would be overseen by an independent health commissioner, advised by a 10-member council.
Almost no one liked the plan at the time. The right slammed Kirby for recommending a tax increase. The left accused him of raising money in a regressive way. Fellow Liberals saw no value in a large pool of cash they couldn't touch. The final blow came when Romanow declared that medicare could be financed out of existing revenues.
But that was three federal-provincial skirmishes and $29 billion in spending promises ago. The optimism engendered by Romanow's report has dissipated. And 9.8 million baby boomers will soon stretch the health-care system to its limits.
Kirby still thinks a national health-care premium is the answer. "It's the only way to buy change. We'll never get reform by dumping money into the existing system."
Senior officials in Martin's government are coming around to that view. They see no benefit in continually boosting provincial health-care transfers to preserve an unacceptable status quo. They see no advantage in spending more to achieve less.
A national health-care premium offers a way out of this conundrum. It allows Ottawa to create a pool of cash earmarked solely for restructuring the medical system. It guarantees that health-care reform will go ahead, regardless of economic conditions. And it places $5 billion a year beyond the reach of squabbling politicians.
They will continue to squabble, no matter what arrangements are made.
With an aging population and ever-more-sophisticated medical technology, the pressure to increase health-care spending will be relentless. Ottawa will never provide enough cash to satisfy the provinces and they will never be sufficiently biddable to satisfy Ottawa.
But it would be a relief to know that, despite the cacophony, progress was being made. It would be reassuring to think that, beneath the jurisdictional battles, one stream of revenue was flowing directly into health-care improvements.
If asked, most Canadians wouldn't be eager to pay for more medicare. But if the options were longer waits for treatment or worse schools for their children, they might want to reconsider.
CAROL GOAR
Health care tops every poll when Canadians are asked to rank their political priorities. But pollsters seldom ask people what they are prepared to give up to accommodate an ever-expanding medical budget.
That is the question bedevilling the nation's political leaders.
Some, such as Alberta Premier Ralph Klein, are raising it openly and aggressively. Others, such as Prime Minister Paul Martin, are pondering it quietly.
Ottawa and the provinces spent $85 billion on medicare last year. It was the sixth consecutive year in which health expenditures rose by 7 per cent, outstripping economic growth and starving other government programs.
Yet still the premiers are warning that medicare will not survive the decade without more federal funds; still the Canadian Medical Association is predicting a worsening shortage of doctors, nurses and hospital beds; and still patients are complaining that they have to wait too long for treatment.
Roy Romanow assured Canadians 16 months ago that medicare was sustainable.
The former health commissioner said Ottawa would have to add $15 billion to the system by 2006, then raise its yearly contribution by $6.5 billion. But he foresaw no difficulty, given that the finance department was projecting a string of healthy surpluses.
There were difficulties, of course:
The finance department's rosy forecast fell victim to SARS, mad cow disease, a spate of natural disasters and a rapidly appreciating dollar.
The provinces, desperate for funds, ignored Romanow's appeal to invest in change and used their new federal money to pay their operating bills.
The federal government engaged in its old game of underestimating the surplus, angering the premiers and setting off a new round of recriminations.
So once again taxpayers find themselves caught between battling governments, watching their health-care system deteriorate.
The reforms Romanow recommended — round-the-clock teams of health-care professionals, improved home care, bulk buying of prescription drugs and clear performance standards — still make sense.
But his plan to pay for them — relying on Ottawa's future surpluses — doesn't.
It makes no allowance for the possibility of an economic downturn. It provides no relief from intergovernmental wrangling. And it gives medicare first claim on every unallocated dollar, crowding out other priorities.
That is why federal officials are seriously considering the possibility of a national health-care premium.
The idea was advanced by a Senate committee a year-and-a-half ago, but ignored by the government.
The 11-member committee, headed by Michael Kirby, proposed that Ottawa raise $5 billion a year through a "variable national health-care insurance premium" based on an individual's ability to pay. The money would go into a special account, dedicated strictly to fixing medicare. It would be overseen by an independent health commissioner, advised by a 10-member council.
Almost no one liked the plan at the time. The right slammed Kirby for recommending a tax increase. The left accused him of raising money in a regressive way. Fellow Liberals saw no value in a large pool of cash they couldn't touch. The final blow came when Romanow declared that medicare could be financed out of existing revenues.
But that was three federal-provincial skirmishes and $29 billion in spending promises ago. The optimism engendered by Romanow's report has dissipated. And 9.8 million baby boomers will soon stretch the health-care system to its limits.
Kirby still thinks a national health-care premium is the answer. "It's the only way to buy change. We'll never get reform by dumping money into the existing system."
Senior officials in Martin's government are coming around to that view. They see no benefit in continually boosting provincial health-care transfers to preserve an unacceptable status quo. They see no advantage in spending more to achieve less.
A national health-care premium offers a way out of this conundrum. It allows Ottawa to create a pool of cash earmarked solely for restructuring the medical system. It guarantees that health-care reform will go ahead, regardless of economic conditions. And it places $5 billion a year beyond the reach of squabbling politicians.
They will continue to squabble, no matter what arrangements are made.
With an aging population and ever-more-sophisticated medical technology, the pressure to increase health-care spending will be relentless. Ottawa will never provide enough cash to satisfy the provinces and they will never be sufficiently biddable to satisfy Ottawa.
But it would be a relief to know that, despite the cacophony, progress was being made. It would be reassuring to think that, beneath the jurisdictional battles, one stream of revenue was flowing directly into health-care improvements.
If asked, most Canadians wouldn't be eager to pay for more medicare. But if the options were longer waits for treatment or worse schools for their children, they might want to reconsider.