If health-care innovation is key, set the provinces free

Canada ranks among the most expensive universal health-care systems but has fewer medical resources and some of the longest wait times

By Bacchus Barua
Steve Lafleur
and Ben Eisen
The Fraser Institute

VANCOUVER, B.C. Sept. 14, 2016/ Troy Media/ – In a recent speech to the Canadian Medical Association, federal Health Minister Jane Philpott acknowledged what few politicians seem willing to recognize – that Canada’s health-care system is in desperate need of repair and more money isn’t the answer.

Crucially, Philpott also provided some examples of countries that outperform Canada’s health-care system on a number of indicators, but which do ‘universal health care’ differently.

Bacchus Barua

Researchers have long [popup url=”https://www.fraserinstitute.org/studies/value-for-money-health-insurance-systems-in-canada-and-oecd-2012-edition” height=”1000″ width=”1000″ scrollbars=”1″]pointed out[/popup] that while Canada ranks among the most expensive universal health-care systems in the developed world, has fewer medical resources (physicians, beds, diagnostic scanners) on average, a mixed record on outcomes and some of [popup url=”https://www.fraserinstitute.org/studies/waiting-your-turn-wait-times-for-health-care-in-canada-2015-report” height=”1000″ width=”1000″ scrollbars=”1″]the longest wait times[/popup] for medically necessary treatment.

That the minister acknowledged this imbalance marks a significant shift from the pervading misperception that Canada has the world’s best (or only) universal health-care system.

Steve Lafleur

Philpott’s acknowledgement that more money (through the Canada Health Transfer, or CHT) is not the answer also marks a bold move away from the politically savvy promises of arbitrarily-determined and unsustainable annual increases in federal funding that we saw in the 2000s. Unlike many of her predecessors, Philpott has signalled that innovation – not more taxpayer funding – is key to improving our health-care system.

Of course, this raises two crucial questions:

  • What kind of innovation is needed?
  • What prevents it from taking place?

While provincial governments have enough latitude to pursue improved efficiency by moving towards electronic health records, activity-based funding for hospital care and centralizing the patient-referral process, the [popup url=”http://www.macdonaldlaurier.ca/files/pdf/How-the-Canada-Health-Act-Obstructs-Reform-and-Innovation-June-2012.pdf” height=”1000″ width=”1000″ scrollbars=”1″]Canada Health Act[/popup] (CHA) remains responsible for a lack of meaningful innovation through policy reform.

Ben Eisen

The act sets terms and conditions that provinces must fulfil before receiving full cash transfers from Ottawa.

But it discourages provinces from employing policies found in Australia, the United Kingdom, France and Germany – the very countries Philpott pointed towards as potential models for reform.

Each of these countries [popup url=”https://www.fraserinstitute.org/sites/default/files/for-profit-hospitals-and-insurers-in-universal-health-care-countries.pdf” height=”1000″ width=”1000″ scrollbars=”1″]embraces the private sector[/popup] as either a partner or an alternative for the insurance and delivery of medical services. Further, Australia, France and Germany expect patients to share the cost of treatment (with annual caps and exemptions) to encourage them to make more informed decisions about the use of scarce (and costly) medical resources. Notably, all four of these countries have [popup url=”http://www.commonwealthfund.org/~/media/files/publications/fund-report/2016/jan/1857_mossialos_intl_profiles_2015_v7.pdf” height=”1000″ width=”1000″ scrollbars=”1″]shorter wait times[/popup] for medically necessary treatment than Canada.

If the federal government is truly interested in promoting meaningful, beneficial innovation, it could relax the CHA and let the provinces be freer to pursue policies they feel best serve their populations.

Philpott’s recent statements about the state of Canada’s health system were refreshingly honest and correctly diagnosed the problem – a lack of innovation, not a lack of money.

What remains to be seen, however, is if she is bold enough to allow provinces to introduce the sort of policies long ago adopted by the very countries she identifies as potential models for reform.

Bacchus Barua, Steve Lafleur and Ben Eisen are analysts at the Fraser Institute.

Bacchus, Steven and Ben are Troy Media [popup url=”http://marketplace.troymedia.wpmudev.host/our-contributors/” height=”1000″ width=”1000″ scrollbars=”1″]contributors[/popup]. [popup url=”http://www.troymedia.wpmudev.host/become-a-troy-media-contributor/” height=”600″ width=”600″ scrollbars=”1″] Why aren’t you?[/popup]

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