Any healthy debate about Canada’s medical system would require that politics be eliminated from the equation.
But that’s not going to happen.
What did happen at the tail end of 2011, however, was delivery of Ottawa’s message to the provinces that health-care’s tax dollar funding well is no longer bottomless.
Finance minister Jim Flaherty’s plan would continue to deliver 6% annual increases in health-care transfers to the provinces until 2016-17. After that, any increases would be tied to gross domestic product growth.
The plan reflects the new fiscal reality that spending more is no longer the default option, regardless of budget portfolio. The chronic global economic crisis, the European Union’s four-alarm sovereign solvency fire, the rising debt waters breaching budget sandbagging on all fronts are among the reasons why.
In B.C., budget time is traditionally health-care spending increase time, regardless of which party is in power. At last count, it was absorbing around 42.5% of the provincial budget. Those working the system will tell you that annual increases are inevitable – mainly because the baby boomers are hard at work screwing things up again – this time by aging en masse.
But objective analysis says otherwise, especially if you base conclusions on hard numbers rather than political melodrama. Urban Futures Institute researchers favour the former.
According to their Sustainable: British Columbia’s Health Care System and Our Aging Population, the issue is not demographics.
“The challenge,” according to the report’s authors, “is the continuation of uncontrolled spending growth, in which there are few incentives for health-care providers to find better – rather than merely more expensive – approaches to health-care delivery.”
At last check, incentives for consumers to use the system prudently were also non-existent.
According to the institute’s report, average annual provincial government health spending over the past three decades increased 8% while B.C.’s overall population grew by only 1.7% and the 65-plus portion of that population grew by 2.9%.
Reasons for the spending-versus-population-growth disparity are many, but key from a business perspective is the system’s capacity to cultivate innovation. It has none.
As medical doctor and author Les Vertesi told Public Offerings several years ago, such basics as budgets in B.C. health care have more in common with Cold War-era state monopoly accounting than with 21st century business realities. The fixed, or global structure, of those budgets depends in large part on what a hospital received in the previous year. Innovation and efficiency aren’t part of the equation. The chances of system fundamentals improving are therefore next to zero.
Whichever side of the health-care fence you’re on, Ottawa’s retooled funding formula deserves applause for kick-starting debate over how Canada plans to sustain a fiscally responsible health-care system.
If that debate leads to solutions that sharpen innovation and efficiency while delivering quality health care that’s affordable for the long term, the system’s prognosis for survival will improve.
That would be tonic for everyone’s fiscal, mental and physical health, regardless of political allegiance. •
