Earlier this month, Prime Minister Jean Chretien and his 10 provincial counterparts signed the “2003 First Ministers’ Accord on Health Care Renewal.” Except the accord renews nothing; it merely recycles the same old rules and formulas with more dollars attached.
Under the accord, Ottawa will increase its health spending by nearly $35 billion over the next five years, or a little less than $7 billion per year.
The provinces consider this a win as the new money comes with few strings attached. Ottawa considers it a win as the provinces have basically promised to resist experimentation with for-profit care, which most of them had no plans for anyway.
Of course, there is only one taxpayer. So when Ottawa brags about how much more it is sending the provinces, or the provinces about how much more they have extracted from Ottawa, they are both just referring to how they plan to carve up your money and mine.
The first ministers’ accord is little more than a political pact aimed at permitting federal and provincial governments to brag about how much they value medicare, while simultaneously allowing them to put off real reforms for another five years.
While we are waiting for our timid and unimaginative politicians to be depth-charged by reality into making substantive and innovative changes, the rest of us have plenty of time to contemplate other service models.
In recent months three respected Canadian think-tanks have produced reports on medicare reform in Sweden: the Fraser Institute, the Atlantic Institute for Market Studies, and Winnipeg’s Frontier Centre for Public Policy.
Sweden was forced by the pressure of an aging population to make what Peter Holle, the president of the Frontier Centre, calls a “purchaser-provider split.” The Swedes decided they still wanted the state to pay for the health care of every citizen, but no longer cared whether the provider was public or for-profit, so long as providers agreed to meet public standards of care.
In Canada, we have no such split; government is both purchaser and provider. Therefore, no one has a proper idea of what individual medical services costs. Health care and hospital budgets are at best elaborate guesses of what services will be provided in the coming year and what those services will cost in a general sense.
When purchaser and provider are split, true costs have to be established so the provider knows how much to charge and the purchaser how much to pay. The split provides the largest single innovation possible within a wholly state-funded medicare system: It enables the money to follow the patient.
Swedish hospitals do not get lump-sum budgets at the beginning of each year, as ours do. They do not then have to ration treatment to make their budgets last until next year.
In our system, too often patients are seen as unwanted drains on resources. Beds are closed to cut costs. With a purchaser-provider split, the purchaser does not pay for the service until after the provider has provided it.
Rather than rationing to conserve budgets, patients are sought as sources of revenue. This then creates a sort of faux competition. It is not true competition — the purchaser remains government. But still, since the money follows the patient, providers have to offer the services, quality and timeliness patients want.
Sweden has 40 per cent more seniors than Canada. Their population is where ours will be in 2015 or 2020. Yet their waiting lists are no longer than Canada’s, and in many places, shorter.
More important, their health-care expenditures, per capita, are lower. Health spending in Canada consumes well over nine per cent of GDP, in Sweden it consumes much less than 8 per cent, according to the OECD. If Canada had as many seniors to treat, we would need to spend more than 11 per cent of GDP.
In other words, adjusting for the differences in our populations’ ages, Canada spends about 40 per cent more on health care than Sweden, for similar outcomes.
Not every one of Sweden’s 23 districts has equally embraced the purchaser-provider split. But Holle claims that in Stockholm, where much of the care now is for-profit, the “single buyer, multiple-competing-providers model, shrank waiting lists on the order of 75 per cent.”
Costs are down, wages for health-care workers are up, innovations and new technologies are more rapidly integrated, and patient satisfaction levels are higher.
Private providers in Sweden are 13 per cent more efficient than state-owned providers, according to the Fraser Institute.
And user fees of about $15 per office visit have dramatically reduced overuse of physicians’ services.
Of course there are problems. Many Swedish doctors, for instance, remain salaried state employees. Since their incomes are not tied to meeting with patients, many see patients only 20 hours per week, or less. Making a doctor’s appointment can be as difficult as in Canada, if for different reasons.
The point is, there are not merely two models of health care — a state monopoly or laissez-faire. There are dozens of models around the world that successfully combine public and private elements, while increasing patient choice and service, and keeping costs in check. It is well past time our politicians considered them.
Columnist, Edmonton Journal
Editorial Board Member, National Post