Friday, November 22, 2002
Globe and Mail

We’re headed the wrong way

Any health-care system that makes visits to a family doctor freely available but rations high-cost treatments for life-threatening ailments has it backward, says BRIAN LEE CROWLEY

By Brian Lee Crowley

Canadians cannot sustain medicare if we stay on our present course. We’ve bought a modest slowdown in the rate of spending increases — chiefly by reducing services, closing facilities, reducing the number of health professionals, increasing waiting times and forgoing innovative, but expensive, new technologies. But medicare as we know it can only be “sustainable” if Canadians are willing to accept less service or more taxes. Polls indicate that neither is acceptable. Yet our expectations are increasing — for expensive health technologies, drugs and procedures, and for the normal demands of an aging population. Medicare’s problems are only going to grow.

Roy Romanow, head of the Commission on the Future of Health Care in Canada, has rejected these arguments, making it clear that he will recommend not only retaining but even expanding the centrally planned, government monopoly model of health care in Canada.

Virtually every other major inquiry into health care, including Kirby, Mazankowski and Fyke, says sustainability is the system’s key challenge. Mr. Romanow’s own former minister of finance in Saskatchewan underlined this when she testified before his commission.
But Mr. Romanow denies there’s a problem. We’re spending the same share of GDP on public health care as 30 years ago. If a little more than 7 per cent of GDP was sustainable in 1972, why is that same percentage unsustainable today?

It’s the wrong question. The problem is not how much we’re spending, but how we’re paying for it and what we’re getting in return. For years, we borrowed and spent on health care (and other services), so we got more than we were willing to pay for. Today, we pay the full cost of current services, plus the interest on money we borrowed for health care and other things in the past. While the spending has remained constant as a share of GDP, the tax burden has grown and quality has declined.

The irresistible force of demand for services is running headlong into the immovable object of unavoidably limited health budgets. To date, we’ve relieved the pressure by letting infrastructure crumble, forgoing access to the latest medical innovations, and allowing queues to lengthen and the number of medical professionals to decline.
By and large, people have access to ordinary, low-cost services like GP office visits, but they find it increasingly difficult to get vital services such as sophisticated diagnostics, many types of surgery, and cancer care (where the waits can be measured in months if not years).

This is the exact reverse of what the rational person would want. We should use the public sector to pool everyone’s risk of expensive interventions to ensure that they’re available when needed — but let individuals bear the cost of ordinary interventions (supplemented by private insurance and subsidies for those on low incomes).
Hardly anyone can afford cancer care, bypass surgery, gene therapy or a serious chronic illness on their own. These are the things that, without insurance, destroy people’s finances. But as much as 30 per cent of the services consumed under medicare are of marginal or no value. No one would be financially ruined by having to pay for an ordinary doctor’s office visit if we ensured that people on low incomes were subsidized, and there was a reasonable maximum anyone would be called on to pay. No one would be harmed by an incentive not to go to the emergency room when a visit to the family clinic would do just as well.

The world’s biggest health-care study, the RAND experiment, found that people who had to pay something toward the cost of their care consumed less of it, but that their health was every bit as good as those who got totally free care.

The extra infusion of taxes Mr. Romanow will recommend will merely put off the day when we must concentrate scarce public health-care dollars where they’ll do the most good, and give users of the system incentives to be prudent about how they spend them. We spend vast sums on procedures of little or no value, while we place patients with life-threatening conditions in lengthening queues.

But there’s hope. If we put these facts before Canadians, they will rise to the challenge of defining the list of health services they believe merit full public insurance. They will also accept having to pay for minor services out of pocket if they’re sure that the poor won’t suffer (the list can be developed through public consultation, under appropriate rules and safeguards, where Canadians decide how much they should pay and what medicare should cover).

Oregon has already moved in this direction. A recent paper by health economist Julia Witt for my institute makes a powerful case that the shortcomings of the Oregon experiment can be overcome by more sophisticated rules and consultation techniques.
Canadians have resisted plans to reduce the range of services insured by medicare; they suspect that the outcome will reflect what bureaucrats, not citizens, actually want.
Engaging Canadians in each province in a dialogue on the services to be insured, and treating them like responsible, intelligent adults, might produce results that would pleasantly surprise our political elites.

Mr. Romanow is wedded to an old paternalistic model — one that’s been overtaken by technology and by rising public expectations. It suggests experts know best which services we should get, how much they should cost, and how long we should wait.
Let’s tell Canadians the truth about medicare’s unsustainability and involve them in making the tough choices to ensure that medicare’s best features are there when we need them.

Brian Lee Crowley, president of the Atlantic Institute for Market Studies, is co-author of the forthcoming Definitely Not the Romanow Report: Achieving Equity, Sustainability, Accountability and Consumer Empowerment in Canadian Health Care.