[A-List] Canada: unhealthy accumulation

["Michael Keaney" <michael.keaney@xxxxxx>]

Canada's healthcare remains public
By Ken Warn
Financial Times: December 5 2002

Few topics are as guaranteed to make Canadians go misty-eyed as hockey and
healthcare. The country's universal, taxpayer-funded healthcare system is
widely seen as one of the foundations of national identity, an
overwhelmingly moral rather than economic enterprise offering equal
treatment to those of different class, race or language.

Like hockey, healthcare raises strong passions. Canada's system, modelled on
Britain's National Health Service, is widely cherished. But lengthening
waiting lists and shortages of key personnel have led many Canadians to urge
more resources for the creaking system.

Canada is truly the home of one-stop shopping for health. Unlike in Britain,
private parallel healthcare provision is in effect outlawed. Unlike France
and a host of other developed countries, there is no use of "top-up" health
insurance, and there are no user fees.

After an 18-month, C$15m commission into the system, Roy Romanow, former
premier of Saskatchewan, said he would like to keep it that way. To the
dismay of the Canadian right, Mr Romanow last week rejected fundamental
changes in how the system is financed.

He suggested increased public funding for magnetic resonance imaging (MRI)
and other diagnostic scanning, which would roll back one of the few areas
where private provision has been growing. Private clinics have been opening
across the country to provide scans or minor surgery in provinces keen to
reduce waiting lists.

However, such clinics contract directly with local health authorities, and
their services remain free at the point of delivery.

Mr Romanow appeared to tap into opposition to the idea of private healthcare
embedded in the psyche of many Canadians. "Let people buy their way openly
to the front of the line. Make healthcare a business. Stop treating it as a
public service, available equally to all . . . No! Not now, not ever," he
wrote in the preamble to his report.

Instead of private cash, he prescribed a C$15bn injection of federal funds
into the C$100bn-a-year system by 2006. The funding would increase the
federal share of healthcare spending to about 25 per cent from the current
19 per cent - the remainder is made up by the provinces.

He urged more accountability through creating a healthcare watchdog, and
extending the scope of Medicare through a national home care programme and
assistance with drug costs for the chronically ill.

Mr Romanow's report raises several dilemmas for Ottawa. Economists believe
the recommendations cannot be fully financed unless the government puts
other spending plans on hold.

"If healthcare wins out there is just no room for other measures," said
Derek Burleton, senior economist at TD Bank Financial Group. Even if
healthcare alone wins extra funding, the government's projected budget
surpluses will turn to deficit in 2003-04, TD Bank said.

The commission's recommendations will go through federal-provincial
negotiations, starting with a meeting of first ministers in January. But
Ottawa is hinting it will not fund all Mr Romanow's recommendations.

Many of the provinces, in turn, are wary of the report's suggestion that
federal health funding should come through a dedicated block grant, which
they say would increase Ottawa's control of a key provincial responsibility.
The talks could prove lengthy and difficult.

However, the government is committed to substantial increases in healthcare
spending and appears certain not to challenge Mr Romanow's rejection of an
increased role for private provision.

That makes the entire report a lost opportunity, according to John Graham,
senior policy analyst at the Fraser Institute, a pro- market think-tank.
"The main problem is that Romanow wants to throw more money into a
government monopoly. He can't see that a lot of the problems in the system
are caused by that very monopoly."

For all its power as a symbol of social solidarity, international
comparisons do not show Canadian healthcare in a good light. Canada is one
of the biggest spenders among OECD countries providing universal coverage,
in terms of the proportion of GDP spent on healthcare.

However, in terms of the numbers of doctors per thousand people, or the
numbers of MRI machines, Canada languishes well down the list of developed
nations.

Canada appears wedded to universal, taxpayer-funded healthcare for the
foreseeable future. But in spite of Mr Romanow's distaste for private
provision, provinces such as Ontario, Alberta and British Columbia look set
to continue contracting for services with private clinics - moves the unions
claim open the way to privatisation.