This year, the claim that Medicare is unsustainable pre-occupies Canadian political debate. On December 14th retired Senator Michael Kirby and former Prime Minister Brian Mulroney piled on their prophecies of doom. And barely a week goes by without Jeffrey Simpson blaming increasing health care costs for nearly everything but global climate change.
University of Toronto Emeritus History Professor Michael Bliss offered his perspective in this year’s CD Howe Institute’s Benefactor’s Lecture, “Critical Condition: A Historian’s Prognosis on Canada’s Aging Healthcare System”. Professor Bliss’s comments also graced the op ed pages and were promptly replayed by others.
Professor Bliss claims the main problem with Canadian health care is that it’s so successful that the costs are now too much for governments to bear. His main recommendation is to make users of the system pay more though not through point-of-service user charges.
He claims that Canadian governments have abandoned universality in other areas, e.g. old age pensions. He says we should now punish public policy’s most recalcitrant student with the same discipline. Professor Bliss has clearly thought a lot about these issues and feels them strongly. Nonetheless, his diagnosis is faulty and his prescription could be deadly.
Total health costs did rise as a share of the economy from 2000 to 2009, but inflation adjusted expenditures rose by only 1.4% in 2010 and dropped as a share of our economy. These trends will continue for several years. There’s even less sign of cost pressures if we look at public expenditures, about 70% of all spending. These costs have only increased from 7.4% to 8.2% of GDP since 1992. Furthermore, the Canada Health Act just covers hospitals and doctors. The costs of those programs have actually decreased from 5.3 per cent to 5 per cent of GDP.
Moreover, health expenditures have been flat at 39% of provincial government program spending since 2003. Of course this does not stop Professor Bliss from parroting the claim of a TD report earlier this year that health care is due to consume 80% of program spending by 2030. These days, the Medicare debate has lost the appearance of informed discussion and rather resembles a convention of tired old frat boys who get together and drink each other’s bath water.
Professor Bliss, former Bank of Canada chief David Dodge, and other members of delta iota mu also claim that there is no choice other than additional spending or less service. However, health care is replete with waste. We spend billions on drugs that shouldn’t be prescribed and then billions patching patients up from side effects. Up to one fifth of elderly patients are readmitted to hospital within one month of discharge when home-care nursing would avert half of these episodes. In fact, improving the quality of health care services is the key to sustainability.
Being one of Canada’s most distinguished historians, Professor Bliss should know about the Second Stage of Medicare but his paper is silent on this topic.
Saskatchewan Premier Tommy Douglas always said that Medicare would be implemented in two stages. According to Douglas, the intent of the first stage was to “remove the financial barrier between those who provide health care services and those who need them”. He said the intent of the second stage would be to, “alter our delivery system to reduce costs and put and emphasis on preventative medicine”.