Let's not wait until 2030 to fix health funding

[aaronjw]

By JOHN IBBITSON

Globe and Mail Update

 

 

If the past is precedent, don't expect health ministers meeting in Halifax to agree to start down the path of needed fundamental change

 

It is March 2030, and a grim-faced Finance Minister rises in the Ontario Legislature to present her first budget.

 

"Mr. Speaker," she declares, "this province has hit a wall. Sustaining our health-care system will consume 80 per cent of this year's provincial spending. As a result, we have no choice but to impose major cuts to education, welfare, public transit and all other programs and services. I am particularly sorry to have to announce that funding for junior kindergarten must be terminated."

 

This budget speech will be repeated in provincial capitals across Canada in less than 20 years, unless health ministers meeting today in Halifax agree to start down the path of fundamental change.

 

But history tells us they almost certainly won't.

 

Don Drummond, the former chief economist of TD Bank, is leading a commission to reform government services in Ontario, as the McGuinty administration struggles to rein in a chronic and crippling deficit.

 

Mr. Drummond recently delivered a paper that showed how seriously rising health-care costs are undermining public finances.

 

Over the past decade, public health spending has increased annually by 7.6 per cent, even though inflation held steady at around 2 per cent. This year health care will consume 46 per cent of everything the Ontario government spends.

 

"Things will only get as worse as health care eats up every other public service like an insatiable Pac Man," Mr. Drummond warned. He estimated that by 2030, using conservative assumptions, funding health care will take up 80 per cent of provincial budgets.

 

"The system must be reformed," he concluded. Who could possibly disagree?

 

Mr. Drummond listed all the things needed to bend the cost curve while improving the mediocre service the current system delivers: changing the way doctors are paid; letting other professionals provide some services that physicians now provide; shifting the focus from acute care to chronic care; identifying and expanding best practices; fighting obesity and other bad habits; reining in skyrocketing prescription costs.

 

But all of these reforms were identified 20 years ago. The system is sclerotic, entrenched and opposed to change.

 

One solution might be for provinces to pool resources and align practices to create a truly national health-care system. Liberal Senator Art Eggleton, who is part of a Senate committee preparing a report on health-care reform, believes the federal government should take the lead.

 

"They have a responsibility to set some goals ... in partnership with the provinces," he said in an interview.

 

But the provinces strongly resist federal direction in health care, and Stephen Harper in the past has criticized federal interference in areas of provincial jurisdiction.

 

A better strategy might involve provinces working with each other, assisted rather than directed by Ottawa. But interprovincial co-operation is also hard to come by.

 

For 20 years, people who knew what they were talking about warned that federal deficits had to be brought under control. But Ottawa only acted in the 1990s when it became clear the government was about to hit a debt wall.

 

People who know what they're talking about tell us that we're now racing toward a health-care funding wall. But if the past is precedent, politicians won't act until it's clear we're about to hit that wall.

 

Then we'll see if they're able to brake in time.

 

http://www.theglobeandmail.com/news/politics/john-ibbitson/lets-not-wait-until-2030-to-fix-health-funding/article2247240/

[A-Stark]

The 80% figure is nonsense. Of course most of what Ibbitson says usually is.

 

A much better article:

 

The health-care sky is not falling !

Michael Rachlis

 

Last week, the Canadian Institute for Health Information (CIHI) released the latest figures on the country’s health spending. It provides a cool analytic antidote to a heated political issue. Health costs are not out of control. And the report’s findings remind us that the real issues have little to do with money.

 

Almost every day some politician or pundit declares that provincial health-care spending is massively out of control, eroding government’s ability to fund everything else. Our roads are full of potholes, our kids can’t do long division, and it’s all the fault of a rapacious health-care system.

 

Several reports have suggested that health spending will inexorably rise to 70 or even 80 per cent of provincial government program spending in the next 10 to 20 years. The CIHI graph of provincial health-care spending over time draws a very different picture from that portrayed in our public debate. Health spending was fairly steady at 33 per cent of program spending during the early and mid-1990s. After 1997, it rose rapidly to 39 per cent of program spending in 2003 before plateauing there until 2008. It has been falling since.

 

Provincial health-care costs decreased from 39.3 per cent of program spending in 2008 to 37.7 per cent in 2010. In Ontario, the decrease was even more startling, from 45.5 to 40 per cent. Of course, governments increased non-health-care spending during the recession as welfare, employment insurance and other costs rose. But CIHI forecasts provincial health-care spending will fall this year as a share of GDP from 7.8 per cent to 7.5 per cent.

 

It would be nice if those who spew fire and brimstone about rocketing health costs would read the annual CIHI reports. Then maybe we could get onto the three big issues that get little or no media attention.

 

(Continued)

[aaronjw]

The 80% figure is nonsense. Of course most of what Ibbitson says usually is.

 

A much better article:

 

Percent change health care expenditure for Canada from 2004 to 2011 (forecast) has 52.1% increase (page 144 of the CIHI report) and a 41% increase in per capita spending.

[aaronjw]

I'd also like to know where they got this from:

 

But CIHI forecasts provincial health-care spending will fall this year as a share of GDP from 7.8 per cent to 7.5 per cent.

 

Page 146 of the same report shows that we have gone from 10.2% of GDP on 2004 to 11.6% of GDP in 2011.

[A-Stark]

That would be total health care expenditures (private and public). What's your point? See Figure 38, p. 56.

 

Yes, and in the meantime we've had slow growth or actual recession. If output in other parts of the economy drops - and it has - without major public sector cuts (and there haven't been any), of course health care will take a larger share. And (private) spending on drugs, for example, has not exactly taken a hit.