Saturday, July 07, 2007

What Will BC Liberals Mean by "Sustainability," When it Comes to Health Care?

With the Liberal Government's "Conversation on Health Care" wrapping up on July 7, and new legislation on healthcare reform being promised for the spring, recent articles by Dr. Irfan Dhalla on "Canada's health care system and the sustainability paradox" and by Dr. Francois Beland on the "myth of unsustainabilty" in the most recent Canadian Medical Association Journal (CMAJ) make timely reading.

Dr. Dhalla argues that to assess the sustainability of health care on the basis of health spending as a proportion as a share of government expenditures is highly problematic. In the first place, it depends on the assumption that that the percentage of government expenses devoted to health care depends primarily on how much governments spend on health. When measured by percentage of government expenses, health spending also depends on 2 other key factors: how much governments spend on non-health-related items (e.g., education, police services, social assistance) and how much governments collect in taxes. If a government reduces its spending on non-health-related items or cuts taxes, the percentage of expenditures devoted to health care will increase automatically. Dr. Dhalla gives as an example the province of Ontario, where the share of expenditures devoted to health care actually declined between 1988 and 1998 from 38% to 35%---and then shot up again, because of "reductions in spending on non-health-related items, tax cuts and reductions in transfers from the federal government."

British Columbia provides an even clearer example of this "sustainability paradox": remember how the Liberals maintained health care and education spending and then made across the board spending cuts of 24% in all those other ministries to pay for their stupid tax cuts? Well that was fine, except that it had the effect of greatly exaggerating the impression we had that health was displacing all other expenditures--instead of blaming their tax cuts and their consequent cutbacks, Campbell and Taylor started blaming growth in health care spending instead.

Furthermore, an assumption underlying the view that health care spending must be unsustainable is the view that tax rates must be fixed or gradually declining. In fact, taxes have risen from an average rate of 30% of GDP in OECD countries to 36% since 1985, while Canada's rate has remained relatively constant at about 33%, suggesting that some increase in tax rates would be consistent with international standards.

In terms of sustainability, spending on health care itself is unimportant; what matters is how much we have left to spend on our other needs and desires: "In other words, growth in health care spending is sustainable provided it does not reduce the average Canadian's ability to purchase non-health-related goods and services." On this view--assuming that real spending per capita on health care grows at 2.3% per year, while economic growth continues at 1.7%--Dr. Dhalla demonstrates that "the amount of money left for non-health-related spending would continue to increase for well over a century."

Dr. Beland describes the myth of unsustainability as a simple "arithmetic failure"--"medicare assessment requires medicare expenditure data in the numerator, and data on government total income from all sources in the denominator." The most alarming claims about unsustainability merely argue that the problem is in the numerator (i.e., in government health care expenditures).

All of this is very reassuring to the members of the BC Health Coalition and other public interest groups who have been vigorously arguing in favour of maintaining public health care during the past year. But does it really address what both Gordon Campbell and Carole Taylor have been hinting at all along, between the lines? Their consistent message has been that a system is "public" as long as there is a single public payer. By this definition, a health care voucher scheme would qualify as "public". (Remember BC Rail is still "public", because we own the rail bed!)

And that leaves a lot of room for privatization of health care delivery. The kind of reform of delivery options that Campbell and Taylor have in mind could entail the transformation of regional health authorities into primarily buyers of services. That is why my next blog entry about health care will concern the very important subjects of the "purchaser-provider split" and "contract management." They may be coming to a regional health authority in your neighbourhood--and sooner than you think.

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