Why We Need to Talk About Health Care

Canada's next prime minister will shape the health-care system for years to come.

Despite the fact that poll after poll indicates that health care is among the most important concerns for Canadians this election, until a couple of days ago neither Conservative Prime Minister Stephen Harper nor Liberal Leader Michael Ignatieff were making health care a major issue in this campaign.

The current federal-provincial deal on health-care funding is set to expire in 2014. That means that the next prime minister will likely be leading the federal side of the negotiations on health care. The Canada Health Transfer is the major federal contribution to health-care funding. At roughly $25 billion, it represented roughly 20 per cent of total public-health costs in 2010. Most importantly, under the current arrangement it grows by six per cent each year.

With health-care costs growing faster than GDP in most provinces in Canada , the six per cent annual growth in funding from the federal government has played a very important role in helping most provinces fund their obligations.

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Increasing the Canada Health Transfer by six per cent without increasing revenues (i.e. taxes) is extremely challenging. In fact, the federal finance minister has acknowledged that he doesn’t believe it can continue. It would require either further substantial cuts to other departments or further deficit financing beyond the balanced-budget date targeted in the most recent budget. Clearly this isn’t in the Conservatives’ plan.

While the Liberals have put forward a number of new initiatives that require some new revenue, transferring more money to the provinces for health care is not among them. Presumably the Liberals are offering social policies where they believe the federal government can take some ownership and credit for the program. Simply transferring more funding to the provinces to deliver health care is unlikely to be a signature achievement. Once again, the platform does not contemplate engaging Canadians about increasing revenues to help fund health care going forward.

What should our leaders be talking about when it comes to renegotiating the health accord? Discussions should centre around a balanced approach to long-term financing, improved value for the money we spend, and what Ottawa’s role should and can be.

Value for money: Canadians rightly expect that our tax dollars are spent effectively. There are a number of ways the system can improve, and governments across the country are progressing in making these improvements. Provinces are starting to move away from paying doctors for the quantity of service provided and toward quality of outcomes. Hospital budgets are transforming from simply a large base budget to payments that are based on the expected needs of the population and the costs of the services that are expected. Provinces are beginning to look at ways to synthesize best practices, whether it involves physicians, testing, or drug therapies. Changing the way the system operates is slow and costly work, but we are moving in many right directions. This needs to continue.