The Chopping Block: 5. Health transfers


The Chopping Block thus far

The Chopping Block is an ongoing FP Comment series on how to cut federal spending and balance the budget. Previous instalments include:

1. Canada Health Infoway Estimated savings over four years …………… $400-million

2. Business subsidies Potential savings over four years ………………… $8-billion

3. Green energy Minimum savings over four years: ……………………… $1-billion

4. Pension reform Minimum estimated savings over four years: ……… $2.3-billion

5. Health transfers Minimum estimated savings over four years: ……… $6.6-billion

TOTAL SAVINGS OVER FOUR YEARS:                                  $18.3-billion


Extrait de: The Chopping Block: 5. Health transfers, By Niels Veldhuis and Nadeem Esmail, Financial Post, Oct 13, 2011

Cut transfers to ­provinces while giving them the freedom to ­experiment

The federal government should not only cut its own departmental spending, it should also cut federal health transfers to the provinces.

To understand why the federal government needs to rein in transfers to the provinces, consider the growth in transfers for health care. Since 1997-98, the year the federal government finally balanced its budget after decades of persistent deficits, federal health transfers to the provinces increased at an average annual rate of 10.5%.

For comparison, the average rate of economic growth was 4.9% over that period, federal revenues grew at an average rate of 3.2%, and the rate of population growth and inflation was 3%. By any measure, the increase in health transfers has been unsustainable.

In fact, had the federal government simply increased health transfers to coincide with population and inflation growth, it would have saved $98-billion since 1997-98.

But what did Canadians get for all this money?

Remarkably, wait times from GP referral to treatment by a specialist were 53% longer in 2010 than they were in 1997. Wait times were also slightly longer to access critical technologies such as CT and MRI machines, and markedly longer for ultrasounds. In addition, almost 1.7 million Canadians aged 12 or older, 6% of the population, are still unable to find a regular physician.

Put simply, Ottawa sent $98-billion in excess transfers to the provinces while the health-care system continued to deteriorate.

In reality, the primary problem with our health-care system is not a lack of money; it’s that the federal government discourages the provinces from experimenting with policies (i.e. competition in the financing of health care and cost sharing) that have been successfully employed in other developed nations with universal-access health care. And the provinces comply in part because they fear losing a substantial portion of their transfer revenue.

Il a tout à fait raison:

Nos politiciens fédéraux se comportent comme la vierge offensée, il ne faut pas toucher à notre modèle de santé, évidemment pour bien paraître devant la population. Par contre, ce carcan idéologique empêche aux provinces d'avoir la souplesse nécessaire pour optimiser les dépenses de la santé, ce sont les provinces qui ont le cadeau empoisonné, créant des déficits structurels particulièrement à cause de l'accroissement des couts de santé

Une vraie hypocrisie politique, vous pensez que le Congrès américain est dysfonctionnel, nos politiciens fédéraux et provinciaux sont aussi dysfonctionnels, à savoir si le système de santé est efficace, c'est le moindre de leurs soucis, c'est de gagner des votes et de rester au pouvoir.

Entre temps, peut-être le fédéral va atteindre un équilibre budgétaire ? mais les deux provinces les plus populeuses risquent d'être en déficit structurel indéfiniment à cause du coût de la santé qui s'accroît plus rapidement que les revenus.

Remarquez, ce marché de dupes par rapport aux agences de notations ne fonctionneront pas éternellement, s’ils constatent que les provinces les deux plus populeuses ne peuvent atteindre sérieusement l’équilibre budgétaire, le Canada peut subir une décote comme l’Espagne à cause de leurs régions.

The federal government can solve two problems with one simple policy change:

1.      Reducing health transfers to the provinces. This would both help address Ottawa’s fiscal situation and improve the health-care system. The key is to give the provinces more flexibility to experiment with different models of health-care policy.

2.      Revising the Canada Health Act to require universality (ensuring all citizens have health insurance coverage) and portability (ensuring citizens have insurance coverage when they travel and move within Canada), with all other requirements being eliminated, will give the provinces the necessary freedom to experiment.

For those not yet convinced, our own history provides the evidence.

The 1995 federal budget included a major reduction in the total amount transferred to the provinces. Transfers were not only reduced, but also reformed.

Prior to 1995, federal transfers for social services were based on federal-provincial cost-sharing. That is, the federal government paid up to half of the amount that provincial governments spent on social services and social assistance. The provinces decided on the amount of social services and social assistance spending, and simply sent the federal government a bill for half the cost.

The 1995 budget reformed federal transfers by moving away from federal-provincial cost-sharing to a block-grant approach in which the amount transferred by the federal government to the provinces did not depend on provincial spending.

The move to a block grant represented a significant step forward in allowing greater provincial flexibility and control of social service provision. It was now up to the provinces to determine where and how the transfer money was spent and it also meant that any expansion of programs or benefits would be paid for by the provinces exclusively.

Placing the financial responsibility for these programs squarely on the shoulders of the provincial governments led to a wave of innovation and experimentation among the provinces that greatly improved social services.

Études économiques de l’OCDE : Canada, septembre 2010

OCDE- Canada 2010Le système de santé canadien doit s’imposer des réformes majeures pour contenir les pressions qui s'exercent sur les dépenses.

 

Le système de santé affronte des défis majeurs

 

1.       Transfert d’Ottawa plus permanent et plus stable pour les provinces

2.       Financer les hôpitaux sur la base de l'activité

3.       Dépolitisation des négociations avec les médecins

4.       Pour les médecins, rémunération selon le nombre de patients

5.       Instaurer les contrats mixtes public-privé et supprimer les pour les monopoles publics

6.       Un système public pour réduire les coûts des médicaments

7.       Agence pancanadienne pour l'analyse de la qualité des soins

8.       Délégation de tâches des médecins à des infirmières

9.       Introduction d'une participation financière des patients

 

Critically, rates of dependency on social insurance fell while labour-market participation improved, making Canadians much better off than they were prior to the change in transfers.

Unfortunately, Finance Minister Jim Flaherty has indicated the government has no plans to reduce federal transfers to other levels of government. He should reconsider. Even if Ottawa simply maintains per-capita health transfers over the next four years — that is, if it increases transfers at population growth plus inflation — it could save approximately $6.6-billion.

The bottom line is that transfers can be reduced while improving our provincially delivered health-care programs.

Niels Veldhuis is a senior economist and Nadeem Esmail is a senior fellow with the Fraser institute.


03/06/11

La maladie chronique des dépenses en soins de santé. Dans ce rapport, nous avons tenté de diagnostiquer la maladie des dépenses et de fournir un pronostic de son évolution. Ce pronostic n’est pas favorable, même si nous réussissons à améliorer de façon incroyable l’efficacité de la prestation des soins de santé. Mais la maladie des dépenses doit être contrôlée. Maintenant, c’est aux Canadiens à tenir une discussion sérieuse concernant la façon de le faire. 5 x graphiques + 1 x document.

22/04/11

Canada's Medicare Bubble: The provinces are bankrupting themselves to pay for a health care system that is fundamentally broken, the report makes five additional recommendations. Excellent document + 2 x graĥiques.

09/11/10

Comparabilité des dépenses de santé entre les pays, cette section présente l’information sur les dépenses de santé des 26 pays qui respectent le plus fidèlement possible les limites proposées dans le manuel de l’OCDE quant aux soins de santé, 7 x graphiques.