Why it’s easier to avoid a shock to health care – The Globe and Mail

Why it’s easier to avoid a shock to health care – The Globe and Mail.

Jeffrey Simpson

Why it’s easier to avoid a shock to health care


B.C., like other provinces, is desperately raiding every piggy bank to pour revenue into health care


Jeffrey Simpson

Jeffrey Simpson

The recent B.C. budget got it wrong. “If government health spending continues to grow at the current pace,” it said, “it will increasingly crowd out spending in other areas.” In fact, the crowding has been happening, is happening and will happen. It’s the same cost pressure within every provincial budget, as citizens will again see as those budgets roll out in the weeks ahead.

Not one provincial government is immune from the health-care cost pressures, and not one has any idea how to avoid that pressure. Cabinet ministers talk, as they do in B.C., about new funding models for hospitals, new administrative arrangements for health-care authorities and new initiatives to make people eat better and stay healthier. But they’re kidding themselves, and the people.

Consider the raw B.C. facts. From 2009-2010 to 2012-2013, health care will rise by $2.1-billion. This year’s increase totals $661-million, next year’s $920-million and the year after that $447-million. (This relatively small increase in 2012-2013 is a wish, not a serious estimate, since the increase will absolutely be higher.)

So let’s compare other spending areas with the $2.1-billion increase for health-care during this three-year period.

Advanced education, flat. Children and family development, flat. Housing and social development, flat. Public safety, flat. Tourism and culture, flat. Forests, cut. Environment, cut. Aboriginal relations, cut. Agriculture, cut. Citizens’ services, cut. Only two budgets, apart from health care, are rising: Education will go up $240-million, and transportation $70-million.

A decade ago, health care took about 34 per cent of B.C.’s budget. It will reach 42 per cent next year, and 45 per cent a few years thereafter. Again, this share of total government spending is roughly similar in all provinces except Quebec, where the governments can pay health-care professionals less because few will leave a francophone environment.

B.C., like other provinces, is desperately raiding every piggy bank to pour revenue into health care.

Provincial lotteries and other gaming institutions were created long ago, ostensibly to pump profits into culture and recreation. No longer. In B.C., 20 per cent of the moneys from gaming go to charities and local governments. The bulk enters the Health Special Account.

The B.C. government has taken the politically courageous decision to harmonize the provincial and federal sales taxes into a single HST. The new tax is already highly controversial. To provide some political cover, the budget announced that all additional revenue collected from the HST will be spent on – wait for it! – health care.

Premiums, HST revenue, gambling revenue, tobacco taxes and, of course, transfers from Ottawa (indexed at 6 per cent) are all being thrown into the health-care spending maw. And still, the revenues are not enough. Complaints from organized labour, patients, doctors and hospital administrators about underfunding are a staple of public discourse.

The health-care system’s costs grow at about 6 per cent each year in almost every province – a growth rate double the inflation rate adjusted upward for population growth. That the B.C. government promises to reduce the health-care increase to 3 per cent in two years is the kind of nonsense peddled a few years ago in Ontario when the McGuinty government promised to slash the yearly increase roughly in half. That promise, of course, was silly the moment it was made.

A strange disconnect frames the discussion about health care across Canada. In private – almost always in private – premiers, ministers, civil servants and health-care administrators moan about the cost pressures. They insist these increases cannot continue. The costs are killing our budgets. Occasionally, a brave politician will say so publicly, as B.C. Premier Gordon Campbell has several times. But even he can’t rein in the cost increases that are inherent in the existing system.

Politicians are frightened to raise the issue with the public, because three options essentially lie before each province. Raise new revenues for the system through higher taxes or fees. Keep cutting most of the other departmental budgets, a process already under way. Or change the system – not by fiddling with administration or preaching “best practices” and electronic health records (both of which are needed) but by allowing more private money within the public system, or outside of it.

All of these options would create a big political row. Unions would defend their entitlements and scream about “private” medicine. Taxpayers would bellow about higher taxes. Those who depend on government spending in non-health areas would raise a ruckus. Actual or would-be patients would be scared. Touch the secular Canadian icon of health care and die politically.

It’s far easier, therefore, to just keep spending, cutting other budgets, raiding piggy banks, counting on munificent federal transfers, fiddling with administrative arrangements, and promising “change,” “innovation,” “new delivery methods” and the other buzz words of the health-care world.

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