Sustainability panic unwarranted says Rachlis

Dr. Michael Rachlis speaking to the Students For Medicare conference May 28.

Dr. Michael Rachlis wonders about the credibility of the scary health care scenarios painted by former Bank of Canada Governor David Dodge and TD Economics’ Don Drummond.

Dodge and Drummond have authored reports suggesting that health care spending will not be sustainable unless dramatic changes take place.

Speaking to a Students for Medicare conference May 28th, Rachlis questions the ability of Dodge and Drummond to do 20 year projections when “they don’t even have this year right.”

As a percentage of our total economy, public spending is up by 0.6 per cent since the last recession in 1992. Private spending – through private insurance and out-of-pocket health expenditures – is up by 0.9 per cent.

Rachlis has been particularly critical of Dodge, who appears to be deliberately ignoring data from 2010 which shows health care spending in decline relative to the size of the economy.

While Drummond and Dodge have suggested solutions may emerge in greater private involvement, Rachlis says the numbers show that public spending is much more controllable than private.

“In a multi-payer system companies can take advantage of the fact that people will have less purchasing power,” he said.

Looking across Canada, Rachlis says that if Alberta were a country it would be spending less than any other industrialized country in the world.

“Yet they are screaming they don’t have health care sustainability either,” he says.
“In Quebec their spending has remained flat for 30 years, and yet they are subject to the same hysteria.”

Even as a percentage of government program spending, there is little to suggest that health care costs are unsustainable – most of the growth related to a shrinking revenue base through tax cuts. In the early 1990s government spending accounted for 53 per cent of the economy. Just prior to the recession it was below 40 per cent. Government revenues has fallen by 5.4 per cent relative to gross domestic product (GDP) in the last decade, adding up to a loss of $90 billion.

“None of that money has gone to any of you in the room,” he says.

With half that amount we could implement pharmacare, national child care, deliver free university tuition, and still buy the fighter jets.”

“We have made a choice, but not a deliberate choice,” he said.

Both Dodge and Drummond show a sudden surge in their charts where the spending line heads 45 degree upwards, consuming between 70 and 80 per cent of provincial program spending.

Rachlis says he doesn’t understand how they arrive at this figure. Since 2003 spending as a percentage of overall provincial program spending has remained flat at about 39 per cent across Canada.

Rachlis warns that Tony “Huntsville Gazebo” Clement is promising to cut public spending further, even though Canada and the US spend almost equal amounts on public services as a percentage of the size of their economies.

“The Canadian public sector has never been smaller than the American,” he said.

Dispelling the myth that aging will escalate costs, he says aging “is like a glacier, not a tsunami.”

While health care spending is hardly out of control, Rachlis believes there are better ways to organize our present system to make it more effective.

“Our system was designed for acute illness. Our main problem is chronic disease.”

Canada also lags behind most developed countries in advanced electronic health information capacity.

“You grow up with computers and you get to health care and you are dealing with pieces of paper,” he says.

Canada also does badly in after hours care to see a doctor or nurse, and especially long waits to see a specialist.

“The original vision of Tommy Douglas was perfect,” he says. “Due to compromises, we never followed through.”

Rachlis says the solutions are in integrated health care delivery, group medical practice, and democratic governance.

He warns that the present Federal government is intent on getting out of health care altogether, leaving it to the provinces.

The 2004 Health Accord gave very little guidance on how Federal money would be spent, it being about more funding than how the system would be organized.

“If we are prepared to think outside the box, we can fix Medicare through innovation,” he said.

The first stage of Medicare was to eliminate financial barriers. The second stage was meant to deliver services to keep people healthier.

“That’s the real road to sustainability,” he said.