Health care sustainability: evidence shows this debate should have been long over

Over the weekend CPAC was playing excerpts from two conferences – one on drug coverage the other on health care sustainability.

The first, Rethinking Drug Coverage, was held in Ottawa May 24-25 and was co-hosted by the Canadian Health Coalition and Carleton University. Most of the sponsors were public sector unions.

The second, the Western Summit on Sustainable Health Care, was hosted May 23 by the Conference Board of Canada in Edmonton. The Conference Board  claims to be “objective and non-partisan” but mostly reflects the interests of Canada’s business class. Most of their conference sponsors were corporations.

Despite the recent decline of health care as a percentage of both the size of the economy and provincial spending, the Conference Board took to the podium with the same “sky is falling” rhetoric we’ve heard for the past five years on sustainability.

Do these people really have no shame?

Last October the Canadian Institute for Health Information noted: “For the third straight year, growth in health care spending will be less than that in the overall economy. The proportion of Canada’s gross domestic product (GDP) spent on health care will reach 11.6% this year—down from 11.7% in 2011 and the all-time high of 11.9% in 2010.”

While former TD economist Don Drummond and others were projecting health care to eat up most of the provincial budget, Ontario is spending 41.8 cent of every program dollar on health care this year, down from 43 cents in 2009-10.

Now that the data doesn’t really support the notion that health care is going to rise to be 70-80 per cent of provincial budgets and crowd out education and social programs, the Conference Board is getting far more creative in how it bends the truth to scare us into accepting their ideas about reform.

Daniel Muzyka, CEO of the Conference Board of Canada, said that while health care costs are going up by an average of 6 per cent each year, the economy was only projected to rise by 2 per cent annually for the next decade.

Muzyka holds a Doctorate of Business Administration from Harvard University, therefore he should be aware of the basic fallacy of comparing real growth against nominal costs. His projections on economic growth over the next decade are also conveniently very conservative and far less than the 2.6 per cent average annual growth to 2030 projected by the Ontario Ministry of Finance. (12-month forecasts have been far from accurate lately, making us wonder about the folly of a 10-year forecast anyway).

Real growth is the measure of how much the economy grows over and beyond inflation. For example, this year Ontario is projecting real growth of 1.6 per cent. The government estimates that inflation will average 1.5 per cent. Therefore, to find out the nominal growth, you add those numbers together. At 3.1 per cent nominal growth in the economy, health spending – budgeted at two per cent annually for the next three years in this province – looks more than just sustainable.

Looking at total cost increases out of context can be very misleading. In 2010 the Canadian Institute for Health Information released a major report on national expenditure trends in health care.

In it they noted that while total spending on health care in Canada – both public and private – rose 5.2 per cent over the previous year, when adjusted for both inflation and population growth, the real cost of spending per person was expected to rise by 1.4 per cent, what CIHI noted was the lowest annual growth rate seen in 13 years.

What’s sad about what business groups like the Conference Board and others are doing is distracting us from the real issues around health care reform.

As much as they say privatization is a red herring, we are faced with great difficulty managing reform in sectors such as home care and long-term care precisely because of entrenched private interests.

The same goes for pharmaceuticals.

Drugs are integral to a modern health system, yet Canada remains an outlier in ensuring all citizens have access to needed pharmaceuticals.

The other conference CPAC has been airing addresses this question, and the evidence is very strong that we can save billions by joining the rest of the developed world in providing public drug coverage to all of our citizens. This is the real low hanging fruit.

It’s not a question of can we afford to do it, but can we afford not to? With potentially $10 billion or more in savings at stake — about five per cent of all health spending — why are the media and the business classes not advocating for this kind of reform? Perhaps it may have something to do with entrenched interests of the pharmaceutical and insurance companies?

Lastly, CIHI’s 2012 report also noted another disturbing fact that went underreported – the percentage of public spending in health care has gone down in the last year, dropping to 65 per cent. This is after decades where the public portion barely budged from the 70 per cent level.

That private portion is far more comparable to the U.S. system, where there is a mix of private, public and no coverage for citizens. Dentistry, drugs and rehab all fall into that category in Canada. How efficient is it? The U.S. has the highest per capita spending on health care in the world and startling poor health outcomes to show for it.

Is that the kind of system we really want to see expand in Canada, because the evidence would suggest that’s where we are going. As much as the right likes to talk about Europe, the data would suggest we are becoming a lot more like the United States in this regard.

The other side likes to say we are defending our turf, that we are an obstacle to moving on from the status quo. Yet the presence of the labour movement at the other conference on drug coverage would suggest a deep interest in meaningful reform based on evidence, not the flim flam we just saw from the Conference Board of Canada.

As we noted last week, we know we’re all in this together. Even the wealthy cannot shelter themselves if we fail in this endeavor. We can start by at least being honest about the current state of affairs rather than trying to scaremonger Canadians using completely misleading data.

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