Proceedings of the Standing Senate Committee on
National Finance
Issue 22 - Evidence - June 14, 2012
OTTAWA, Thursday, June 14, 2012
The Standing Senate Committee on National Finance met this day at 1 p.m. to study the subject-matter of all of Bill C-38, an Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures, introduced in the House of Commons on April 26, 2012.
Senator Larry W. Smith (Deputy Chair) in the chair.
[Translation]
The Deputy Chair: Honourable senators, today, we are continuing our study on the subject-matter of all of Bill C-38, an Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures introduced in the House of Commons on April 26, 2012.
[English]
Honourable senators, this is our nineteenth meeting on the subject matter of Bill C-38. This afternoon we will be looking at Division 17 of Part 4, amendments to the Federal-Provincial Fiscal Arrangements Act. This is found at page 285 of the bill.
We welcome Dr. John Haggie, President of the Canadian Medical Association. From the Canadian Institute for Health Information we welcome Jean-Marie Berthelot, Vice President of Programs; and Chris Kuchciak, who is Manager of Health Expenditures.
Dr. Haggie, I understand you have some brief opening comments. We will begin with you and then move to Mr. Berthelot.
Dr. John Haggie, President, Canadian Medical Association: On behalf of the CMA and its 76,000 members, I would like to thank you for the opportunity to appear before this committee.
Recognizing the Senate's reputation as the chamber of sober second thought, I know that committee members are open to hearing the views of all Canadians; and having appeared before other Senate committees, I also know that senators tend not to think of well-intentioned critique as necessarily a bad thing. As an organization that advocates for health and health care on behalf of Canadians, we at the CMA do try to be constructive, and I hope it is in this spirit that my comments will be taken.
As everyone knows, the 2012 federal budget is a vast and wide-ranging document. From the standpoint of health, it contains both measures that are of interest and others that are less so. On the whole, however, we are disappointed that this budget does little to further what we believe should be a major goal of the federal government: to develop a plan to work with the provinces to transform our health care system so that it meets the 21st century needs of this country.
Significantly, the budget will enact the commitments for health care transfers announced last December by the Minister of Finance. We believe this predictability in federal funding serves a useful purpose in helping the provinces manage the delivery of health care services. However, we are concerned about changes to service delivery to veterans, to mental health programs for our military, and to the Employment Insurance program.
We are also concerned about changes at the Canadian Food Inspection Agency and the Public Health Agency of Canada. Will they have an impact on the health of Canadians? We hope they will not, but at this point we do not know.
One thing that is for certain is that the deficit should not be slain on the backs of the elderly poor through delaying their OAS benefits for two years. This could have serious consequences on this already vulnerable group, and we have to wonder why this change is being made in light of analysis by the Parliamentary Budget Officer and others that this is not necessarily from an actuarial standpoint. Further, we are also concerned about the impact on provincial programs and budgets as the federal government reduces or drops some of its traditional responsibilities in health.
The federal government plans no longer to provide health care for the RCMP. That, cuts to the Federal Interim Health Benefit for refugees, and the OAS changes will in fact lead to greater pressures on the provinces.
Cuts in one jurisdiction that lead to greater strains in another are not savings. They may make one set of books look better, but what is the value to Canadians if they hurt the bottom line elsewhere whilst also degrading our social safety net?
What could this budget have included that it did not? For one thing, a national pharmacare program, which was a commitment in the 2004 10-year plan to strengthen health care. About one in ten Canadians cannot afford their prescription medications, and that percentage is higher in my home province of Newfoundland Labrador.
Most of all, this budget lacked any vision for the future of health care. We were encouraged six months ago when the Minister of Health indicated her wish to collaborate with the provinces and territories on developing accountability measures to ensure value for money and better patient care. We look forward to seeing the minister's plan. My colleagues here today from CIHI will be touching on some of the existing data that could inform this plan.
While we have a funding commitment from the federal government, we do not have a national vision or coordinated plan for health care established with the provinces and territories. This is critical because health care is not just about money; it is about what you do with it.
We believe that one way in which the federal government could fulfill its leadership role in health care is by applying an evidence-based health impact assessment to all cabinet decision making. All decisions would have to be viewed through the lens of possible impacts on health, health care and Canada's overall health objectives. A similar model is in use in New Zealand and some European countries.
We would welcome the opportunity to work with the federal government and other key stakeholders in developing a model for a health impact assessment for Canada.
The Senate of Canada has delivered a number of extremely solid reports relating to health care, most recently in March with Time for Transformative Change: A Review of the 2004 Health Accord. With its recommendation that the federal government leverage its considerable expenditures on health care to transform the system through incentives, measurable goals and public reporting, this report is an excellent starting point for modernizing medicare.
Indeed, there are a slew of solutions at hand in search of political leadership. Health care is a large and complex system. Ensuring comparable levels of quality care across the country requires partnership, yes, but also leadership.
In that sense, the 2012 federal budget was an opportunity missed to articulate a vision and a plan for an effective and modern pan-Canadian health care system. Thank you.
The Deputy Chair: Thank you, doctor.
Jean-Marie Berthelot, Vice President of Programs, Canadian Institute for Health Information: Good afternoon. On behalf of the Canadian Institute for Health Information, I would like to thank you for inviting us to participate in your review of amendments proposed in the Federal-Provincial Fiscal Arrangements Act. We have prepared a slide deck, and I will be following through. We have not been able, due to the short notice, to prepare a formal briefing to the committee, so please accept my apology for that. I will start on slide 3.
[Translation]
CIHI is an independent not-for-profit organization that provides key information on Canadian health systems and the health of Canadians. Founded in 1994, CIHI is funded by federal, provincial and territorial governments. We are governed by an independent board of directors that represents health ministries, regional health authorities, hospitals and health sector leaders from across the country.
CIHI works with sector stakeholders to develop and maintain a wide range of health information databases, measures and standards.
We produce reports on health services, the health of Canadians, and health expenditures and human resources.
[English]
CIHI holds the most comprehensive source of information on health care spending in Canada, which we report on annually through our national health care expenditure report. Data is collected from five sources including federal, provincial, territorial and municipal governments, worker compensations, other social security funds and the private sector.
The information supports policy planning and decision making at the provincial, territorial and national levels, and for provincial, territorial, national and international comparison reporting.
Moving to slide 4, last year health expenditure reached $200 billion in Canada. It is an increase of 4 per cent more than the previous year and the slowest growth rate observed in the last 15 years.
Health care spending accounts for 11.6 per cent of the gross domestic product in Canada, and the public-private split in terms of the financing has remained stable for more than 10 years at about 70/30; 70 per cent public and 30 per cent private.
When we are looking at health expenditure, it is important not just in the Canadian context but to look at the international context. On slide 5 you see what is called the growth of health expenditure versus the growth of the gross domestic product. We see that during the period of economic growth, all or most of the developed countries invest proportionally more in health care than the growth in GDP. For each dollar growth in GDP, there is an investment of a bit more than a dollar in health care spending, a proportion of 1 per cent.
You see that gross domestic product is really a significant driver of the increase of health expenditure, not just in Canada but across the developed world.
On slide 6, the graph shows the trend in terms of the proportion of GDP devoted to health spending. You see a trend where there is a significant increase. We see a significant blip in the curve where there is a recession because health care expenditures do not stop when there is a recession. People still need access to care, and you see a reduction following a recession when provincial governments are controlling their budget deficit. That is what you see over time. That is what you see in the last two years after the 2008 recession. There seemed to be a reduction of the proportion of the gross domestic product devoted to health. This is the result of governments trying to control their budget deficits.
Overall, you see a trend of increased spending in the health care system.
With the next slide we have done an analysis looking at the factors that explain the growth in health expenditure in Canada between 1998 and 2008, to try and understand what the real drivers are behind that increase.
We see that general inflation is a significant factor, and explained 2.8 per cent of the 7.4 per cent average increase over that 10-year period. That is an annual increase.
Population growth accounts for about 1 per cent. Population aging is less than 1 per cent. Together, those two factors account for about 2 per cent of the growth.
We have what is called a residual or other factor which includes increased offer of services, use of technology and inflation specific to the health care system. During that period, there was an estimated inflation of about half a percentage point specifically related to the health care sector.
I talk about aging and population growth on the next slide. What is important to notice here is that this phenomenon varies quite significantly from one province to the next. Alberta, which has seen an economic boom, effectively has quite a significant increase in its population. The increase in population is a factor that explains a significant proportion of the growth in Alberta.
However, Eastern provinces — Quebec and the Atlantic region — have a population that is older, and you can see the aging effect. This older population is even getting older, while a population like Alberta is getting younger. The effect of aging is more pronounced in the Atlantic region, but also in Saskatchewan and British Columbia.
When we look at government expenditure on the next slide, we also need to look at the needs of the population. This graph presents the utilization of health care services in dollars by age group. There is a clear relationship between the need and the age of the population. This factor is also reflected in the previous slide where you see that provinces which have a population that is aging faster effectively see the aging contributing more to the increase in terms of their expenditure.
In closing, growth and health care spending is slowing down as a result of budget deficit reduction efforts. The major cost drivers of public sector health care spending in the past decade were compensation of health care providers and increased use of services and evolution in the types of services provided and used. Population aging and population growth, which together account for about 2 per cent increase a year of health expenditures, are expected to exercise the sustained pressure on the health care delivery system.
We thank you for the opportunity to present this information to you. Mr. Kuchciak and I will be pleased to answer any questions you have in the official language of your choice.
The Deputy Chair: Thank you, Mr. Berthelot.
Senator Eaton: Dr. Haggie, I am a member of the St. Michael's Hospital Foundation in Toronto. What always surprises me is that, one, we all have to remember that health care is very much a provincial matter, but two, why doctors themselves do not come up with solutions to health care costs. You are right there, on the line. You know as well as anybody that someone who is actually doing the job learns to do it more efficiently or sees better ways of doing it.
Perhaps I have missed it, but does the CMA ever come through to the health minister and say, you know, if you could do these two things or could you promote these two things it would be helpful? After all, you and nurses are at the forefront of health care in this country, and I do not see much pushback from you in how things could be improved.
Dr. Haggie: That is an interesting question. In no particular order, there are lots of innovative hot spots across this country where physicians and regional authorities, by and large, have gotten together and done some really interesting things. On a provincial level, there is the involvement in B.C. with the new physician services and GP liaison with team-based care. In Alberta there are the primary care networks. In a variety of jurisdictions you have these good ideas. Indeed, in this very province the physicians actually attempted to sit down with the provincial government and negotiate fee reductions and re-distributions that would have saved the provincial government at least $250 million or possibly $300 million a year.
Senator Eaton: Yes, but that is not making service delivery more interesting or efficient dealing with the change in demographics. In the media in Ontario we read all about fees, but we did not read about innovation.
Dr. Haggie: There are two things there. One is the primary care networks in Alberta, for example, the initiatives in B.C., and some of the community health centres in Quebec are dealing with that very issue. The idea is to put the right provider in touch with the right patient at the right time, and there is no fixed idea about what that should be; it very much depends on the patient's needs at that moment. Those networks are in place.
The catch is that there is no national dissemination point or repository for how you can share that information.
Senator Eaton: That is another question. I think that is a very good idea. I support a national repository, but when you talk about service delivery, there is no overall national vision for service delivery.
Dr. Haggie: There never has been. The federal government walked away from that one.
Senator Eaton: Could the federal government ever hope to impose on 10 very independent provinces a national service delivery when, as Mr. Berthelot's graphics show us, they each have very different kinds of demographic populations? Every province should come up with its own. Therefore, is it not an excellent thing that it is being done at the provincial level?
Dr. Haggie: I think you need to have some national standards. Canadians told us very clearly that they expect a roughly similar level of service in roughly similar areas across the country, bearing in mind the geographical constraints.
One of the issues has always been how you would do that. We, among other organizations, have suggested a rather principled approach that could be adapted to the needs of individual provinces. Therefore, there is some flexibility.
The Council of the Federation has attempted to step in regarding some of the areas you have described in terms of scope-of-practice models and clinical practice guidelines for best clinical and surgical practices across the country. That is an untested mechanism and remains to be seen. However, there has never been any evidence of a national plan from the federal government.
Senator Eaton: I am not sure they see it as their job. I quite agree with you that it is their job to impose national standards; we want national standards. We expect all Canadians to have equal health, but I really think that nurses and doctors have to continue doing innovation at the provincial level. Maybe it is up to organizations like the CMA to pass along and to become a clearinghouse for the best practices.
Dr. Haggie: The CMA actually is the biggest single repository of clinical practice guidelines in Canada. It exceeds in number and quality almost any jurisdiction in the world.
The key word in the questions that you have posed is "impose.'' You cannot mandate change. If you talk to change management experts, they will tell you very clearly that this is a process, and imposing it by fear will not work because it is not flexible. What you have highlighted in your question is the need for flexibility locally, be it at a regional level or a provincial level. The facts of the case are that the only way you can do that is by a combination of national principles, standards and guidelines, combined with regional and provincial initiatives to actually implement those through some mechanism.
Whether the federal government agrees with the CMA's interpretation of the Constitution is up to the federal government. However, the facts of the case are that Canadians have told us they want the federal government involved nationally in health care. There is a legal framework and a history of precedent that says the federal government has a role in health care.
Last but not least, they have never turned up at the Council of the Federation as the fourteenth jurisdiction. They are the fifth biggest spender in direct health care costs, providing care to First Nations, the RCMP — until the budget bill passes — the Correctional Service of Canada, and DND. They outspend eight jurisdictions. However, as part of that national framework or standard, they have not attended in any capacity to discuss standards for the areas for which they are responsible.
Senator Eaton: We agree on most things except the federal government.
I have one last question. Why do you think the RCMP will be worse off being looked after by the provinces that hired them and not by the federal government? Why should they have a different health plan than the people they serve in each province?
Dr. Haggie: I think that depends on expectation. If you have a new force created from scratch where you deliver a set of expectations up front, that is up for negotiation. I think you have a large force that have a different expectation, and that will have to be managed retrospectively.
Senator Eaton: You mean they have expectations of better health care than the rest of the population and the province they work in?
Dr. Haggie: The problem at the moment is that the changes outlined are erased for the bottom. We are not actually improving anybody. We are taking them down from a nice, high standard — or a better standard — and we are expecting them to go down. This is a race to the bottom, not an improvement.
Senator Eaton: Down to the level of the rest of us?
Dr. Haggie: That is right. Why are we not working upwards?
Senator Eaton: I think I am well looked after by my physicians, thank you very much.
[Translation]
The Deputy Chair: Mr. Berthelot, you have provided us with a factual overview. What is your message to the committee today?
Mr. Berthelot: The Canadian Institute for Health Information's mandate is to present the facts. We do not comment on policies. We make no recommendations or suggestions. However, if you have any questions about the facts, it would be my pleasure to answer them because that is truly our mandate.
Our organization is independent and provides information on a situation's current state. Today, we talked about health expenditures, their evolution, the impact of the GDP on health expenditures and the impact of the aging population. The reason why we have emphasized those two phenomena is that Bill C-38 aims to change the way transfers to provinces will be made in terms of health expenditures. It is a matter of tying the transfers to GDP growth and establishing them on a per capita basis. That is why we have presented those two facts.
The Deputy Chair: The most straightforward fact in your presentation is on slide number six.
[English]
It says, "More Economic Growth, More Spending on Health.''
[Translation]
Do you agree that, the more you are able to stimulate economic growth, the easier it will be for you to ensure the continuity of high-level investment in health?
Mr. Berthelot: It is clear that a country's economic growth has to do with its capacity to invest in the priorities of its people. In Canada, health is a priority. Given the data presented, I completely agree, but I also think we have to take the overall context into account.
For instance, if we take the period from 2000 to 2004 and use the formula proposed in the budget, compared with the current data, there were increases of 6 per cent during that period. The new formula would result in an annual increase of 5.7 per cent.
For the period from 2004 to 2009 — a period of economic growth —, the data according to the budget, with the GDP-related formula, with a minimum of 3 per cent, would have yielded an average of 5.2 per cent, while the average of federal transfers would have increased by 6 per cent a year. Over the past two years, as we have been going through a period of recession and economic recovery, the minimum of 3 per cent would have applied.
I think there is a direct link between GDP growth and the capacity to invest into the public's priorities, including health. However, when we look at what had been proposed, we have to put it in context and consider from a historical point of view what the result would have been.
Senator Ringuette: Mr. Berthelot, this is the first time I see data that provide parliamentarians with information about health care system costs based on age groups. On page 9 of your presentation, costs broken down by age group are clearly shown.
I hail from New Brunswick. If I look at page 9 and compare the data with those on page 8, I see that, over the next 20 years, the eastern provinces will have serious problems with health care service costs in terms of the population age.
Could you give us data that would establish a relationship, if there is one, between people's income and their health status?
We are hearing, on both sides, that there is a direct link between someone's health status, longevity and income. So, do you have any data, any information you could give us?
Mr. Berthelot: Yes, absolutely. We publish statistics on health care expenditure factors by age group every year. That information is available in our annual report on health care trends in Canada. It is not a new phenomenon, and it is not something we do specifically for the committee; we have had a chronological series for a number of years. We have been noting the same trend, where babies and elderly people require more spending.
As for public health, that phenomenon is well-documented through Statistics Canada health surveys where the link is shown between peoples' health status and income level. That is very well documented. That type of information exists in Canada and all other industrialized countries. It is a well-known phenomenon.
As for your comment on challenges, yes, eastern provinces have more of a challenge when it comes to the aging population. They may have fewer challenges in terms of population growth. Yes, their challenges are different from those in Alberta or even Ontario.
[English]
Senator Ringuette: Dr. Haggie, you want to comment on that first question?
Dr. Haggie: If you are in the bottom 10 percentile of income in this country, your disease-free life expectancy at birth — that period of time you can expect to live before you develop chronic disease — is 52 years; the Canadian average is 68. If you are in the top 10 per cent of family revenue in this country, your average disease-free life expectancy at birth is 78 years. The difference is 52 from the bottom to 78 at the top.
[Translation]
Mr. Berthelot: This is not a new phenomenon. As Yvon Deschamps used to say, it is better to be rich and in good health than poor and unwell. Even comedians used that phrase in the 1970s.
[English]
Senator Ringuette: There are two issues from my perspective, from the data that you have provided us, from the different income-reducing measures in Bill C-38, either through the changes of the Employment Insurance program or the OAS/GIS, that will further reduce the income level of the poorest of the poor in this country. You take that and the fact that they live a shorter life and probably have a greater request in regard to health services. If their life is shorter it means that they are not healthy. I am looking at that fact. I am looking here at the data and saying, for sure as a New Brunswicker — and I will not use the word I really wanted to use — have any of your organizations made these presentations either to the Minister of Health or to the Deputy Minister of Health so that the future health transfer payments not be based on a per capita basis but be based on the real costs, depending on the demography of the province or territory? That is my question.
Mr. Berthelot: The Deputy Minister of Health at the federal level is very aware of the health expenditure reports. This is something on which we make sure a good briefing is done to Health Canada and those are very well-known facts. However, transfer payments are very generic issues. There are health specific transfer payments but there are also transfer payments. We are not expert in overall transfer payments; we are expert in health expenditures. We can tell you about what is happening in the health sector, but that must be looked at in a global context. Effectively it would be if you allocate the health transfer based on age specific distribution of the population you would get different results from doing it on a per capita basis. It is very easy to do so. We have done simple calculations and you would find that provinces that have booming economies and high immigration rates would have younger populations and would benefit from a per capita transfer. Provinces that have an older population would benefit from an age-adjusted transfer. It is for you to decide what is appropriate for the Canadian population. We can only tell you the facts, which are that they will be different. If you go from a per capita to an age-adjusted transfer, you would see that Alberta would be losing; the territories will be losing, because they have younger populations; Ontario will be slightly loosing because it is a bit younger than the national average; and everyone else will be gaining from the transfer payments. It is for you and the house to decide what the proper mechanism for transfer payment is. It is not for us to comment on that.
[Translation]
Senator Chaput: Thank you, Mr. Chair. My first question is for Mr. Berthelot. I think you mentioned, during your presentation, that you provide support for planning.
Mr. Berthelot: Yes.
Senator Chaput: Who uses your services and how do you support planning?
Mr. Berthelot: All health care managers use our services in various ways. As part of our mandate, we provide a lot of information to health care managers. I have a very specific example. There are various products we provide.
For instance, we provide information about hospital visits, hospital stays. We receive coded data from hospitals and we provide a monthly electronic report for each hospital in Canada. That enables them to see all of the people they treated, the length of the stay, the information based on historical data with regard to what the average length of the stay should have been, and compare their results with those of similar hospitals in the country.
That type of information is provided directly to health care managers. We have similar programs for all hospital financial information — costs of different departments, the emergency room, information on emergency wait times, and so on. There is a range of products intended specifically for health care managers.
For instance, we have a product that was made public in April — the Canadian report on the performance of 600 hospitals in the country. We created an interactive website where people can look up hospital performance based on several aspects — financial and clinical performance, and effectiveness of health care. We play a role in accountability by publishing data that may be used by the general population.
We have two roles. We have many electronic tools that are intended directly for managers, the Department of Health and regional health agencies.
Senator Chaput: If the federal government wanted to develop a national health plan, you would be able to provide information and support so that the plan would truly be based on reality.
Mr. Berthelot: Yes, we could provide information in a number of health care sectors.
[English]
Senator Chaput: Second round or may I ask another question?
[Translation]
The Deputy Chair: Could you wait for the second round?
Senator Chaput: Yes.
[English]
Senator Runciman: Dr. Haggie, when you were referencing the RCMP in your discussion with Senator Eaton, you talked about the provinces assuming responsibility for health care where the RCMP are resident. You described that as a race to the bottom. I found that to be a curious way to describe the health care that is provided to all other Canadians. Would you like to elaborate or perhaps explain that comment to a greater extent than you did?
Dr. Haggie: Yes. Thank you for the opportunity. The difficulty that you have is that there are multiple levels and standards of health care in this country. There are at least 14, plus some local variations.
The recently arrived immigrants program, for example, was an example of a comprehensive healthcare system. These people step off planes and boats with nothing but the clothes they stand in and are often in disadvantaged circumstances. Bear in mind that they are not able to take advantage of insurance schemes or savings to fund their healthcare. They have not had a comprehensive plan that included benefits, eyeglasses, dental care and things that you and I would actually have to pay for.
It seems perverse to take a group like that and actually take away from them things that one would hope — and that we have heard from Canadians that they would really like to see — would be in their own health care system, in a comparable way. I would suggest that the manoeuvres with the RCMP in terms of taking away some of their extras, which are within their package, would actually fall into that category, too. From a quality standards point of view, it seems that we are lowering those standards to match everyone else instead of trying to find a way to transform the system, on a principled basis, to raise everyone else's standard to that.
Senator Runciman: I do not think most Canadians would agree. In fact, polls reflect the satisfaction levels of Canadians with the health care system in this country. There may be discrepancies across the country, but I think that it is a standard of care that is tough to match in any other part of the world.
Some of your predecessors have taken positions with respect to changes to at least have some degree of reliance on user-based private financing in the health care system rather than the current tax-based funding, which has produced these very high rates of spending and the question of sustainability. In Ontario, the health care budget is now pretty much at or approaching 50 per cent of the operating budget. Some of your predecessors have been quite vocal. I sense that you do not share that perspective. I am wondering if you do have views related to that issue.
Dr. Haggie: In terms of your comment about standards, for an acute care system we are not bad. We do very well by national indicators. However, the bulk of disease now in Canada is chronic care, and the system has not changed to match that. One of the problems that we have at the moment is that, as my colleague pointed out, we spend $200 billion a year on health care. That puts us at number 5 out of 30 on the OECD rankings in terms of GDP percentage. If you look at what we get back from that, there are some good spots in terms of trauma care. If you get run over by a bus outside of here, you will get treatment that is second to none. If you have a chronic disease or if you look at system efficiency, we range anywhere from twenty-second to twenty-seventh out of thirty. We are twenty-second out of thirty in, for example, the number of physicians per capita compared to other OECD countries.
I think the message that Canadians gave us was twofold. One is that they recognize that the money that we have at the moment is not being well spent, so why throw more into the system? Why not use the money that has been there properly? The second thing is the very clear message they gave us that they wanted a publicly funded system, free at the point of access, with access based on need. The bigger debate that needs to occur is what is in and what is out. What is it reasonable for a publicly funded system to publicly fund? How do we deliver that efficiently and get good value for money? What is in is in, and what is out is up for grabs.
Senator Runciman: I think I have read this; I am not sure if it is accurate, but, originally, going back to Tommy Douglas' days, it was looked at as a system that would deal with catastrophic illness. It has grown like Topsy, with virtually everything being thrown into the mix, obviously for political reasons. You can talk very highly about the Canadian system, but we have seem prominent Canadians, including former Prime Minister Chrétien and the former premier of Newfoundland, go to the United States for care or surgery in certain situations rather than deal with the system. I think that there is a strong element of hypocrisy with respect to how these issues have been dealt with or not dealt with.
Mr. Berthelot, you said that you do not take policy positions, but I have an article here quoting John Wright, who was the CEO. Is he still the CEO?
Mr. Berthelot: He is still the CEO.
Senator Runciman: Is he from Ontario and the former head of the Urban Transit Development Corporation, UTDC?
Mr. Berthelot: Not at all. If you want to know his pedigree, he was born in Ontario, but he has been in Saskatchewan for 30, 40 years. Deputy Minister of Health in Saskatchewan was his last public post before coming to CIHI.
Senator Runciman: He is talking about the 1970s formula for funding and believes that the most logical basis for the new funding agreement, increasing transfers at the same rate that revenues increase, just makes sense. Would you care to expand on that?
Mr. Berthelot: It is too bad that he is on a plane. He was supposed to be here today, but, given the time, he is caught on a plane somewhere between the West and Ottawa. I think that is his personal comment. Also, as a former Deputy Minister of Finance in Saskatchewan, he was asked that specific question. I am not sure that that is the official CIHI position. It depends what you are looking for. If you are looking at controlling expenses in any area, it is normal that you link it with income. However, he did not make any comment about how it should be linked.
The Deputy Chair: Dr. Haggie, you talked a lot about the obligation, in your mind, that there should be a national program. If you were put in a position to set up a strategy from a macro level, do you have any ideas on how you would get the provinces and the federal government working together with a strategic group of doctors to create a national plan?
Dr. Haggie: In terms of process, you would look at some mutually agreed principles to start with. You would look at data. A lot of what we do when we measure is actually process. It is difficult sometimes to know whether some of those processes actually contribute significantly to outcomes or others contribute more. I think it behooves everyone, when you are in a cost constraint environment, to say, "Are we getting the value for money? These are ways that we could do it.'' Through organizations such as CIHI, Statistics Canada and perhaps a couple of others, that data could be generated to inform the discussion.
In terms of who you have at the table and how you actually do it, I think you would need to just go on a principled approach. There are roles for a seamless, team-based government approach, a whole-of-government approach. That would involve responsibilities from the feds, from the provinces and probably even from the larger municipalities. I think that they are left out of a lot of this. Along with them, you want to have representatives of the Canadian public and of health care providers.
Beyond that, as they say, I am agnostic as to how you would actually get there. I think making a declaration of intent that you would be prepared to start a process like that and actually starting the process itself would be the most significant changes that I could see.
Senator Buth: I have a point of clarification in terms of the RCMP changes in the budget bill. They will be getting provincial health care, as you have said, but that is where they were getting their health care all along. The federal government was being charged out-of-province fees for the RCMP, which of course ends up being a very expensive program. You have a person in a province already getting provincial health care and already, essentially, being counted in the population, so the provinces is receiving that per capita spending amount per patient. I just wanted to clarify that in terms of what may be perceived, as you commented, as the race to the bottom. Yes, there may be some changes there, but what they are receiving right now is essentially provincial health care.
I have a question for Mr. Berthelot. In your slide 7, there is a fairly large bar showing 2.8 per cent "Other.'' You may have mentioned it in your presentation, but I cannot recall. Can you run through what "Other'' is?
Mr. Berthelot: Yes. It indicates things that are very difficult to quantify. What is the impact of technology? There is a lot more technology used in the system now than in the past; and it is very difficult to measure. That is included there. It is called a macroeconomic analysis, so you can go into very fine details. There are more services provided now than in the past. For example, the number of hip and knee replacements in the country has doubled over the last 10 years. More services are being provided. There is also health care specific inflation. The 2.8 per cent at the bottom is the general inflation in the economy. However, after a period of compression of expenditure in the early 1990s, we have seen an investment in the health care system. We have seen a lot of investment in new physicians and new nurses after a significant reduction in the 1990s. That creates a labour market that was highly competitive, which in general economic terms would result in inflation specific to that sector.
That is what the "Other'' bar includes. It is very difficult to be able to break down each of the components. Studies in the U.S. have looked at technology. They say that maybe 20 per cent of some of the increases in expenditures may be related to technology; but they are not very solid studies. It is difficult to do.
Senator Buth: Would that also include higher labour costs for nurses and higher fees for doctors as well?
Mr. Berthelot: Yes.
Senator Ringuette: I would like to go back to my line of questioning about the cost of an aging population on the health care system, the income factor that should be correlated, and the fact that you, Dr. Haggie, are asking for leadership with regard to the health care crisis. I see all of that looming as these things come together, especially in Ontario and the East.
The fundamental law of the land, the Canadian Constitution, specifically says that transfer payments to provinces have to be designed to provide all Canadian citizens with the same standard of service. It is clear to see from slide 9 with the aging population and the additional cost to the health care system that that the constitutional transfer to provinces for health care does not meet what is required in order to provide equal standards of services, all things being equal as the economists would say. Dr. Haggie, where will we find the citizens or the provincial premiers to tackle the current federal government on the Constitution, the fundamental law of the land, to make the changes required so that the provinces and our senior population will have the basic standards of service across the land through the federal transfer system?
Dr. Haggie: I am not sure you are asking the right person. I am not a political analyst. I have no qualifications in politics at all.
When we spoke to Canadians in our dialogue with Dr. Jeff Turnbull a couple of years ago on the concept of equity, we clearly heard that there is a comparable standard from one side of the country to the other and into the North. It rang very clear with them. All we can do as a body is to make information available. We can inform and educate and try to advocate.
In terms of leadership from other directions, I leave that to the political experts. As I say, I am not qualified in that field.
Aging is an unpredictable quantity in terms of its health care costs and what effect those transfer payments or the changes in them will have. My home jurisdiction, as with New Brunswick and all the eastern side with the relatively older population, will lose money. I think that on a per capita basis, Newfoundland and Labrador will lose more per head than any other jurisdiction; and Alberta is the one that will gain the most because of its population. They will actually get an extra $850 million a year with the new transfer arrangements. Certainly, it looks as though Canadians should be aware of that; and how they choose to manage it, I will leave to wiser minds than mine.
[Translation]
Senator Chaput: My question is for Dr. Haggie. I agree with you, doctor, when you say that the federal government should have an action plan for health. I feel the federal government has the responsibility to ensure that Canadians have equal access and quality services across Canada. I also agree that a national plan would be a guide — with norms and standards — in co-operation with the province. The federal government actually does this in other sectors. There are federal plans, across the country, for other sectors or other specific issues.
Has your association discussed a national plan with the federal government in the past? Have you tried to discuss that with the federal government?
[English]
Dr. Haggie: We have sent all the documents that this committee has, and lots before that, to the Prime Minister's Office and to the office of the federal Minister of Health. It has been a challenge to get a meeting. We have invited the federal minister to general council on health equity and social determinants. It is being held in Yellowknife. The theme has come out of our transformation initiative and fits with the cycle of meetings that we would normally have. It is a real challenge in the North. We hope that she will be there; and we look forward to being able to present this kind of information to her. Thus far, it has been something of a challenge.
[Translation]
Senator Chaput: Would other groups or associations similar to yours, in the medical area, agree with a national plan and be prepared to work with the federal government?
[English]
Dr. Haggie: Within the physician community, each and all of the provincial and territorial medical associations have signed on to this. In terms of our principles document, we have 120 signatures. It is co-branded with the Canadian Nurses Association. Within those 120 organizations, we would count somewhere in the order of 20 patient-and illness-specific groups as well. It is not quite the usual suspects of health care providers only. There is quite a groundswell of interest out there to go this way.
Senator Runciman: Senator Ringuette asked when the province will deal with this. My sense is that any significant move in this direction has always been viewed as a poison pill from the political perspective. There has always been a reluctance to deal with this. Opposition parties, whoever they might be, always use scare tactics in election campaigns of secret agendas to do away with the Canada Health Act and the kinds of issues that have damaged many opportunities to deal with this in a productive way.
There is no question that there are real challenges; we all understand that. One of the things that we see in the system now is rationed health care.
I have a stat here for you. This is across all provinces. The average medium total wait between an appointment with a family doctor and the final receipt of specialist treatment has grown from 9.3 weeks in 1993 to 18.2 weeks in 2010.
Dr. Haggie, you have talked about a number of things that your organization would like to see occur. I do not think you specifically addressed, although you skirted it, more involvement of the private sector, or perhaps a deductible or some kind of a role for more effective gatekeepers, because consumers are insulated from the cost of medical services in this country. Do you not see any role there whatsoever for looking in that kind of a direction as well to try to meet some of these challenges?
Dr. Haggie: With the issue of user fees, for example, the CMA has no policy that supports it. We try to base our policy on sound evidence. The literature from the health policy world is very mixed about user fees. There is probably, on balance at the moment, an opinion that in actual fact they act as a barrier to care for those who do not have the money to pay for that specifically.
Wait times are an example of a mismatch between demand and supply. The number of hip replacements has doubled in the period my colleague alluded to. In actual fact, it is a success story for the Wait Times Alliance, which the Canadian Medical Association and several specialty organizations and jurisdictions actually put in place. It shows that if you actually pick something, target money towards it, have deliverables and deadlines and objectives, then it will work. I would suggest that is a microcosm, an argument for a structured national approach, because that is what happened with the Wait Times Alliance. The question is, do you leave it to a Wait Times Alliance for orthopaedics and then other piecemeal group, but there is no plan.
Senator Runciman: It is a question of affordability at the moment. It baffles me. With other insurance programs, such as car insurance, they look at your driving history, whether you have had a number of accidents and the number of charges. If it is life insurance, they look at your lifestyle, whether you are a smoker or a drinker and those kinds of issues. There is no kind of measurement in this. There is no kind of deductible. These have been talked about for years and nothing ever happens. I have seen my friends and acquaintances abusing the system. Any time they have an ingrown toenail, they go into the emergency ward. There are no effective gatekeepers in place, and there is no recognition of the cost to all of us as taxpayers, and no one seems to ever want to come to grips with those issues in a meaningful way.
Senator Ringuette: In regard to user fees, as a New Brunswicker, I remember the user fee imposed by then Premier Hatfield. It was total chaos. It cost more to administer the collection of the user fee than was collected, so that is a no-no. I agree that the people that most require the service did not have the money.
The Deputy Chair: Do you have a quick question, senator?
Senator Ringuette: It is not a question but a statement that user fees, from my perspective, are a waste of time.
The Deputy Chair: Thank you.
We are out of time, but we thank you very much for your ParticipACTION today. I wanted to make sure that we had a healthy comment in there.
Doctor, you made some strong points. One of them, of course, is that the predictability of federal funding through the legislation in Division 17 will give a pathway, which is a positive.
[Translation]
Mr. Berthelot, our economy and its success is fairly important for maintaining the amount of money that can be transferred.
[English]
Dr. Haggie, you talked about this national health care plan. By the questions raised by the senators, it is very interesting to view the sensitivity of the subject, but more importantly, the requirement on all sides for the type of leadership needed to move forward to create some form of a vision, which is obviously very important in terms of Canada and our future.
Thank you very much for your time.
(The committee adjourned.)