Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology

Issue 8 - Evidence


OTTAWA, Thursday, March 2, 2000

The Standing Senate Committee on Social Affairs, Science and Technology met this day at 11:00 a.m. to examine the state of the health care system in Canada.

Senator Michael Kirby (Chairman) in the Chair.

[English]

The Chairman: Honourable senators, welcome to the first session of a long study of Canada's health care system. I think it is fair to say that we are beginning what will be a long and complicated journey, one that all members of the committee embark on with a significant degree of optimism and ambition.

We will go both backward in time and forward in time, in the sense that we will want to understand what got the Canadian health care system to where it is, then talk about what effect of changes will be over the next few years, and therefore, ultimately, what the structure of the Canadian health care system should be. We will try to learn not only from Canadian witnesses, such as those who are with us this morning, but indeed from the experience of other countries that have looked at various other ways of structuring their health care systems, particularly a number of European countries in which there is very strong public health care component.

The committee decided to embark on this issue in large measure because, as recent headlines have certainly established, this is easily the most important issue on the minds of average Canadians. We will not, however, deal with the current short-term issue of how much money should be put into the system, and by whom. We believe that that is not the role of a longer-term study of the kind Senate committees normally undertake. We want to begin by looking at the system as a whole and, ultimately, at the end of this several year process, come away with clear recommendations respecting the direction in which Canada's health care system ought to move and what the federal role in that health care system ought to be.

In the course of getting there, we hope to provide a forum for the rational debate of public policy options surrounding health care. I emphasize the word "rational". The one thing that has struck me in the last three months since the committee announced it was going in this direction is the degree of emotionalism and dogmatic certainty that seems to surround every position that various groups put forward. I hope that, at the very least, this committee will become -- as other Senate committees have on other issues -- an excellent forum for the rational discussion and debate of legitimate policy options.

We will begin today with a panel of experts who will give us an overview of some of the major issues we will have to address over the coming months. Before doing that, I would like to turn for a moment to, Senator LeBreton, who is the deputy chairman of the committee. I think it is important for people not only in this room but those watching on CPAC to understand that, perhaps unlike many people's visions of parliamentary committees, this is not a partisan inquiry. In fact, while Senator LeBreton is a Progressive Conservative senator, she has worked closely with me on other issues and has also worked closely with all members of the committee. I would like her to make a few opening remarks, following which I shall introduce today's speakers.

Senator LeBreton: I have been in the Senate since 1993, and this is the first time I have been the deputy chair of a committee. I reiterate and underline what the chairman said. This subject is vitally important. There is no other issues that seizes the minds of Canadians like our health care system. It is regarded by all as a badge of honour. It is a special identity mark for Canadians, and Canadians are very proud of it, although they know that it is facing some very serious problems at the moment and will into the future.

I want to say here something that I have said publicly. This issue deserves clear, unbiased, rational debate, and I think the Senate is perfectly positioned to conduct such a study. We can look at this with an open mind and hear out everyone that has something to say. I do not bring any bias to the table, other than the fact that I am very proud of our health care system and want to make it better. I have always held the view that the Senate should engage in more studies like this, instead of the government spending huge sums on royal commissions, as has been done in the past. This is the way the Senate should work. I am very honoured and pleased to be on this committee and in this position.

The Chairman: I will now introduce this morning's panel. Senators, each of the panel members will take 10 or 12 minutes to give an opening statement. We will let all four panellists do so, and then we will have a general discussion, where we can ask them questions individually or collectively as a panel.

Our first panellist this morning is Professor Raisa Deber, Professor of Health Policy at the University of Toronto. She received her Ph.D. from MIT. She has written, consulted and been an expert witness on Canadian health care policy for a number of years.

We also have with us Dr. Robert McMurtry, the former Dean of Medicine at the University of Western Ontario. Dr. McMurtry came to Health Canada last October as the G.D.W. Cameron Visiting Chair at Health Policy. He is not here officially representing the Department of Health but rather on the basis of his experience in the health care system, particularly as former Dean of Medicine at Western.

We also have two spokespersons from the Health Action Lobby, HEAL. They are Dr. Mary Ellen Jeans, the Executive Director of the Canadian Nurses Association. She was formerly the Director of Nursing at McGill School of Nursing and Associate Dean of Nursing in the Faculty of Medicine. The second spokesperson is Sharon Sholzberg-Grey, who was before us in December on the issue of privacy of medical information. Ms Sholzberg-Grey is the President of the Canadian Healthcare Association, which is essentially the federation of provincial and territorial hospital and health organizations across the country.

We will have quite a wide range of views.

Professor Deber, please proceed.

Dr. Raisa B. Deber, Professor, Department of Health Administration, University of Toronto: Thank you for inviting me here. I always feel that I should add that I was born at the Toronto General Hospital.

First, because I am an academic, I must go over a few definitions. It seems that academics are incapable of not doing that. I will go briefly into the economic case for public financing of certain medically necessary care. We hear much about the ethical and equity case, but there is also a very strong economic case that is worth making.

I will say a little bit about spending; mainly that we are spending less than we think, far less of it from public sources than most other countries, and that the federal share of spending for health care is far higher than provincial rhetoric would lead one to believe.

I will acknowledge that some of the work I have done has been both for the Dialogue on Health Reform, which is not yet published, and for HEAL, on policy options.

There is much confusion about what we mean by privatization in health care, and that comes in part from the fact that we do not distinguish between whether we are talking about how we finance a health care system or how we deliver care. The third element, which I call allocation, is how to get money from the people who are paying for it to the people who are delivering it and what sort of incentive mechanisms you build in. I contend that the piece that is most broken in our system is allocation. We keep talking about financing, but what is broken is allocation.

With regard to public, there are multiple levels of public. There is the whole argument between levels of government: federal government, provincial government, regional government, municipal government. However, within private, private means many things. Private means corporate for-profit organizations that try to return a profit to shareholders. Private also means small business people, entrepreneurs. All physicians who are on fee-for-service can be seen as private providers of care. As well, there are not-for-profit charitable organizations. Part of the confusion is that in Canada we use the term "public hospital" to refer to private organizations. This becomes confusing because the argument against "public hospitals" gets into the rigidity of government employees. However, these are not government employees; they are people who work for hospitals on a not-for-profit basis. There is not a lot of inherent reason that they could not achieve the same sort of efficiencies that for-profit organizations can achieve and not have to find additional money to return to shareholders.

I have never seen a good case for the argument that for-profit organizations should be able to operate more cheaply. Most of the evidence suggests the opposite.

Finally, when we talk about private we are talking about individuals and their families. A great amount of care is given by individuals and their families outside of the formal health care system, as is an increasing portion of the payment.

You can put it together into models. I will point out that the Canadian model is what we call public financing for private delivery, or a public insurance model. It is not the same national health system model as they have in the U.K., where it is not only public financing but also public delivery. It is also not the same as the components of their private insurance, which is private financing and private delivery.

People say that Canada has socialized medicine, but it does not. It has a system of public financing for certain categories of health care services. Note that we have a very low share in terms of what we are financing publicly. The services are almost always delivered by private providers, but usually not-for-profit providers.

Therefore, that which Premier Klein is proposing is not really privatization; it is what some people call profitization. It is the proposal to use private for-profit providers instead of not private not-for-profit providers to provide publicly financed services, with a very unclear rationale because most of the evidence suggests that it is likely to be more costly than using not-for-profit providers and that there is some risk providers will use the opportunity to sell uninsured services "as required" in order to improve the bottom line.

However, I do not think that that is the threat to medicare. These things are manageable, if of questionable wisdom, within a publicly financed system. There are some other threats that are more worrisome.

When talking about medically necessary care, a single payer is economically more effective. To demonstrate that, I will give you four hypothetical examples. First, when I arrived at the airport this morning I wanted a taxi. If I had had no money, presumably no taxi driver would have been under an obligation to take me to where I wanted to go. Similarly, most people would happily take a free all-expenses-paid trip that must be taken within the next 12 months if their name were drawn by Air Canada in a lottery.

Turning to health care examples, though, if I presented at a hospital emergency room with a ruptured appendix and no money, very few people would say that I should be turned away. Economic theory says that I balance supply and demand with price. If I have too high a demand, I raise the price until I price people out of the market. If I do not price people out of the market, those price signals will not work, so any attempt to play around with market forces for services that I will not allow people who cannot afford them to be denied only means that I have the floor price of what will be paid publicly, but I have no ceiling price.

Therefore, one of the reasons American health care costs are out of control is precisely this attempt to mix public and private. I believe that Quebec is running into precisely the same problems with their pharmaceutical coverage. Most times when you try to mix public and private and believe that you can still use market forces but will be the payer of last resort and will not place people out of the market, you have far greater costs than you would have if you had single-source financing.

However, although you would take the free trip, if I offered you free open heart surgery at the hospital of your choice a long as you take it within the next 12 months, I suspect that you would not accept. Again, it is a rather peculiar market commodity. We will not let you buy it if you do not need it and we will not let you be denied if you do need it. For things that meet those criteria, trying to pretend that market forces will be more effective only means that people will be priced out of markets and that we will have worse access and higher costs. Many of those costs will end up on the backs of employers because they will have to pay for it out of benefits and payroll. Therefore, it also hurts the economic competitiveness of the country. I think the assumption that somehow experimenting with mixed financing for cases that fit that medical-necessary definition is problematic.

The other problem is that if you have a publicly funded tier, there is not a market for privately funded care unless the publicly funded care is either inadequate or perceived to be inadequate. By definition, therefore, unless you have a badly functioning public system, there is no market for your private system. That is also the fallacy with the assumption that somehow bringing in this private tier will relieve the pressure on the public tier. If it relieves the pressure on the public tier, then there is no more market for the private tier. Again, the international evidence is pretty solid on that.

As to my third point, because Dr. McMurtry will be going into it in more detail, I will go over it only very briefly. The assumption that Canadian health care spending is out of control is probably fallacious. It was a denominator effect rather than a numerator effect, because usually people look at spending as a proportion of GDP. Whenever you have a ratio, it has a numerator and a denominator. I have some numbers in my handout that show that, in the same year that Canada looked like we were in third place among 22 OECD countries in terms of our spending as a percentage of GDP, which is 1994, we were in fourteenth place if you measure it in terms of dollars per capita.

The other tricky piece of just looking at money is that it does not tell you what you buy for it. If I also looked at purchasing power parities and at the services provided, we were fairly cost-effective and were able to buy a lot of care for that money. If you look at it in PPPs, again we will look high because that same money could buy a lot more physician services and a lot more hospital services.

Therefore, it is important not just to think in terms of money but to think in terms of how much you are paying for what sorts of items. If you pay for three X-rays because you have lost the first two, no one has particularly benefited from that.

Basically, as GDP has improved, Canadian health spending looks more reasonable. I also have a diagram illustrating the famous notion that health care spending is out of control in Canada and that it will eat up all provincial governments. Actually, I have split it out into how much the provinces are spending, how much is coming from other public sources -- municipal, workers compensation, federal direct, and so on -- and how much is coming privately. This is all data from CIHI, the Canadian Institute for Health Information, which is the institute that collects the data and which most provinces and the federal government use as the best data. When I also tried to check these numbers with the Ministry of Finance in Ontario, they said they use the data from the Canadian Institute of Health Information. These numbers are thus fairly well accepted as being the accurate information.

When you look at those data, you will see that, if you adjust for inflation by putting them into 1992 dollars, and if you adjust for population growth by making it per capita -- the most recent date is 1997 because the other two years are still tentative numbers -- between 1989 and 1997, provincial spending per capita for health care has been dropping steadily. As opposed to chewing up more of spending, what the provinces have been spending for health care has not even kept pace with inflation and population growth, let alone allowing for the aging of the population or new technologies. If there is a question about why there appears to be a crisis, I think one of the reasons for a crisis is that Canadian spending has not even kept pace with population growth.

If you look across the 22 developed countries in OECD, Canada's share started off below the 22 country average. We were fourteenth in 1975. By 1993, we were eighteenth and by 1997 we were nineteenth in terms of our share of public spending. The only countries that spend less from public sources on their health care system than we do as a proportion of total spending are Australia, Portugal, and the United States. Again, the argument that Canada is somehow too heavily publicly financed does not seem to agree with the international data. In international terms, a far lower proportion of our spending is coming from public sources; However -- and here is one of the problems -- the spending on doctors and hospitals comes very heavily from the public purse, but the spending for other sectors does not.

What happens if provinces reform health care or move care to the community is that all of a sudden you can de-insure care. If I am in a hospital, my nursing care is covered and my medications are covered. If you can send me home after a day, suddenly you do not have to pay for my nursing, my medications and my rehabilitation. When the Canada Health Act was put together, it was never conceived that people could be recuperating from these sorts of things outside of a hospital. The act was set up on the assumptions that people with these conditions would be in hospitals. One of the things that we need to come to terms with is the fact that reform can be de-insurance, and in a number of provinces has been.

The final point that I want to make is that I think there are some barriers to an evidence-based debate. I was glad to hear Senator Kirby mention the privacy debate because, in Canada right now, data about health care is very hard to obtain, is very expensive, and privacy concerns have been a major barrier to the use of administrative data, except within particular research institutions that only have access to data within their province. If you are trying to do comparisons across the country, it is extraordinarily expensive and difficult. There is almost none of it happening, as opposed to the United States where it is very easy and cheap to get much of this data and so a lot of the analysis is done on American data sets. What that means is the debates are focusing on rhetoric and ideology rather than on facts, which I think is unfortunate.

That is the end of my formal presentation, but the one point that is important to make is that, speaking of rhetoric and misinformation, provincial governments have been having a wonderful time arguing how little the federal government is contributing to health care expenditures. They are playing several games with the data. The federal contribution is, at bare minimum, three times what has been argued by the provinces, and probably far more than that.

They are doing three things.First, in the numerator, they are including only the cash contributions, not the tax points, and yet, in the rhetoric, they are talking of a 50 per cent base line. The 50 per cent, as you all know, in 1977 changed to be the Established Programs Financing Act, which was half cash and half tax points. If you were going to take 50 per cent as a base line, I think tax points must be included.

Second, the denominator is looking at all health spending whereas all that was matched was doctors and hospitals. As you can also see from the CIHI data, about two thirds of present health spending by provincial governments is going for doctors and hospitals, so all that ever would have been matched is the doctors and hospitals piece.

Finally, it is a block transfer, which is also going for post-secondary education and for welfare, both of which have been cut rather extensively by provincial governments. Hence, if you are talking of netting out how much resources are available to provinces to pay for services, I think one must look at what resources provinces have and what they are being asked to spend them on rather than playing notional games with block transfers.

The Chairman: Thank you for that opening and non-controversial presentation. What a wonderful way to get the process started.

I would now ask our next witness, Dr. McMurtry, to proceed.

Dr. Robert McMurtry, G.D.W. Cameron Visiting Chair, Health Canada: Honourable senators, I appreciate the opportunity to appear before you and offer you my congratulations on what would appear to me to be an extraordinarily important process. To be part of it is indeed a privilege.

I have enjoyed listening to my colleague. I can only say that I agree with everything she said and will not venture very much further into the economic area. I will touch on it. The notion that she emphasized, which is that the hypothesis that health care costs are out of control was a myth, needs to be reiterated.

The Chairman: Was or is a myth?

Dr. McMurtry: Was and is. During the 1990s, we went from expending 10 per cent of our GDP on health care to 8.9 per cent, as per the most recent year for which statistics are available. Estimates and forecasts for 1998 and 1999 would have us rising to 9.1 per cent or thereabouts, well below where we have been. I will characterize that in more detail now or a little later.

The Chairman: That is fine. Carry on.

Dr. McMurtry: In the reference letter of February 16, I was asked to answer the following question: Where do experts agree about the Canadian health care system? The answer is that we have an historical agreement that we have problems. It is fair to say that politicians, professionals and the public all agree on that. I will give more statistics in that regard in a moment.

Where they disagree very profoundly is on the nature of the change required. You heard some of that characterized very eloquently moments ago. Why is there such a disagreement? It has to do with perspectives, upon which I will place a great deal of focus, as well as operating assumptions and ideologies that drive us. Those assumptions and ideologies say that there is a problem, and that somehow provides evidence that we need to go one particular route, for which there is poor evidence that it would be effective.

You asked further: Are the experts asking the right questions? In part, yes; and in part, no. The biggest issue before us has been identified as one of sustainability. I think that that is a legitimate question to ask because the public system is under threat no matter how you characterize it.

People are agreed that Hall's five principles are "evergreen". I cite in particular accessibility, comprehensiveness, universality, portability and public administration. They are as significant as they have ever been and merit our support. To those we will add other principles such as accountability and those related to efficiency and effectiveness. However, the fundamental founding principles of the Medical Services Act of 1966 as originally pronounced are still real. What is missing, however, is a unifying vision of the future. That is something that I feel is imperative if we are to move forward with any effect.

I will now quote a few figures to give a characterization to my qualitative statements. They are as follows. According to an October 1999 survey, only 22 per cent of Canadians feel that the federal government is doing a good job. In December of 1999, some 72 per cent of Canadians said they believe that the health care system has deteriorated, which is up 15 per cent from 1998. I can provide all the sources of this information if you wish.

In spite of that deterioration and concern, in July 1999, 84 per cent of Canadians said they support universal medical care, up 5 per cent from 1996. In terms of privatization, 72 per cent said in August of 1999 that universal publicly funded health care reflects our core values and that a shift to a two-tier system would make us a poorer society.

In March of 1999, 86 per cent of Canadians said they believe the health care system is becoming more two-tiered. Some 78 per cent claimed in August of 1999 that only the wealthy Canadians would benefit from a two-tier system. Finally, a substantial majority, that is, 75 per cent, said that the federal government should spend more on health care.

I will move now to a few characterizations of the health care expenditure patterns. From 1975 to 1990, when it was said that we were out of control on expenditures, it is worth noting that the average increase overall in the public sector was 2.5 per cent. That was without correction for population but with a correction for constant dollars. The out-of-control characterization does not hold. Within that public expenditure, the largest increase occurred with pharmaceuticals, which is of course from the private sector.

In the 1990s, the average annual change in the public sector was minus 0.6 per cent. That is from 1990 to 1997, inclusive. That would lend weight to the notion that the out-of-control hypothesis was not substantiated, for the reasons stated by the previous witness. Indeed, we have gone in the opposite direction. As we have faced the crisis, hospitals in particular have gone from 55 per cent of the share of the budget down to 33 per cent. That is a dramatic decline. It is not surprising that there is a squeeze being felt there.

I will now speak a bit about a qualitative representation of the system and less about economics and quantitative information. My perspective is that I graduated from medical school not long after the age of the dinosaurs in 1965. I was a medical student before there was medicare. I can recall there being in Toronto private patients' pavilions and public wards. I can recall the transformation for the better that occurred with the public system. I also spent two years as a missionary in Africa and working for the Canadian International Development Agency, which I must say changed my perspective on health care on a permanent basis. I was an orthopaedic surgeon and was responsible for running a trauma unit in Sunnybrook, which I established as its founding director. I have had experience as an administrator, as chief of surgery and as chair of surgery in Calgary. As I mentioned, I was also dean. Most recently, I have had the opportunity of working with Health Canada in the policy field.

What really strikes me as I have moved from these fields is that we suffer from a lack of integration. That is not a surprise. I would characterize it, and I have it in my slides, as three distinct solitudes. Our future success will be measured in our ability to bring integration among those solitudes.

The first solitude is the biomedical or medical model, which is characterized by the focus on disease intervention and which, in the future, holds promise for genetic diagnosis and treatment. It includes life support programs, such as cancer, cardiac, critical care, emergency services, trauma and transplant. Those programs should and always must be protected. They are so insufficiently now. The questions that that world asks are these: How do we make people healthier? How can we treat disease? Those are important questions, but surely not the only ones.

The second solitude is that of the world of public health, which protects our air, water and food and which includes vaccination and disease surveillance at a minimum. The questions those in public health purportedly ask are the following: How do we protect the health status of our population? How do we prevent disease?

Each of those solitudes has enormous value, but there is a lack of coordination among them.

There is a third field: social medicine. It is that field that looks at population health elements, at issues such as social cohesion and distributive justice and the role they play in health and well-being, and rightly emphasizes their importance. The focus of their work is on that of health inequalities. They endeavour to answer this question: Why are some people healthy while others are not?

All of those perspectives have enormous value. Our success will depend upon us being able to integrate them.

I will turn now to some characterizations on an individual level and then on a system-wide level that would capture the situation as it is and the situation as one would propose it, if we were to achieve improvement in integration.

The health care system, in particular medicare, which is focused on hospitals and physicians, tends to be disease-centred in its focus. We think of a person as having a disease or a derangement that is measurably different from normal. There is thinking in terms of diagnostic-treatment coupling, which was formalized to a remarkable degree in the state of Oregon. An example of that is if you have appendicitis, you need an appendectomy. It is characterised by episodic care, and it is not contextualized. In some senses, this is the view of the traditional medical model. It is not a model that, in isolation, is sustainable. These efforts will always be important, but done in isolation they will not result in a sustainable system.

Looking at it on a system-wide basis, I presented you with a slide that shows simply that the focus has been on the acute care hospitals. As noted, they are downsizing dramatically in terms of their funding support. The prevention/promotion piece is separate. It will attract, perhaps, 2 per cent or 2.5 per cent of the budget, according to the Canadian Public Health Association. We are divided into sectors that tend to be focused around the hospital, with primary care and ambulatory care being a pre-hospital function, with post-care tending to focus on other organizations and institutions that deliver rehabilitation, convalescent and long-term care. It is not an integrated system.

If I were to take an individual perspective and try to put together the visions of these disparate fields, I would cite you, in particular, the approach called "person-centred" or "patient-centred" care. It has been shown to be effective and less costly and to result in more satisfaction, fewer tests, fewer referrals and lower costs. I cite in particular the work of the Centre for Studies in Family Medicine at the University of Western Ontario, led by Dr. Moira Stewart.

Whenever one sees a person in a care situation -- I am focusing here on primary care in particular -- it is imperative for there to be consideration of the environment from which that person comes: the social, economic, and physical environmental forces that work on and affect that person's life. In addition, as one engages with the person, it is important to distinguish between the disease and illness. The disease is the measurable derangement. The illness is the person's experience or the meaning of that derangement to them within the context of their lives. That engagement is crucial.

The characteristics that require success -- and all have been shown to be independent variables that make a difference to outcome -- are those of caring effectively, communication and finding common ground. When effective caring occurs, even without there being a health professional involved, it can result in improved care, which has been shown in a study based on Wellesley Hospital street people. Communication has been shown to be extraordinarily effective for success. The third element, which is less well known, is the extraordinary importance of finding common ground.

Let me give you a portrait of an encounter, an indication of the way we should be thinking in the future, wherein one can start to integrate the views and perspectives of the disparate fields that I have identified. It is necessary that people be seen longitudinally, not episodically, that their full environment be taken into consideration: the physical, the economic, the social. Their cultural perspectives must be part and parcel of the consideration. Care must occur, communication must occur, and the caregiver must understand their own environment, world view and values. The most crucial outcome of all is to find common ground.

In finding that common ground, it is necessary to access the best available information. We have heard much about the Internet and that possibility. It includes, however, such diagnostic tests as may be appropriate to the individual, as well as information bases that are generic as opposed to specific. The extraordinary thing is that people finding common ground with their caregiver has been found to be as important or more importance than having the correct diagnosis.

I am not recommending that we embrace wrong diagnoses. It serves to emphasize the extraordinary importance of successful communication and agreement. I wish to emphasize again that it is less expensive and results in fewer diagnostic tests, fewer second opinions, higher satisfaction rates and higher adherence to treatment. This social medicine view is a model that takes into consideration the extraordinary importance of the things that affect health. It also creates a model wherein preventative practices can be centred.

If we were to look at this from a system-wide perspective, we ought to think of those three segments -- prevention/promotion, pre-hospital and post-hospital -- not as separate but rather as unified elements. Where do we want to be in 10 years? We want to have a continuing health care system that links with the ever-essential hospital, but with the hospital in its proper place and time and role. The hospital will continue to be necessary with its acute care, high acuity and complexity, and life-support programs.

All of us here, if we had our dreams -- and I have managed it so far -- would not ever want to be admitted to hospital. That would be a good life. I come from that sector and I have devoted my life to that. If I succeeded, would that not be wonderful? I certainly would not take up your award of the free bypass. I do not think any of us would. That is a very important point.

The continuing health care system should bring together the primary care, the prevention/promotion, and home care. It should bring multi-disciplinary teams. It should be looking at alternative funding, and it should be looking at issues such as workplace health. I have mentioned the year 2020. I ask you to consider the extraordinary fact that we are now experiencing 66 million days of workforce absence in Canada annually, and some 60 per cent of those absences are related to stress. That is absolutely extraordinary.

We have a changing workplace. Only 54 per cent of people are in standard work. What are we doing about that? As a practising physician, I know that my ability to help patients in the absence of an alteration of the workplace is very constrained. In the package attached to my written text you will see the graphs as they relate to workplace absence. I am quoting the work of the Institute of Work and Health and the Canadian Policy Research Network, headed by Judith Maxwell, who have come together to do that analysis.

Clearly, we must be thinking of those sorts of issues when we talk about the health care system in the future. If dreams were to come true in 2020, our vision would broaden. We ought to be thinking about such issues as being a part of, or at least linked to, how the system is paid for. That merits discussion. Encouraging networking, integrating daycare, and going as far as fitness, culture, arts and theatre are also ideas that merit discussion.

I have become very aware, since I have been in Health Canada, of the devastating circumstances and challenges that confront our First Nations people. The issue that surrounds them and confronts them and that has undermined their health is assimilation. It is the issue of the loss of their cultural identity, their language, their spirituality, as being respected in the context of our larger society.

The last thing I will mention is literacy. An astonishing 80 per cent of people who are 65 years and older have the lowest two levels of literacy on the international adult literacy survey. More than half of them will have trouble understanding their prescriptions. That has profound health impacts. What are we doing about that? How can we contemplate a system in the future, or indeed the present, where we are not addressing that issue in some fashion?

In summary, I wish to say that I applaud this initiative and that our success will be measured. If we are to create all the conditions of their well-being, we must bring together the worlds of biomedicine, public health and social medicine.

Dr. Mary Ellen Jeans, Co-Chair, Health Action Lobby (HEAL): Honourable senators, we are pleased to be here on behalf of the Health Action Lobby, or HEAL. We are actually thinking of changing our name to HELP, but we have not come up with the correct words yet.

This morning we will provide a brief overview of the Health Action Lobby, as our work has been and continues to be an important example of collaboration and consensus on health care. We will then share with you our concerns about health care today, and how we feel this study can contribute to improving our publicly funded health care system across the country.

Ms Sharon Sholzberg-Gray, Co-Chair, Health Action Lobby (HEAL): Honourable senators, HEAL is a coalition of more than 30 national health and consumer organizations. When we came to our name and realized we wanted to be called HEAL, we were a bit concerned about the last word, "lobby", because one knows how lobbyists are viewed in this country and other countries. Nonetheless, we thought that it was quite honourable to lobby on behalf of a publicly funded health care system in this country.

We came together following the 1991 federal budget that resulted in severe cuts to transfer payments for health and post-secondary education, then funded through Established Program Financing or EPF. Our concern about the impact of those cuts, which we believed would effectively eliminate the federal government's ability to enforce the principles of the Canada Health Act, overcame the barriers of working together. Remember, we came from very different organizations with very different perspectives and we had not always in the past been exactly on the same wavelength.

From seven founding members, the Canadian Health Care Association, the Canadian Nurses Association, the Canadian Medical Association, the Canadian Public Health Association, the Canadian Psychological Association, the Canadian Association for Community Care, and the Consumers Association of Canada, HEAL has grown to be more than 30 members, and we continue to grow. In fact, two of the founding members have even changed their names in the interim. The Canadian Hospital Association became the Canadian Health Care Association, to reflect the changes that are occurring in our health care system and the changing membership of that organization, and the Canadian Association for Community Care was formerly the Canadian Long-term Care Association. It is interesting that members had to change their names as the health system was undergoing reform as well.

HEAL has grown to be composed of more than 30 members and we continue to grow. Our goal was to develop a common set of policy principles underlying health and health care and to increase awareness and support for a shared vision for health and health care.

HEAL was to be a time-limited coalition. We thought that the problems of the health care system would be resolved within a year or two or three and there would no longer be any need for that coalition. We never expected to be working together nine years later.

Based on a set of guiding principles that have stood the test of time, we have undertaken a variety of policy, advocacy and information strategies. Our approach has always been to work collaboratively with and not against policy-makers and people in government, though I think people in government might sometimes think we are somewhat critical even though we always say things in a positive way.

Our work has been informed by experts, including Ms Deber, who is with us today and who has prepared excellent papers for HEAL in the past.

HEAL has developed policy and discussion papers around such topics as health and the Constitution, the comprehensiveness of health services, funding mechanisms, the public-private mix, and the federal role in health. We continue to play an active role in the yearly pre-budget consultation process and we meet as a group with both Minister Rock and Minister Martin and with federal officials on a regular basis.

As federations, our member organizations also lobby at the provincial and territorial levels. Working together has enhanced both our credibility and our strength.

Ms Jeans: A benefit of working as a coalition has been the tremendous sharing of knowledge and understanding of the health care system. We believe that the opinions we share with you today come from a perspective informed not only by our own experiences but by those of the many other groups who are part of the coalition.

You asked us about what experts in health care agree upon. There are several points we would like to make in response. First, there is general agreement from health care providers and the public that a publicly funded health care system remains not only a true reflection of our values as a country but also the most efficient and cost-effective way to provide health care for all Canadians. There is considerable evidence, as raised by Ms Deber and in the many reports that have been published over the past few years, to support that response. As noted by Minister Martin in his budget statement earlier this week, health care remains the first priority of Canadians. As our population ages, concerns about timely access to quality care grow. We believe unequivocally that further privatization leading to two-tier health care is not the answer to today's problems.

Second, there is agreement that health care is a shared responsibility between federal, provincial, territorial and local levels of government. We all agree that the current health care system is under tremendous pressure. The continuous funding cuts at all levels have resulted in the health care system you are reading about in the media. Services have been cut, there are waiting lines for surgery, emergency rooms are overcrowded, and there is a patchwork of services in the community such as home care, community care, long-term care, rehabilitative care and mental health services.

We are experiencing shortages of all health care professional groups, including nurses, physicians, technologists and others. These shortages are due to aging workforces, cut backs, brain drain, and fewer young people entering the health professions in part due to the very difficult working conditions.

Ms Sholzberg-Gray: There is a great deal of consensus on the state of the health care system and there is also consensus on what must be done to correct the problems. It is important to note that the innovative and integrated health care system that we have been speaking about encompasses a broader range of services than hospitals and doctors and medicare as defined in the Canada Health Act.

I should like to talk about funding, even though I know that funding, especially funding issues that are current, are not really the purview of this committee. I also know that funding is only one aspect, but funding amounts and transfer mechanisms are key priorities for the HEAL group. Our specific recommendations are outlined in our pre-budget brief, which we have left with the committee. We have consistently believed that there is a need for a sustainable long-term plan for health care funding that reflects the changing needs of Canadians. We think that the one-shot approach that was provided for in the recently announced federal budget will do little more than cover the current deficits of hospitals and regional health authorities.

If we might make a comment or two about that budget, we would just like to say that, first of all, $2.5 billion over four years is not sufficient to meet even current needs within the health care system. We need long-term predictable funding. As Ms Deber mentioned earlier, in real, constant dollars, looking at per capita, public spending on health care by the federal government and most provinces has declined significantly in recent years; it has not increased as the myth that is out there suggests.

While the federal government has increased the Canada Health and Social Transfer cash floor -- remember not just for health, but for social services and post-secondary education -- the level of funding is not enough.

We at HEAL give full credit to the federal government for the tax point part of the transfer. We do not like the murkiness of people saying that is not real money, because it is real money. Of course, we said that that money cannot be used to assert the conditions of the Canada Health Act, which is true, but nonetheless it is real money.

What we are saying then is that the total transfer -- cash and tax points together -- is still less in real per capita terms than seven years ago when this government came to office, and that is the issue. Is there enough federal funding right now, both parts being considered, to meet the needs of the Canadian population?

How will the health care system meet the needs of a growing and aging population and absorb labour negotiation settlements -- and we have said that all people who provide care must be respected in terms of their working conditions and remuneration, particularly nurses, and I am conscious that Dr. Jeans is head of the Canadian Nurses Association. How can we maintain capital expenditures and operate equipment? How can we incorporate advances in health care technologies? How can we change the system without sufficient funding to do so?

A sustainable health care system needs sustainable funding through an appropriate federal transfer mechanism. HEAL members are currently engaged in studying and examining potential new funding mechanisms and, frankly, we do not necessarily think that the Canada Health and Social Transfer, CHST, is the proper mechanism for the future to fund our health care system. That is something we think needs to be re-examined.

An adequately funded health care system not only contributes to maintaining and improving the health of Canadians, but our publicly funded system also contributes to Canadian productivity. Many Canadian employers are strong supporters of our publicly funded system as a competitive business advantage. Perhaps you should call on Charles Baillie, the CEO of the Toronto-Dominion Bank, because he has been quite outspoken about the importance of our publicly funded health care system as a competitive advantage.

Health care organizations cannot plan for the future, develop innovative programs to meet changing needs, or create full-time positions for needed health care providers when current and future funding is inadequate and uncertain. All of these developments are testing the confidence of Canadians in their much-valued publicly funded health care system.

There is also agreement across the country that true health care reform is needed. Nearly every province and territory conducted major reviews of health care in the 1980s. All pointed to a health care system based on the principles of primary health care and more community-based care, with the client at the centre. These studies also highlighted the need for evidence-based decision making and more research to create the evidence supporting treatment and care decisions. A need to manage our health information in better ways was identified.

Study after study has also shown that there needs to be an integrated health human resources plan to ensure that we have the right provider in the right place at the right time. Greater access to and coverage of services such as home care, community care, long-term care, rehabilitative care and mental health services are also needed, remembering also that many Canadians remain without adequate insurance coverage for necessary pharmaceuticals.

Before the recommendations of these many studies could be implemented, we entered a period of recession and cost cutting. Many of the reforms that we witnessed during the 1990s were driven more by cost cutting than by true reform. We now enter a period of greater prosperity, and we know what needs to be done. We know those needs from the reports -- not only the provincial reports that I have mentioned but also the report of the National Forum on Health and other important reports that have confirmed Canadian values and views about the health care services that will be required in the future.

The health care system has borne part of the pain of turning the corner on the recession and the debt. It is time now for a renewed commitment and strong leadership in health. We look forward to the spring meeting of the ministers of health or the premiers -- we are not sure who will be meeting -- and the federal government. Discussions regarding the future of our health care system will need to take place in the context of the new Social Union Framework Agreement. One must keep in mind that the Social Union Framework Agreement has a three-year duration, and over one year has already passed. One must also recognize that many provinces are already trying to provide home, community and long-term care services within their publicly funded system and are our venturing into primary health carry from within the realities of severely restricted health care funds.

As you begin this very ambitious study, many witnesses will undoubtedly tell you that the time for more study is over. There are already countless reports and recommendations about health care: action is needed. We agree that decisive steps must be taken now in order to restore Canadians' confidence in the health care system. However, we also feel that for too long, health care has been a political football. It is time for all levels of government to work together towards an integrated, seamless, publicly funded system of health care for Canadians. We believe that this committee could facilitate that collaboration.

We recommend that you consider shortening the time frame of your study in order to accomplish your work in a timely manner. To do so, you could begin by confirming the key issues, many of which we have mentioned this morning: funding, scope of our publicly funded heath care system, health human resources, health research, and the important points brought forward by Dr. McMurtry and Dr. Deber. That can be accomplished based on existing literature, such as the reports of the National Forum on Health and other reports, and on discussions like the ones we are having today. From that, an overview of these key issues could be developed. We would recommend that witnesses to your committee be asked to discuss the specific issues in terms of reviewing the identified challenges and, more important, to suggest short-term and long-term solutions for addressing those issues.

Finally, the committee could release separate reports over time outlining proposed actions to deal with specific issues, including a description of the roles for all levels of governments, providers, health care organizations, researchers and the public. The reports should be as specific as possible in terms of outlining an action plan with costs and time frames. Your study will provide information, direction, and informed discussion on a subject that will always engender strong emotions and much debate. We encourage you to seek a wide number of opinions and to focus on developing a clearly articulated strategy for the future.

The Health Action Lobby looks forward to being part of the study, at this early phase and as you proceed to discuss options. We welcome your questions.

The Chairman: I thank all the witnesses for a very interesting cross-section of issues. I should first like to ask the witnesses collectively one question. It strikes me that, at one level, you sound like you are in agreement. At another level, you sound like you are miles apart. I am interested in where on that spectrum you are. The representatives from HEAL argue very much about the funding question, not just short-term but long-term. Professor Deber made the argument that there is a funding problem based on population growth and inflation not having been met. You also argued that it was as much an allocation problem as a funding problem. Dr. McMurtry argued that what we really need to do is look again at the entire system so that we are not simply looking at funding questions and per capita growth questions and that kind of thing, but in fact are looking at the overall health of individual Canadians in a much broader societal context.

Those three positions are in quite different directions. I am simplifying this characterization in part to be provocative and in part to clarify the positions. The HEAL position is yes, we need to make some change, but by and large the fundamental problem is money. Professor Deber said yes, we have a money problem, but there are other problems as well. Dr. McMurtry said he agreed with that, but on the other hand, he backed the telescope up even further and looked at a much broader picture. Is that an unfair characterization of where people are? If it is, I would be happy if you told me why.

Ms Deber: I think that we are basically in agreement more or less, just arguing about details. The determinants of health are obviously extraordinarily important. There is a certain question about medical imperialism and to what extent you want to take very important determinants of health and call them part of health care. Housing is obviously a critical determinant of health. I would not be comfortable trying to call housing policy part of health policy. I think we are in agreement about what is important, and I have some question about where I will draw the line and say what has to be publicly funded in a universal system under Canada Health Act principles. Many things are extraordinarily important that I would not put in under those principles.

The province I know best is Ontario. First, no one knows know how much the Province of Ontario is spending because Ontario has gone to accrual accounting. If you announce that you are going to spend things, you can book them without necessarily flowing the money. There has also been a lot of reclassification; things that were in certain pots are now in other pots. It is very difficult to know what has actually been spent. Ontario does things like spend $400 million to fire nurses and then spends another $400 million to hire them back. I am not entirely convinced that that is a reasonable allocation of public money. Ontario "saves" a little money by cancelling training programs for radiation technologists and then suddenly discovers that the machines cannot be operated without people, who then have to be sent to the U.S. for training.

The key problem is that money needs to be predictable. You have to be able to work with it long-term. Ontario claims to be putting money into hospital emergency rooms, but the money is for three months or four months. You cannot hire a nurse for three or four months. There is the assumption that all health personnel will sit around waiting for the phone call and then be glad to run in and work for that time. You cannot run any business without regular personnel in a sustainable way.

It is allocation because we have funding formulas that are perverse. We have caps on position incomes and billings, but we do not link those to appropriateness. Consequently, we end up with a tragedy of the common situation, which is "If I churn out lots and lots of visits, then I will get more money than someone who practices responsibly." We put in perverse incentives and then we hope that people will be responsible enough to ignore the incentives in the system. In large part, it is an allocation problem because a great deal of money is wasted in short-term fixes and peaks and valleys. If people knew how much money they had to rely on, they would manage better.

Ms Jeans: I do not think we are all that far apart. HEAL believes that funding has been cut, both provincially and federally. It believes that there have been some serious negative consequences of that. However, we are not advocating maintaining the system the way it was. We firmly believe that health care reform has not happened yet. All that has happened has been cutting.

I agree that there is probably a lot of waste. We believe that what should be included under medicare should be the broad continuum of care from health promotion and disease prevention through to acute care to rehabilitation, home care and community care. We believe that there should be a fundamental reform of primary health care. Dr. McMurtry and I may differ on what the terms "primary care" and "primary health care" mean.

The Chairman: You seem to agree in the sense that you would broaden the scope of coverage quite significantly from just doctors and hospitals.

Ms Jeans: Absolutely. The last point is related to what Dr. Deber said. In the budget this week, $23.5 billion was invested in the CHST. Can you imagine trying to run an $80-billion industry with a year-by-year uncertainty of the funding? You cannot run a responsible system if you do not have the ability for long-term planning. That is what we do not have.

Ms Sholzberg-Gray: The original principles on which HEAL came together in 1991 are actually contained in that page: for example, the need to have a broader continuum of care in the publicly funded system. There is a recognition that the determinants of health are very important, but as a health care lobby we were not going to argue for funding, although we have discussed the merits of tax cuts versus increased spending and health care. We mentioned the fact that if one must pay more for health care, some of the tax cuts might not prove to be so important to Canadians. We certainly looked at this and we recognized that reducing income disparities is an important health issue as well, because income level is an important determinant of health.

We have discussed the very same issues across this table. HEAL also says that we need sustained, long-term predictable funding in order to both plan and then to implement those plans. In a number of provinces -- and perhaps we should not use Ontario here as an example -- those approaches are more developed. In fact, some of the provinces are saying, "We are making this kind of progress but we do not have enough funding to continue to implement it." There are various differences across the country. Perhaps that is one thing the committee should look at. We have quite a patchwork quilt and we have insurance and different things covered in different provinces. We might have to say that, somehow, the federal government must ensure that Canadians have access to comparable services wherever they live. That means looking at things beyond hospitals and doctors. We are on the same wavelength on both the funding and what the funding should be used for.

Dr. McMurtry: I, too, feel that we are pretty much on the same page. However, funding should stop being formulated on a resource base and be redirected so that it is needs-based or population-based.

First, issues such as who does what then become unimportant. The issue is not whether a doctor, nurse, social worker or other health professional delivers something; it is far more important that it get done. That is one principle.

Second, we must get upstream of the "after-the-fact" interventions. We must all agree with that or we will not be where we need to be. That was the importance of talking about determinants of health.

The Chairman: By "after the fact", do you mean once someone is already sick?

Dr. McMurtry: By and large, the health care system focuses on restoration. There are issues of protection, prevention and promotion. That would be getting upstream, and that is what we must do.

Third, my colleagues have said, "Look beyond the health care system of the doctors and hospitals." Absolutely; but do not forget it. There will always be a need for the life support programs as they relate to cancer, cardiac care, critical care, emergency, trauma and transplant. The dream is that we can, somehow, bring that down if we do get upstream.

Senator LeBreton: Thank you very much. That is a lot of information to try to digest.

As I listened to your presentation, I was looking at it with a view to the public watching. There seems to be a tremendous amount of confusion in the public about public versus private. I was listening to Dr. Deber talk about public delivery. How would you suggest this to the public in simple layman's terms so that they can understand? I do not think they do. I think it becomes a political football. We are watching it happen right now. When we talk about private health care, I am sure people are thinking that it means a private enterprise, setting up a hospital or hiring their own doctor. How do we educate the public as to what actually is the private versus the public system in order to get the debate onto another level?

Dr. McMurtry: I do not know that the approach should be the explanation of economics and financing. I think the public will focus on the crucial issues of universality -- that is, there is no exclusion -- and accessibility. That is what they care about. If we deliver on that, I think there will be peace in the realm. Universality and accessibility are crucial. Comprehensiveness is something that needs discussion. That is to say, what will we cover?

I am prioritizing the issues. Accessibility and universality are the most important issues. Comprehensiveness is next. It certainly is not helpful if you find that you have different coverage in different provinces. It can be devastating for people who might be confronted with a health challenge.

Senator LeBreton: Yes, or the difference between a rural area and an urban area within a province.

Dr. McMurtry: That are the basis on which we should proceed as opposed to trying to explain the nuances of financing formally.

Ms Sholzberg-Gray: There is one other issue, without going into the details of the economics. I think the public knows that they are paying for some health services. There is not a family with an elderly member needing home care or long-term facility-based care who does not know they pay a lot of money, and a lot more in some provinces than in others. For instance, co-payments in long-term care facilities are reaching several thousand dollars a month in the maritime provinces measured against assets and means. In our system, we do not think of means testing and asset testing for health care, but that is the case in certain parts of our continuum.

In some cases, Canadians must pay 100 per cent of their care. They realized that when they must pay 100 per cent of their physiotherapy, even if that rehabilitation is needed as a result of surgery, simply because there is no longer any or at least not a sufficient amount of physiotherapy provided in hospitals. They know they are paying for that treatment. They know that means they are paying privately. If there is medicare in this country, they sometimes wonder, "What am I paying?" That is because they do not know the limitations of our medicare system. They do not know that it ends or starts at the hospital door and they do not know that it ends at the physician's office. However, prescribed tests can be paid for. They do not really know what is covered and what is not.

I do not think I have met very many Canadians who are buying private insurance themselves. They get complimentary insurance supplied by their employers and they know it covers a lot of things like eye glasses or hearing aids or that kind of thing, but I think there is genuine confusion among the public as to what is covered and what is not. My office gets a lot of inquiries from people who ask, "Why will no one tell me what I am entitled to when I am older?" It is because no one has an easy list of entitlements. Perhaps we could clarify the situation by saying what our multiplicity of systems, our patchwork, has and maybe what it should have to meet the needs of Canadians, and what is the basket that should be covered.

The Chairman: And, by implication, what should not be covered.

Ms Sholzberg-Gray: Exactly.

Ms Deber: As a political scientist, when there is confusion, I look at who benefits by having confusion. The first law of cost containment is that the easiest way to control costs is to shift them to someone else. There is a great deal of first law going on. Everyone is cost shifting and calling it savings. If the total costs are higher, you have not saved anything: you have merely shifted the cost over to someone else.

There is an essential need for an accountability framework within the health care system, because the deal we have made with the Canadian people is that you will have timely access to high-quality care when you need it. If we are not meeting that part of the deal, not meeting that part of the bargain with Canadians, then, of course, they will want to start looking for alternatives. If they start looking for alternatives, that starts bringing in higher total costs, greater burdens on employers, worse equity, and many other things that we do not particularly want to have happen.

I should like to say something about the way we look at allocation. If you do not have fee-for-service medicine for certain things, they become easier to manage. If you are in a hospital, you do not have to ask, "Have you insured a nurse to take vital signs? Is taking vital since an insured service?" If you have enough nurses, they decide when they need to take vital signs, and they do it. There is a certain case to be made for having global budgets for certain things. You have the staff that is needed and the staff figures out what needs to be done with the patients in order to give care. There are certain things that need to be on the fee-for-item basis but there are many things that do not.

The caution that I would make is that the regions that we have set up in most of Canada are far too small to be sustainable in that way. At minimum, even for primary care sorts of services, you need 100,000 people to be actuarially stable. For specialized services, you are talking much larger than that. We have to remember that no one size fits all, and we have to be thinking in terms of mixtures or blending, so that there is some way of blending specialized services for special needs that are not going to be met within a region because the population is just too small with things that can very easily be managed within a regional setting. By that I do not mean just high tech but include things like diabetes education programs for Chinese persons, because there will be different diets. There may thus be some scope for a national role in setting up telemedicine and other measures, such as national centres of excellence that people can link into and receive care from. They might even include pharmaceuticals within protocols and evidence-based medicine, and other things being reformed so that you have primary care set-ups for local types of care.

It is important not to get into the idea of one size fits all and not to be hyped by the idea that the way in which we are currently paying for and delivering services is the only way to do it.

Senator Carstairs: Dr. Deber, on page 41 of your presentation you have per capita spending, 1997, provincial and then total. I must say I was quite struck by it because it appears that some of the have-not provinces, such as Newfoundland, for example, are spending more per capita on the health care of their citizens than Ontario or Alberta. Have you or anyone done any kind of analysis to try to find out why some provinces are spending less per capita and other provinces are spending more? Having spent some time in the Yukon and Northwest Territories, I know the reasons there. They have to do with remoteness and flying people out of the territories and so on. What explains the other disparities?

Ms Deber: That is a good question. It would need some careful attention. One obvious thing is that you have economies of scale. If I am talking per capita spending, and I have a fixed cost to set up an emergency room and I am spreading it over fewer people, then the per capita cost will be higher. However, another part of the explanation is priority decisions made by provincial governments. Another thing that is quite striking is that the provinces that are fairly affluent were spending less on a per capita basis, and there is a certain disjunction in my mind between whether they have enough money to pay for the services that they need or whether they do not. The entire basis of federal transfers since 1977 has been, "We just give you money and you decide how you are going to spend it." If that is not the case, if they are saying, "No, we are only going to spend it if you link it in," there may be a case for re-examining the CHST and that type of approach.

It is also very notable to see that in Quebec there has been far less private-sector funding, and one of the reasons why there is much greater perceived crisis in Quebec may be that the private-sector funding has not come in to replace some of the public-sector funding. I think there has been too much focus on federal transfers and too little focus on what provinces decide needs to be done and what they are doing about it.

Senator Carstairs: To continue with that, in doing some comparisons with education funding some years ago, I discovered, much to my amazement, that in the early 1980s the Province of British Columbia was spending literally nothing on post-secondary education. They were taking all of the federal money and spending all of that on post-secondary education but they literally had no budgetary amount for post-secondary education.

We are talking choices here, where a provincial government says, "We are not going to put any money into post-secondary education." British Columbia, according to this chart, actually puts more money into health than it would appear any other province does per capita. How do we get that kind of information? How do we find out what programs are covered by each province and what programs are not, so that we can come up with a realistic concept of what is being spent on health care in this country? Quite frankly, I do not know what is being spent on health care, and I suspect neither does anyone else.

Ms Deber: I think you have nailed it. That is an extraordinarily important thing to be doing. I have been trying to find out what happened to the Canada Assistance Plan money, and no one even keeps track of what was Canada Assistance Plan shareable any more, so you can not get a handle on that. In a similar vein, I was trying to find out what Ontario did with post-secondary education. No one keeps information pre-1977. Spending on colleges and universities is separate from spending on community colleges. Again, just looking at colleges and universities, they are spending less on operating grants for colleges and universities than the amount of money they were getting from the federal government in imputed transfers. Again, I do not know how much difference went into the community colleges.

You are right. We need an accountability framework; we need to know what is covered and where the money is going. As a researcher, it would be wonderful to have access to that.

Senator Carstairs: I come to my final area of questions, which I merely throw out because I do not expect anyone to have any answers. We are an increasingly aging population. If our analysis is correct at the present time, the majority of your health care dollar -- your lifetime health care dollar -- is spent in the last two years of your life. What should be the responsibility of aging persons, in terms of the money they have, which they are then going to leave to the next generation? What should be the responsibility, if any, for them to pay for some of those costs?

Dr. McMurtry: I do not have an answer, but I can make a few comments. We are trying to do an analysis at Health Canada as to how much of the increase in health care expenditure each year is attributable to aging, and currently it is about 4 per cent, much less than you might expect. For example, 1 per cent a year is related to technology. Of course, those are not completely separate considerations. That is expected to rise 0.6 per cent per year over the next 10 years.

Much is being said about our aging population and how much of a burden that will create. There is no doubt that beyond the age of 65 there is more expenditure per person on health care. I do not have a definitive answer, but I thought you would be interested in those numbers.

Finally, in terms of end-of-life issues, which the Senate is currently studying, there must be much more public dialogue. I would argue that much more thoughtfulness about care and less about knowledge-related expenditures is in order. I believe that the more discussions we have about that the better.

We keep hearing about all the expenditures that occur in the last six months or two years of life. The problem is that we do not know when that time period has been reached.

Ms Jeans: When Canada initiated a publicly funded health care system, or systems, as we now know, people did not live as long. People did not expect to live to be 80, 90 and even 100 years old. Also, people believe in the equity of the system. They believe that all people have a right to health care when they need it.

With regard to whether, as we age, we should assume financial responsibility for our care, the fact is that people are not passing a lot of money on to the next generation and the next generation is paying a lot of money to look after their elderly family members. I am not sure why you asked that question, but I think it is the other way around at the moment for most Canadians.

Ms Deber: It is a good question, but it is like the tax questions about vertical equity versus horizontal equity. When two people are ill, one of whom has more money than the other, it does not seem fair that the person with money does not pay some of the expenses. On the other hand, if two people have the same amount of money and one is ill and one not, is it fair that the sick person pays because he or she happens to be ill? It is a question of how you choose to look at it. It sticks in my throat to say that someone should pay for the privilege of having cancer.

The bottom line is, given the fact that it is cheaper to purchase necessary care publicly, if we cannot afford things publicly, we cannot afford them universally privately. If we are going to have a mixed system where some people pay for health care on their own, we are saying that if you cannot afford to pay for it, you will not get it. I find it entirely plausible that there will be certain things that we will decide we simply cannot afford to provide universally and, therefore, if you want it, you get it on your own. However, I would not confuse that with a discussion of equity.

Ms Sholzberg-Gray: In certain countries, perhaps even the United Kingdom, people above a certain age do not get kidney dialysis. I do not think those kinds of rules would be acceptable in Canada. I would not single out older Canadians as a group that has to pay for their care because they are nearer the end of life or they have more resources. It might well be that they contributed a lot in taxes earlier in their lives and it is those taxes that are covering their health care.

It is always important to use an outcomes-based approach in health care and to provide appropriate care at the appropriate time. Appropriateness is sometimes not related to age but rather to the condition of the individual. Of course, one never knows the outcome in advance, but the issue of appropriateness is always very important; in other words, if we give the proper care in the circumstances rather than throwing things at someone whether they are appropriate or not, then the issue of cost will not come into it.

Senator Keon: I should like to ask all of you to consider the following: I believe that we have put ourselves into a conundrum. Because of the urgency of delivering health care, we have developed a system that lets sick people fall into it and then we try to get them out of it. We are continuing to respond to that system. I believe that we need a system based on a dynamic monitoring of population health. I was interested to hear Dr. McMurtry address the three solitudes and mention that they should be integrated.

We need a system that will monitor the population health of the nation and respond to it in a positive way with its resources, and we must use the knowledge in our health research to do this. As the knowledge from our health research works its way through your three solitudes, which will be integrated in a perfect world, we then look at the outcome as it relates to population health and we input, through targeted research, pure research, epidemiological research, and so on, whatever is necessary to make the adjustment. I think that if we could get there, this committee would have done something useful. I should like to hear your comments on that.

Ms Deber: As someone who works in what was a division of community health in which determinative health is an article of faith, in the best of all possible worlds that would be right. The trouble is that there are too many things that we do not yet know enough about how to prevent. We have some idea of how to prevent cardiac disease, but there will be a lot of cardiac disease that we do not know how to prevent. That is true of cancer and a number of other conditions as well.

Also, things that are not known to be effective are not necessarily ineffective. There is a whole area of which we do not yet know enough. I agree with the importance of research, best practices, and trying to feed back information and improved practice. That is critical. However, we can get a little hypnotized with the idea that we already know enough to be able to prevent everything. We will still have people who become sick or are in an accident who will need sickness care. Therefore, although wellness and population health is incredibly important, I do not think it is yet at the point where it can replace what we have.

When the national health system was founded in England, the belief was that there was an excess of ill health and that by providing health care services you could get rid of that ill health, prevent illness, decrease costs, and everything would be wonderful. Of course, that never happened.

I have probably been in this business too long, but we keep hearing people say, "If only we could put money into prevention we would not have to worry about sickness care." Our knowledge is not yet good enough on prevention. I can, however, see enormous potential for this in some areas, mental health being an example. Once we get a real understanding of the major dimensions of schizophrenia and depression, there is potential for enormous savings and improvement of lives.

I see potential on the horizon, but as of yet I do not think we are ready. However, I would say that public health is undervalued and underdone. I believe there is some underinvestment in basic public health activities.

When I was in Atlantic Canada, I became aware of communities in which the water supply becomes unsafe for numerous periods in a year. It seems, given our current situation, to be rather strange that we have not made the investment to ensure that major cities in Atlantic Canada have safe water.

Therefore, yes, public health is something that we have not been doing enough of. However, I do not think the formulas or the knowledge are yet sufficient to move completely to a population health system, although I believe it to be a positive alternate aim.

Senator Keon: I would like to change the focus of your answer because you addressed population health in the context of primary and secondary prevention. I am talking about the full context -- the three solitudes that Dr. McMurtry mentioned. I am referring to health outcomes for hip replacements and other such treatments. I agree that we do not have the scientific knowledge to deal with everything on a prevention basis, but I would like the rest of the panel to address my question in the context of the broad base.

Dr. McMurtry: I think we would all agree that there will never be that moment when we can say that we are wholly in the area of prevention. I would hasten to add, however, that there are extraordinary opportunities for prevention in three areas -- workplace health, education and literacy, and early childhood development. There is clear evidence that there would be a positive impact in those areas.

In order to integrate fully and to bring the solitudes together, there are efforts required on at least four levels. The first level is the whole notion of self-care and how we help people and enable them to gain control over and improve their health. There is some interesting literature and a movement connected to Health Canada that I have discovered that needs a greater profile and more attention. I would refer to the phrase "health literacy." There is a great gap between what is being done and what could be done.

The second level would comprise an investment in communities that are defined as having a population of between 5,000 and 10,000, communities that are small enough that people know each other by name but large enough to support a public school, a park, and a main street of 300 meters. It is the kind of base upon which you can build support groups, where people can help. It is an issue of mutual aid and education. This type of investment in communities would help to create communities that are supportive of health and well-being. There is much information and research related to that.

In terms of the third level, there is no reason for not having vigorous data collection and information on-line that can keep its finger on the pulse of the health of the population. Such efforts are already in existence. It is exceptional, not usual, but it can and should be done. This effort benefits all and has shown that it is of interest to researchers, to the public, and to community planners.

The fourth level is the toughest one for the population as a whole, in that it is the notion of healthy policy in contrast to health policy. For example, it compasses the effects of globalization, the workplace, the environment, health, and other such issues. The efforts in this area could be extremely difficult, but we should not, as a country, back away from them.

You implied that the integrated notion is something that you will be discussing soon -- when, it is hoped, Bill C-13 passes third reading, which will establish the Canadian Institutes of Health Research. I do not know what the exact answer is, but that surely is the trajectory that we must take to be ahead of where we are now. We must bring together the three solitudes.

There is enormous opportunity for improvement over the past as we re-invest in those four levels.

Ms Sholzberg-Gray: We would agree with those statements that have been made. The Health Action Lobby is always lobbying for more money for health care but always in the context of the kinds of approaches and changes that have to take place, not just maintaining the status quo but in the context of changing the system to better meet the needs of Canadians in the ways that we discussed earlier.

Senator Pépin: Dr. McMurtry suggested that a unified vision of the future is missing. I agree with your presentation. What are the major mistakes that we made in the 1990s, before we started building for the future, in your opinion?

Dr. McMurtry: The question is an extraordinarily important one. In terms of what went wrong in the 1990s, the list is endless. I will try to draw on my memory to recall some of the elements. I will answer the question from a health care system point of view and then from the standpoint of the health of the population, because we have done most everything wrong. I would say that there are few stones left unturned in terms of wrong directions.

Health care reform, we heard very clearly, was based on financial motives. I would say that financial, as opposed to human, coordinates were referenced for engineering. The biggest mistake was that there was not a replacement in the community for that which was being cut out from the existing sector. I have heard it estimated, although I have not seen a good analysis, that for every $6 cut there may have been a $1 re-investment in the community setting. From a health care standpoint, there was a terrible mistake.

In one five-year stand, I noted that there were some 43 million hours of nursing withdrawn from institutional care of all kinds, on a denominator where it would represent one sixth of all nursing hours. How do we imagine replacing that?

I have noticed that, in the planning of the health care changes, there was a very clear effort to exclude what would normally be considered experts. It is not that exports should declare what happens -- I would not make that case -- but to suggest that they should not have a voice is foolhardy. There is no question that health professional groups have felt profoundly alienated. I would identify that as another error.

Some of the more heartbreaking errors include the increased number of children below the low-income cut-off line. The hardships that we went through with unemployment -- from which, happily, we are now recovering, with a 6.9 per cent unemployment rate -- created a painful dislocation. The things we are doing in the workplace, where there is major stress and difficulty because of loss of control, loss of respect for work and, indeed, fewer discretionary hours for family life, are taking us in an inappropriate direction.

I believe that the reduction in public health support is also of great concern. I am certain this is an incomplete list, Senator Pépin, but I have also been very concerned about what has happened in the educational systems -- more specifically, the closure of public schools, the discontinuation of some programs, teacher-student ratio problems, and the increased fees for post-secondary education, which has the effect of selecting people on the basis of affluence as opposed to ability.

I would say that all those directions are of great concern.

As we think about health and well-being for the future, yes, we must think of the health care system, but we have to integrate into that our thinking of the impact of public policy on the health of people and how it places them at risk.

On average, as you know, Canadians have lost 6 per cent in terms of real income, according to Angus Reid. That too has an impact.

I apologize for not being as well organized as I might be in the answer, but I see a number of forces. I have neglected the whole area of, for example, ecosystem health, where we have not taken correct directions. That is a most important question.

Senator Pépin: I understand where you are coming from when you say that a unified vision of the future is missing. That is why I had to ask that question.

We spoke about the role of the private sector versus the public sector. What is the role of the private sector in the future?

Ms Deber: There is clearly a major private-sector role in delivering health care, and I think it will continue. There will also be a private-sector role in paying for items that we do not want to pay for from the public sector.

There is also a real question about what role we want the for-profit sector to play, and this does come into the question of what is good use of taxpayer money and what we have to sacrifice to make the money that goes to shareholders.

In philosophy of policy, there is a famous saying, that when you have a complex policy problem, you do not solve it; what you do is you replace one set of problems with a new set of problems. If you are successful, you prefer the new problems to the old problems. In this issue, I do not see a solution, I see a perennial replacement of problems.

Dr. McMurtry: The crucial difference between for-profit medicine, as we see in the U.S. and elsewhere, and the public or single pair system is one of risk adjustment. If, on the one hand, there is universality, if there are no exclusions, then you have a health care system that Canadians will believe in. If, on the other hand, there is risk adjustment, where we say, "No, you are too old, too sick, too fragile; you cannot pay, therefore you will be excluded," then we will have failed. That is the fundamental difference. The private sector will always have a role to compete to provide, whether it is with respect to therapeutic products or technology, and that is perfectly acceptable. However, when it comes down to the decision to treat or not to treat, to include or to exclude, that is a very fundamental principle.

I want to make one other comment. What gets less focus than it might is the extraordinary importance of the Canadian health care system sociologically; that is, that it is known to be a unifying feature and it is the most successful program in the context of distributive justice that we have ever had in our history -- or at least in my lifetime.

Senator Pépin: I have a question for Ms Jeans. My perspective is from the 1950s and 1960s. I am a former nurse. I am wondering how you see the role of nurses and nursing in the future. This is a very important issue.

I have a personal opinion. I believe that the provinces have reformed their health care system on the backs of the nurses. It hurts me when I see that many of them do not get the respect they deserve, that their work is just becoming routine, and that they are not part of any decision-making process. Do you have any comment on that?

Ms Jeans: There is no question that the impact of the last eight years on nursing has been -- well, it has been unbelievable. I also graduated in the early 1960s as a nurse, and I have seen enormous change. In the last few years, that change has been very discouraging.

Right now, we know that 50 per cent of nurses do not have full-time jobs. They sometimes work for two, three or four different employers. The average age of nurses is about 45, so the bulk of nurses will be retiring in the next 10 years. There will not be a nursing workforce unless something is done right now.

I also believe -- and perhaps this is part of being a nurse -- that nurses have always been leaders in health care on the ground. They have instituted many things, from a public health perspective to a caring and palliative care perspective, that are highly valued by Canadians. I believe that the health care system of the future has a very important role for nursing. Nursing has been underutilized if we look at the larger system.

When we talk about reforming primary health care -- and Dr. McMurtry referred to it -- we see a multidisciplinary team as access to the health care system. Right now, we have what I always picture as something like Loblaws, where most of the cashiers, except two, are closed and where a physician is taking in the people who are all lined up. We could open all of those stalls, using different health care professionals, who would obviously be working as part of a team, so that ultimately people get to see who they need to see. We have not done that. We could do things so much more efficiently and effectively. I think nurses have a very important role.

The other area that is growing is the whole area of specialization. We have many nurses in Canada, at least 12,000 nurses, who are now certified in a specialty. I am sure Dr. Keon is probably familiar with those nurses who specialized in the area of heart health. They play a critical role in integration and communication around the needs of individual patients and their families. I see that as a growing and strengthening role in the system.

I have not lost all my hope, but I continue to work very hard to try to ensure that there is no further deterioration and that we begin to move forward.

Ms Sholzberg-Gray: Dr. McMurtry referred to one of the errors that was made, that being the removal of so many nursing hours when hospital beds were cut. Somehow it was thought that the care was not needed. One would have thought that it should have been the hotel services that were not needed but that the care always would be.

Senator Pépin: The nurses were not part of the decision making. They were told what to do. Hospitals could have saved a huge amount of money had they involved nurses at every level of decision making.

Ms Sholzberg-Gray: I should say, seeing that hospitals and other care facilities are part of my membership, that these decisions were imposed on them by governments whose agenda were cost cutting.

Senator Pépin: Yes, you are right.

Senator Callbeck: My question deals with the method that the federal government is using to fund the health dollars that go to the provinces. As you know, back in the 1960s, we had cost-share programs, where, if a province spent $1 it would get roughly 50 cents.

In 1977, I believe, we went to Established Program Funding, which was block funding based on a formula that had nothing to do with what the provinces were going to spend on health. The dollars were passed to them. It was to include not only health but education as well, with basically two thirds to be spent on health and one third on education. In 1996, we combined EPF with the Canada Assistance Plan, which had been a cost-shared program.

Currently, they are lumped together into the Canada Health and Social Transfer, whereby a certain amount of money, based on a formula, is given to the provinces. There is no commitment on the part of the provinces that those dollars will be spent on health or on education.

I would like your views as to whether you feel we should be returning to cost-shared programs; or perhaps your opinion is that the block funding method is better. What is your opinion?

Ms Deber: I am doing a review for HEAL on the different approaches that can be used for funding, and they all have advantages and disadvantages. If you are concerned with ensuring that national standards are met and that money flows to particular programs, it is quite clear that block funding is not effective. Block funding is effective only to the extent that provincial priorities are the same as the priorities of the people who are transmitting the money. The whole purpose of block funding is to allow provinces to use monies for their own priorities. If they do not want to put money into post-secondary education, or they want to cut welfare, then they have money to use for other things. If a province believes that better early childhood education would decrease the need for other sorts of programs, it would be able to use the money in that way.

The extent to which it has become an ideological football is alarming. People are arguing as though there are health dollars; and as you have amply said there have been no health dollars since 1977. The money is being used for tax cuts and rhetoric instead of being used for health, post-secondary and childhood education, welfare, housing, or any of the determinants of health, which was the idea of the transfer.

The evidence has shown strongly that, if we are concerned with making sure that certain standards are met, an untargeted transfer will not do that. If we are concerned with making sure that provinces have the fiscal ability to do what provinces want to do, then untargeted transfers are very effective. It becomes a policy question as to what our goals are.

Ms Sholzberg-Gray: When the Health Action Lobby had its pre-budget meeting with Paul Martin prior to the 1995 budget, and he told us that he was thinking of having a yet bigger block transfer, we frankly expressed our concerns about that. We argued at the time for, at the very least, a health specific transfer, a health block fund, so to speak. In fact, at the time, we had been speculating about this huge block transfer for years. It was then called "MOAT", Mother of all Transfers -- following the expression that was born in the Gulf War.

We advised Mr. Martin that that was not a good idea. The result would have been the provinces cutting important programs that the federal government might wish to support. We have seen no trace of Canada Assistance Plan programs, not only on the welfare side but on the social service side, as well. One third of CAP was to be used to provide the very social services that the federal government now says are going to be essential in the health care system of the future, namely, the community support services that were 50-50 cost shared under CAP. We must reinvent them, so to speak.

The move to the big block fund was a mistake. I am not sure that 50-50 cost sharing is the answer, either; I am not sure we can go back to that. I have not read Ms Deber's paper -- I intend to read -- but I am of the opinion that we would have to look at specific transfers more in the future than in the past. I do not think the CHST as it is currently constituted is serving us well -- not individual Canadians, not even necessarily the provinces, not the federal government. It is not really the way to ensure that Canadians have access to comparable services wherever they live in this country, and that surely is the reason for the use of the federal spending power.

Senator Callbeck: When the study for HEAL is completed, could a copy be provided to the committee?

Ms Deber: Yes.

The Chairman: I should say Senator Callbeck is a former minister of Health and premier of Prince Edward Island, so she is familiar with these issues. I must say that, as I listened to the discussion, I was reminded of that Yogi Berra line, "This is like déjà-vu all over again." In 1977, when EPF was started, I was one of the very few people around Ottawa in a policy position who was passionately arguing against EPF. My grounds were that it would duplicate the experience we had in Nova Scotia, where, in the early 1970s, when we went to block funding from the province to the municipalities, the provincial government found itself complaining that the municipalities were not spending the money the way in which they were supposed to. It was self-evident that block funding would lead to that situation. It is interesting that, almost 25 years later, we are back to where we were.

Would your study also address the federal role in that funding issue? There are two separate questions: What are the models of funding? What is the federal role in terms of being able to influence where the dollars are spent? In the original 50-50, the role of the federal government was very substantive. I will remember "the Mother of all Transfers" acronym for a long time. In that case, the federal role, in terms of influencing how the money, is essentially zero. Will you be looking along that gradation?

Ms Deber: I have taken evaluation criteria from a number of sources, from the National Forum, the Canada Health Act, the Social Union Framework Agreement to a number of writers on fiscal federalism. Certainly that is one of the evaluation criteria.

Senator Fairbairn: Thank you for the tremendous information you have given us today, as well as the wisdom that you have brought with it. I am sitting here in a combination of shock and joy. I have spent the last 16 years of my life plodding through the trenches across the country on the subject of literacy, often to a response of disbelieve and unwillingness on the part of many who hear about this issue to believe it or engage in it. It is extraordinary for me today to hear the level of importance, particularly on your part, Dr. McMurtry, that has been given to the notion of the impact that fundamental learning and understanding have on the individual opportunity of Canadian citizens to receive health care, to understand health care, and to be able to take responsibility for their own protection.

I hope your words are heard far and wide. There is a continuum from the age of two, when a child is capable of learning, to this huge block of seniors in our country who need much health care but have profound difficulties in being able to follow through themselves or understand it. I thank you very much for that.

I would like to return to one area, which has been touched on in terms of questions of integration and communications in what many of you have said today. As our system is changing and, arguably and potentially, as good things are being done in terms of new ways of providing health care in the community, in home care, et cetera, I should like to hear your views on the degree to which a lack of internal connectivity and communication in our system is creating a barrier to the kind of communication of which you speak.

We know what should be there -- when there has been, say, surgery and then discharge from a hospital, there should be a system out there to assist. However, particularly if you are an elderly person, it is incredibly difficult to find the linkages that allow you to go home and, in some way, access that assistance. That goes from the doctors, through the hospitals, through the nurses, through the community.

In terms of this committee dealing with the future of health care, this issue looms large in my mind. I would like to have any thoughts that you might bring to it, because at this point, at least from the Province of Alberta, I think there is a disconnect. It is not meant to be there; it is just there because within the system there is no communication.

Ms Jeans: What you are saying is true. Even as a health care professional, I recently experienced the solitudes of different parts of the system. When my father, who was elderly, became ill and was hospitalized, the hospital wanted him to have home care. Trying to put things together was a huge challenge for my parents, but it became a challenge for me in trying to help them.

There are a number of ways that we can address this, and part of it is communication. The health care system is under enormous stress. Communication is a luxury at the moment. People in the health care system are just trying to do basic things. I also think that because Canadians have grown up with a system that really was hospitals and physicians, which is what medicare was, they do not understand that there are other ways that we can receive care and support and so on.

Part of that is education. We have not done a very good job of helping Canadians understand the changes that have evolved, even though they have remained imperfect, for sure. As we speak about patchworks of services across the country, we do not have a gestalt of what the health care system is for people to understand. Even at the local community level, we have not done a very good job of educating people as to what resources are there to help them.

One of the biggest problems right now, quite frankly, is the jockeying between the provinces and the federal government. The federal government is saying, "Look, we do not want to put more money into a black box because we think you might just use that money to cut taxes." The provinces are saying, "You do not give us enough money to tell us what to do anyway." They are at loggerheads. When you talk about no communication, we must, as a country, get the different levels of government to agree on a plan. If we could have agreement on a plan, I think health care professionals and the public would try very hard to work together to have an integrated system where there are no gaps between the various aspects. Right now, however, the big challenge is getting the governments to work.

Ms Deber: I completed a research project -- which I actually must thank Health Canada for funding, through NHRDP -- that looked at long-term care reform and home care reform in Ontario. For over a decade, there were governments from each political party, each of which had a different policy proposal around how to reform home care. What it made clear is how little agreement there was on some fundamentals. If you asked at the theoretical level, everyone was always endorsing. If you looked at all the documents, they all had the same verbiage: "We are meeting consumer needs and we are integrating." You would think they are the same document. Then, when you take the design decisions and put them into actual programs, they differ quite substantially on a number of things, like what scope of services should be covered, what skills and what pay levels or providers should be involved.

What has been happening is what the Canadian Medical Association calls passive privatization, which is that if a person can be sent home there is no need to pay for the home care. Ontario has now set a limit of two hours of home care paid per day. You try and die at home with two hours of home care per day. Then, they are surprised when people turn up at hospital emergency rooms because this care is not being paid for.

This is not just an issue about communication, it is a proxy for the question that all of you have been raising about the boundaries of the system, what it is that we think should be paid for.

The other caveat I would like to put in is that we talk a lot about community. What is odd is that we are talking about community as this geographical group of 1,000 to 2,000 people. This is at the precise moment when communications technology has meant that that is an absolutely obsolete definition of community because we are communicating all over the place. One of the mistakes we have been making over the past decade is retreating back to geographical decisions around how we should be organizing services, often for communities in which people do not receive services that way. That is not what the catchment areas are, that is not how people move around. We are drawing little lines on the map and we are assuming we know where people will go, and they do not go that way. One of the things that I would like to see as a vision for the future is a recognition that we can use some of this communication technology and build actual national level communities around certain things that will not work on the block level.

Primary care and many basic things, yes, will work within its own community, although we should realize that many of them are multicultural rather than geographic. For other things, we can build up communities on a nation-wide basis, and we cannot just think in terms of geography.

One of the odd things to me is when we compare health care systems, and you mention the United States, Sweden, England, Saskatchewan -- we do not even have a national system of health care. When we talk about regionalizing and going down to the community level, most of our provinces are already fairly small communities; in fact, they are smaller than most U.S. health care plans. If you look at how health care plans are emerging, they are merging into levels that are far bigger than most of our provincial plans already. Therefore, we may be going too small on some things, and on other things, it may be time to start talking nationally.

Ms Sholzberg-Gray: I want to add one thing to that. You were talking about the bewilderment of the consumer, who is not guided through the program but merely left to lobby, to advocate or to not know to what they are entitled. Not only do people not get enough care in the community in terms of this cost shifting, there is the anxiety on the part of the system to not let you know that there is the possibility of the care because that will be fewer clients for the system and less usage.

Basically, we are talking about a system in which there are many unmet needs. That will not be the integrated system of the future. People will need to be shepherded through the system. We are not there.

Senator Cook: I heard you talk this morning, each of you, about the need for long-term predictable funding. On what basis can or could we determine how much money is enough for health care?

Mr. McMurtry: We are a long way from having an answer to that. I think that governments, too, must plan. We will be much better served in the future if we stop listening to those who characterize runaway health care expenditures in a way that does not correct for a whole host of things that are pretty obvious. I am referring to things such as inflation, increase in population, costs of new technology, needs of the population -- matters that should be of primary consideration in the first instance.

In answer to your question, governments need to plan as a percent of GDP as a guideline, but the driver surely should move from the resource allocation decisions that we currently have into a needs-based formula based on population health evaluations. That can be done and has been done.

I am not sure if I am hearing Ms Deber say that she is discomfited by my response, but this is a point I made earlier. It is absolutely essential. Needs as measured by population health services, which Canada does extremely well and is getting to be done better, is a stable information base. That ought to be the fundamental piece for saying, "Here is how we will fund". If we get through the bad part of the economic cycle, I think everyone understands that you might have to make an adjustment. However, stay attached to the needs; switch over to the needs-based population base from the allocation processes we now have.

In response to Senator Fairbairn, I had an opportunity to review the provincial cancer care system in Ontario. The first finding was simply that no one could deal with the system without a professional navigator. A group of nurses, who have subsequently created a business to help patients, found that patients could not cope if they were not given constant assistance to navigate among primary care, surgical oncology, radiation, medical oncology and various other players. That says it all, and it is not just the case in that care.

For the future, we must have an electronic record that follows a person, a record that is person-centred not institutionally based. That is a minimum requirement. Second, people need to have a longitudinal record through their life cycle, as much as possible, with community care, or however we characterize the primary care piece, and it is absolutely crucial that it be longitudinal as opposed to episodic. Research has shown that drop-in medicine, the McDonald's medicine, the episodic care, is actually harmful.

Those are the three crucial elements: rostering with the community-based health provision organization, which we will call primary care, that it is done longitudinally, and that there be an electronic record that follows a person.

Ms Deber: Senator Cook has hit the key question. There is obviously no right answer. The question is: What do you want to purchase, and how much do you want to pay for it? Depending on who you have delivering and how much you pay them, you can use vastly differing amounts of money to buy the same sorts of care. You must be careful about that.

I am somewhat leery about too heavy a reliance on indicators, because, again, they are not yet ready for prime time. The cautionary example I will use is something called the Rand Health Insurance Study. This was a classic U.S. health economics study that randomly assigned people to a number of different health plans, some of which had co-pays and others that did not. They concluded that, if you made people pay for their care, they would use less care, that there was not a big hit on health outcomes, therefore, you should obviously have user fees for health care.

Three years later, they published a supplement that stated: "For the few small cases that we looked at where there were measurable effects of not having care, like blood pressure, we found worse health outcomes, we found more death, we found other things like that. However, this is not a problem because we can target these things." If you go through all of the things that they did not bother mentioning, like diabetes and other things like that, you start realizing that if you do not watch it on your health indicators, most of the things that affect quality of life do not necessarily turn up in these measurements. Therefore, you can have a good argument about not needing to do anything except things that would kill you if you did not see the doctor for it today.

I become somewhat leery about some of these indicator-based approaches because they are simply not sensitive enough to pick it up. If you look at some of the excellent work done for the National Forum on Health, population-based determinants of health that everyone knows affect health did not correlate with the health outcomes either.

Our health outcome measures are simply not solid enough yet to rely on as heavily as planners would like. In terms of your question, that will depend on who you decide to pay and how and for what.

Ms Sholzberg-Gray: I should say that the Health Action Lobby is asking for an escalator, and at the very least the escalator must be based on inflation and population growth. We are not talking about all of the other factors. We have seen through the figures that we heard today that in real dollars and on a per capita basis we have declines in health care. You cannot serve the health needs of Canadians with reduced health care dollars. They at least must keep pace with population growth and with inflation.

Senator Cook: The question that I will ponder is not on what basis can or should we determine how much money is needed but who will micromanage this piece of money. There are so many players in the system.

The Chairman: I thank all of the witnesses for attending this morning. I realize that we went longer than we told you we would; however, it has been a very interesting and provocative beginning.

Honourable senators, before we adjourn, we need a formal motion to adopt the committee's budget.

Senator LeBreton: I so move.

Senator Fairbairn: I second the motion.

The Chairman: Is it agreed, honourable senators?

Hon. Senators: Agreed.

The Chairman: Thank you, honourable senators.

The committee adjourned.