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

Issue 52 - Evidence


OTTAWA, Wednesday, May 1, 2002

The Standing Senate Committee on Social Affairs, Science and Technology met this day at 3:50 p.m. to examine the state of the health care system in Canada.

Senator Michael Kirby (Chairman) in the Chair.

[English]

The Chairman: Honourable senators, we are here to start the work to be incorporated into our next volume, volume 6 on the state of the health care system, which will be issued at the end of October. This volume will take our proposals and put them into terms of what it would cost the average Canadian. Our hope is to put forward several alternative revenue-raising proposals so that Canadians will be able to engage in a debate in the context of understanding what it means to them, not only in terms of improving the quality of health care but also what it means in terms of the impact on their pocket books.

Our witness this afternoon is Michael Decter. He has been a former Deputy Minister of Health both in Manitoba and Ontario. He has written a number of books on health, including Four Strong Winds of Change, which was published a year ago. He is acknowledged to be one of the country's most creative thinkers about health care policy.

The fact that Mr. Decter is our witness while we have in the audience a number of students from the Forum of Young Canadians, who are here on a week-long study of government and Parliament, I think is terrific because, amongst other things, Mr. Decter is a wonderful teacher. Welcome to the students. We are delighted that you are here.

As you know, Mr. Decter, this meeting is informal in the sense that we would like you to begin with reaction to our report. Then we would like to ask you questions. Thank you very much for coming.

Mr. Michael Decter, Chairman, Board of Directors, Canadian Institute for Health Information: Thank you for the invitation. I will start by congratulating the committee on volume 5. I said this at the time of its release, so I will only take a second to reiterate: It is a very thoughtful and creative response to the dilemma in which Canada finds itself with regard to going forward in the health policy field. You have obviously picked through a great field of policy landmines and come up with something that has that great Canadian feeling of being a bit of a tapestry. It is not as pure as perhaps some of the early ideas, but it is tempered by a good deal of reality.

I should also say in my callow youth, I harboured somewhat Western abolitionist views of the Senate. Those views began to weaken as many people I respected and admired were appointed. I think in the light of this excellent report, I have to collapse those views entirely. I do now see the need for a second chamber.

My understanding is that you are going to try now the hardest leg of this relay race, which is really to translate volume 5 into a volume 6 that speaks not to what should be done but how it might be done. That is a huge challenge for a number of reasons. As a committee of the Senate, you come at this from a national perspective, and a great deal of what needs to be accomplished dwells at the local or provincial level. Therefore, there is the challenge of how you reach out and influence the behaviour of people who are not directly employed or even directly funded by the Government of Canada.

I exclude from that the spheres of, for example, research, where I think you have done a superb job. I think we are getting it right in Canada. A great deal of it is within the federal sphere. Over time, if it encourages the Government of Canada to contribute more resources to health research and broaden the thrust, then that is good.

The health delivery system — which is really the big piece of this — is difficult to get at because of its scale, its inertia, the affection that Canadians have for it and the unease they have about its current level of performance. The obvious is reality that there is no shortage of views and no shortage of passion about those views in nearly any quarter. It is genuinely a minefield — not only in intellectual terms but also in stakeholder terms.

I am not inclined today to make a lengthy presentation, partly because you have undoubtedly had a great number of them. I should like to comment on some aspects of the report and then I would probably be more useful responding to questions.

Let me start with the stability of funding and the arm's length agency concept contained within principle 2. Principle 1 is important and somewhat of a given.

I have a slightly tongue-in-cheek in response to your comment that no industry can be expected to operate effectively if, from year to year, its revenue is subject to significant fluctuations beyond its control. The folks in oil and gas and mining — even the airlines — do suffer rather large fluctuations in revenue that are beyond their control. Everyone in the health care sector believes exactly what you have said, that one of the real difficulties is fluctuating funding uncertainty. Financial markets have trouble digesting uncertainty — witness the aftermath of Enron — more than they have trouble digesting single negative events. If you think of financial markets, September 11, horrible as it was, was easier for markets to recover from than Enron, which is corrosive.

We have in health care the same corrosive sense that people cannot get on with it because they are not certain whether they are about to have money taken away, money given to them or staff to be laid off or hired. We have seen some big swings in the last decade. I am sympathetic to the view that things would be better if we had greater predictability to a base level of funding upon which people can rely for a period of time, with perhaps the notion that we would have a list of projects that could be twisted up or turned down depending on the state of the public finance. There are certainly things in the health sector that need reliable funding and long-term commitments. Then, as in any sector, there are things that could be undertaken if more dollars were available at a particular point in time.

We did have, in the early days of Canadian medicare, arm's length hospital commissions and, in some cases, insurance commissions. They were folded in on the view that they were duplicative; in other words, you had the function of the department or ministry of health and you had the commission. In my Manitoba days, they were run by deputy minister. Although the commission had an independent appointed board of directors, it was on a very short arm from government because of the scale of funding. That is the biggest dilemma with an arm's length agency: Is it reasonable to consider that a provincial government would put an enterprise that constitutes 35 per cent or 40 per cent of its total spending at arm's length? It is easy to see the benefits from the health system point of view. However, it is also easy to see the public accountability argument that will inevitably be raised around provincial cabinet tables.

If you put a strong chair into a commission like that, then the minister of health's role is somewhat diminished. Maybe that is a good thing, but you need a confident minister to have a great deal of what they have to defend in the provincial assembly put at arm's length. In my experience, there is great advocacy. In fact, I had the privilege of chairing a conference wherein, in an hour of each other, former premier Bob Rae and former opposition leader Stockwell Day both advocated this particular proposal. I got in trouble for pointing out that they both said roughly the same thing, which did not seem to satisfy either of them. However, I did not make the observation that this is a view that comes more easily to people who are out of power than people who are in power.

That is a reality though. It is not the most obvious thing in the world when you are in power and you have quite a large budget, and much of your authority and prestige as a minister of health derives from that large budget, to want to give it away to an arm's length group.

I hold the view that how we fund hospitals and doctors it is more important than who sits on governance. Whether it is in close or out far, if you can get the formulas right then you can encourage the right kind of behaviour. I would certainly favour arm's length but I would underscore it may be a hard one to sell, although that does not mean it is wrong.

We regard to the federal government's role, I think it is unquestionable that the federal government, to demonstrate will, must bring some considerable financial resource to the renewal of the health system. The accord in 2000, which has not really had much publicity, was a kind of down payment on the renewal of the health system and was in the right direction in every sense. However, it needs a much more sustained effort and much stronger machinery than simply a declaration by governments that they want to go in the same direction. We can see some of the issues that are there without a more determined federal role. Exactly what form that more determined federal role should take runs right up against the federal-provincial issues, the social union framework and everything that has been done to fetter the federal power in this regard.

It is important that Quebec signed the accord in 2000. Health care is central enough that the federal spending power, despite what people may say provincially, is still powerful and quite accepted by the population. I think the federal government has some running room on the financial front.

I want to speak briefly on three other issues and then turn to questions. Health human resources are something we have done very badly in Canada. I have, for my sins, the task of chairing the Canadian Nursing Advisory Committee, CNAC, at the moment. It took me a while to work through just how wrong we got it in the 1990s. I was certainly part of getting it wrong so I bear that responsibility. In our quest for better-trained nurses, we traded quantity for quality. It was the wrong trade. We needed better-trained nurses, and I think the baccalaureate for entry to practice was a good symbolic way of saying that. We did not need to have reduced nursing school enrolments from the order of magnitude of 10,000 to about 4,000, and it has turned to be quite a disaster. The big problem is we are simply not training enough nurses in the country. We will say that more formally in our CNAC report within the month. There has been a bit of remedial movement by the provinces to move that back up by 10 per cent or 15 per cent but that does not solve the problem when you have cut the number of seats by more than half.

The argument that this is all part of a global nursing shortage, that this goes to the issue of women not wanting to go into nursing because they can now go into law, medicine and other careers that were not as open to them several decades ago, does not stand scrutiny. Every one of those 4,400 nursing seats is sought after by between three and 15 applicants, depending on the location in the country.

If I had to pick one piece of the health human resources aspect that seems to cry out for a straightforward answer, there are many men and women in Canada who want to be nurses. There is a huge need for them. This is evidenced not only by the absolute shortage, but also by the overtime hours that nurses are working and the heavy accident and illness absenteeism. In the nursing workforce, we lose one week more than we lose in the rest of the Canadian labour force. That is, nurses lose on average three weeks a year to accident and injury, while the rest of the Canadian workforce, even those in mining and forestry, lose on average two weeks.

We have too few nurses and we are burning them out. We have gone to an industrial model were many nurses in Calgary and Edmonton, with their overtime, are making $100,000 a year. The difficulty is they are not lasting because the amount of time they are working is causing them to not see through a career but to burn out, and the level of patient care suffers in those circumstances. This is not an auto plant where if someone works too many hours maybe the wheel does not get bolted or someone gets a car with a rattle. These are human beings.

We made some errors in the physician field as well. We reduced enrolments in the early 1990s and, again, I was part of that. We did not make the other changes that we were supposed to make as part of the Barer-Stoddart policy thrust. We did not reform primary care, so we now have a physician shortage. It is not as readily solvable as the nursing shortage because the training times are much longer. We are starting to see some progress there.

I know the Government of Canada through HRDC is funding two large studies. To paraphrase David Sackett, you do not need a double blind, random clinical trial to apply common sense. Common sense would say we need more nurses in this country and we need them urgently. I weighed in on that, which segues to primary care. I know if I say this that someone will quote it and it will be a mistake.

I was speaking at Queen's University on Saturday and Ruth Wilson, who is heading up the primary care reform in Ontario, was chairing the panel and Duncan Sinclair, who headed up the restructuring of the hospitals in Ontario, was sitting in the audience. I said, ``You know, Ruth, you have a far harder job than Duncan did.'' When you restructure hospitals, you have boards and management. If you order two hospitals to merge, people will talk about how best to merge and, in some cases, whether to fight it or not. There is actually a management structure to get it done.

When you think about Canadian physicians — particularly family physicians in solo practice —they are run off their feet. My younger brother is a family doctor in Brandon, Manitoba. He puts in long hours and does not have a big appetite to go to meetings to talk about whether he should merge with half a dozen other family doctors. It is not entirely in their nature and in their training.

You have an issue on primary care reform. I will regret saying this later, but it is like trying to collectivize farms on a voluntary basis. The solo-practice family doctor has many of the characteristics, both good and bad, of the Prairie farmer. He has a terrific streak of independence and a huge capacity for hard work, but a genuine reluctance to be at risk in a partnership.

When I grew up, there were endless schemes on the Prairies to get farmers to share combines and tractors. It seemed foolish to every economist who looked at it, as each farmer had more equipment than necessary, but no one wanted to miss the harvest. They did not want to be caught without the ability to bring in their crops.

Without flogging this analogy too hard, we have tried for 40 years to bring about reform in primary care. We have had modest impact. This requires a great deal of effort to be done, but it is the right thing to do. We would be far better off with the primary care system that you envisage, although you are vague about exactly what it will look like.

I am sure you have had advocacy from a number of groups about whether it should be physician led, multidisciplinary, or nurse led. I concur with your view that there are many workable models. The single biggest thing is to move from a model that cannot really work any more — which is solo practice — to groups. Those groups could have many configurations. There is not a single correct model.

Health reform faces several challenges. First, if you do not have something more robust at the first level people encounter in the system, they will walk right through to the more intensive, difficult and crowded parts of the system. Second, much of what an aging population needs to stay healthy is advice. They need to talk to someone; they do not necessarily need another three prescriptions. Yet many of our medical appointments involve prescriptions being written because there is both an expectation and a ritual to it.

Smoking cessation is something else that is helpful to people's health. Apart from a family doctor telling a patient that smoking will kill him, there is no capacity in the way we have organized the system to really have an impact on that health risk at the primary care level.

Looking at other countries, you can see them starting to make some ground on primary care reform. We must think about how. It may be worth thinking about changes in the Canada Health Act or in the funding. What we have by insuring physician services is a very powerful system that is very hard to change, even for the medical leadership who see the vision of a different health system. It is very hard to alter fee-for-service because it is parallel to the way other professionals, lawyers and accountants, are paid. It is bound up with notions of independence.

There are parts of this that are already on the right path, such as research.

Changing primary care could do a great service to the nation, if you can elaborate it and walk down the logic trail of how you incent the change. It will have a different flavour in different parts of the country. Some parts of the country have made great strides in this direction. When I lived in Montreal, I had excellent service from a CLSC. Quebec moved on part of this issue back as early as the 1960s. Other parts of the country have not moved very far at all.

Finally, on Aboriginal health, which is a federal jurisdiction, something more dramatic is called for. Our Aboriginal people have a life expectancy almost exactly 10 years less than the rest of the population. That is a stunning indictment of our approach on this issue over a long period of time.

This could be dealt with in one of two ways. It could be devolved to the provinces. That would have the virtue of being better integrated. It would need a funding mechanism that the provinces were willing to take seriously, and it would need the support of the Aboriginal leadership, who may be reluctant to lose their access to the federal government and, frankly, the federal Treasury.

The other way to go would be to have a federal minister of Aboriginal health. Let us have the kind of political accountability we have provincially, and have a separate ministry with an action plan. For example, over a generation, the goal could be to make the life expectancy of our Aboriginal population very much closer to, or the same as, the rest of the population.

Although I do not have data to support it — I hope to in the near future — I would be willing to guess that the gradient across Aboriginal communities is quite steep. Those communities that have had economic development will have a life expectancy that is a good deal better than the worse off communities. I am certain those Aboriginal people who had higher education will also exhibit a life expectancy much nearer their professional peers than from the communities from which they came. You have looked at this and the numbers are well known.

This issue has always been an orphan inside the Government of Canada. It is huge in dollar terms. With a population of half a million, it is larger than some of the provinces and the spending is on a par with several of the smaller provinces. I know you speak to it. In the era of self-government, these issues need to have the full participation of the Aboriginal leadership to be legitimate.

I would like to see someone clearly tasked and be held accountable for the job of improving the health of the Aboriginal population. I know there comes a time in the life of governments where people look for legacies. This one cries out for the investment of both time and resources to really change it. It should be a national embarrassment that we know so much about what causes ill health, we spend so many resources treating it, and yet we have made so little ground on reversing the root causes, despite much study.

There is a point of credibility with the provinces if the federal government takes a determined role in leading change in the broad healthcare system, as I think the people of Canada want it to do. This is putting one's own house in order as the Government of Canada. It would be a good thing to do, not just for that reason, but also on its merit.

I know I have done an injustice to your report, but if I were to comment on all of it, you would not have any time for questions. I will stop here and say I am overwhelmingly in support of the directions you propose, and of the view that your challenge is to figure out how to translate those into concrete plans that are implementable and achievable.

The Chairman: You made the observation that how we fund hospitals and doctors is absolutely critical. Your words were to the effect of ``we have to get the incentives right.'' Our proposal vis-à-vis hospitals is that we move to a service- based funding system, or fee-for-service funding system for hospitals, and away from the current global budget, on the grounds that it provides an incentive both for hospitals and for other institutions to enter from a competitive standpoint. Could I hear your comment on that specific proposal, but more generally, on what are the right set of incentives for hospitals and doctors?

Mr. Decter: We are only in the position with regionalization to actually do this because I think you need broader governance, which leaves Ontario as a bit of a dilemma.

The Chairman: At every conference I go to with groups of the medical profession on the question of regionalization, they refer to Ontario as the control group.

Mr. Decter: Ontario, despite Duncan Sinclair's best efforts, took the placebo a bit in this. To be fair, in those parts of Ontario where there is a single broad hospital organization on a geography, you are not terribly far off. If you bring the hospital together with the District Council, which does planning, and the Community Access Centre, which purchases home care, you can construct something — and some communities have — that is a virtual regional delivery system.

First, population density is underrated as a factor in the ability to implement an internal market. It is one of the hazards of the European experience brought to Canada. Purchaser/provider splits work well where you have enough density of population and enough density of providers to have some competition.

Therefore, we can say, ``Sunnybrook Health Science Centre, you are doing a great job of hips,'' or, ``Sorry, University of Health Network, you are not doing such a great job.'' We would do more hips at Sunnybrook on a cost- quality basis.

However, if you have a single hospital in Sudbury, you have some issues. You can certainly measure how they are doing, but it is not clear to me that the end game works necessarily in areas of low population density. Some theorists will argue that you can make it work.

We have two realities in Canada. We have a good portion of the population, perhaps 70 per cent, living in a handful of big cities where I think this model can work very well. The competition could be virtuous in terms of driving a better price and quality point over time. In the rest of it, you need strategies to have enough service there to meet the needs. It is not a matter of competition. It is more a matter of stability of funding and strategies to allow providers to actually locate.

The right way of funding hospitals, in my view, is to fund them for what they do, for what they actually accomplish in outcome terms. We do not have the data to support it so for the moment, I think we are still at a combination of some funding for them being there, because they have plant costs and they should be efficient at that. The Sinclair Commission did dig in to some of those costs. The real incentive funding should be for their effectiveness at providing the procedures for delivering the patient days, for delivering the cardiac surgeries — whatever the list.

The Chairman: We have service-based funding.

Mr. Decter: I think service-based funding is the right way with a couple of caveats. You must have a system that is well enough documented and data strong enough you do not get gamed. There is a great deal of evidence of gaming south of the border. As you will remember, a major hospital chain in the U.S. — HCA Columbia — was litigated by the government of the United States for cheating them to the tune of hundreds of millions, if not billions of dollars, by having their thumb on the scale on the coating.

You need a system that is honest, if you want that to work. We have quite a political system at the moment. You need high quality data. You need independence because if the game is not seen to be fair, you will get real resistance from it.

It is striking that the distribution of money amongst hospitals in Ontario is one of the most stable things in the whole world of health care over time. There is a great deal of push to letting a system be driven on service-based funding. There are some issues with the academic-based medical centres that need attention. I do think it is in the right direction.

If and when you get primary care groups that are robust enough, I think they can be purchasers — as they have in the U.K. — for some level of service. This is a fairly long process to get to from your stages, phases one to three.

The Chairman: We talked in the order of a decade.

Mr. Decter: In terms of funding physicians, I do not believe that that fee-for-service is the root of all evil in medicine. It is a good way to pay for procedure-based medicine. I would not like to see our general surgeons ever taken off fee- for-service. It is not a great way to pay for primary care.

The Chairman: Which is a distinction we made.

Mr. Decter: Much of the fee-for-service that goes into the hospitals gets laundered through practice plans. You have the department head negotiating with a new recruit around the package. Although the money may come into the practice plan fee-for-service, it often does not go out of it on that basis. There is a management structure, which is why I think we are in far better shape for those hospital-based specialists being able to make some change than we are with the community-based specialists and family practitioners.

Senator LeBreton: On the issue of primary care reform, there are areas of the country where some models are working. In the smaller centres, especially, there seems to be a little more desire to work in primary care teams. We will meet a lot of resistance. You talked about doctors being bound up in their own independence.

What could we do to encourage individual doctors who have large practices with walls of files operating independently to get involved in some kind of primary care team set-up?

Mr. Decter: First, one of the targets I would focus on is new doctors entering practice. Half of the new doctors entering practice are women. The survey data I have seen suggest that doctors who are entering practice or have entered in the past five or seven years are more interested in having a predictable compensation deal. That is, they would far rather have an income, a bonus, car, predictable holidays and benefits. They are not wedded to the notion that fee-for-service somehow attacks their professional autonomy or independence. The views of the PARA organization in Ontario, which represents interns and residents, are in a different place than the Ontario Medical Association, which has been tiptoeing towards reform and has had some courageous leadership. However, they often shoot their courageous leaders.

One strategy would be to present a credible, attractive package to new doctors entering family practice to go into groups, to go into a reform primary care model. It sounds as though it will take decades, but at least we would be starting.

In terms of ones that are already in, you put your finger on it very directly when you said ``a roomful of paper files.'' I had occasion to go back to my hometown of Winnipeg and visit my father's old clinic, the Manitoba Clinic, which houses some 60 or 70 specialists. The patient chart room was the most familiar in that it had not changed at all. There were still paper files with no automation.

I think bribery is in order in this particular sphere. I would bribe the doctors to convert. It is in everyone's interest that they do so. Once the information is in an electronic form, there are many things that one can do with it — including things of which you might not immediately think.

Many doctors are inclined to participate with their patients in clinical trials. It makes them feel connected to innovation in medicine. It makes them feel connected to progressive change. That is much easier to do if your patient practice is automated.

While some folks think that the drug companies are not the biggest allies of reform, in some regards they actually could be allies in persuading doctors to move from a paper world to an electronic world. There are examples internationally.

It is very hard for a solo practice physician to squeeze out the resources to add another professional. The Dutch minister of health told me she had proposed to the Dutch family doctors that if they would reduce their inappropriate prescribing behaviour, she would flow the entire 200 million gilders back to them so that they could each hire a nurse practitioner. I think she was good at her word. I have not checked, not to doubt a government official.

There may be some very clear incentives as to a give and a get. Donna Segal and Ruth Wilson are doing a terrific job. If you try to negotiate the reform with medical associations, province by province, it would be a very long and complex process. There is room for some bolder initiatives that reach out to individual physicians. There are compelling reasons to make some change.

Senator LeBreton: We have some examples. We had a doctor from Prince George, B.C. who is very happy working in a primary care arrangement. It all goes back to quality of life. There are more women doctors and such an arrangement accommodates them in their family-bearing years.

Would you attack the problem in the areas where it is doable first and then hope the others follow?

Mr. Decter: Yes, absolutely. I would go for the easy ground first. Go after areas of under service where you are just not going to staff physicians.

The Northwest Territories run much of their primary care, or all of it, with nurse practitioners. There has been a perception in Northern Ontario that it must be a doctor or are they feel they are treated as second-class citizens.

It would be better to tackle those issues. In many small communities across the west where we have closed hospitals, nothing has been put back. The argument is advanced that you cannot get a doctor to go to that community because there is no longer a little hospital. Why not place a nurse practitioner? Why not establish a visiting arrangement that puts a physician in there one day a week?

We could be more creative. We have pretty much tapped out the English speaking nations of the world in our recruitment efforts — including the Irish, British and, more recently, South African. We have many fine physicians in this country as a result of that. Some of us have a bit of a moral qualm what we might have done to the countries that they have left.

I would absolutely go for the easy ground. I would go to places that are not well served. I would support adding non-physicians to physician groups. It is not about the right model; it is about moving the yardsticks. We have spent a long time looking for the perfect model for primary care reform. It has worked in some places largely because someone just had the will to do it.

Senator Fairbairn: Mr. Decter, if I have learned anything from the study that we have been undertaking, it is that in this area you cannot really tackle anything head-on by itself. There is no stand-alone; everything seems to be connected to something else that must be dealt with as well.

I have a great interest in literacy and how that factors in to just about everything. You are quite right in pulling out the Aboriginal health issue as one of enormous importance and enormous difficulty.

How would you reflect on one of the great barriers to bringing health into the Aboriginal community as being a culture issue? Do you see education and, indeed, fundamental literacy in many of those communities as important to pull those people into issues such as health concern? Very often, the processes that lead people to do better things in caring for themselves as well as make the connections to others to take better care may be lacking because of poor education. They may lack many of the necessary abilities.

Mr. Decter: That is extremely true. When you have communities that are enormously disadvantaged in broad socio- economic terms, our instinct to put in a health service that looks much like that which we have elsewhere is not always the right thing to do.

I remember vividly an experience as a young public servant in Manitoba going up to Norway House, a large Aboriginal community that was suffering from repeated bouts of gastroenteritis. Many sick people were being taken out of the community. It turned out that the nursing station that had been built it to help the community had its sewage discharge running right into the water intake for the community. In a piece of extraordinary irony, the nursing station was the cause of much of the illness in the community. That was readily fixed. To me, it was a little symbolic of the effect of some of our efforts.

I do not take the view narrowly that it is about providing a southern style and quality of health service into those communities. It is a broader issue.

I would make an observation that might be controversial. In my experience, the Aboriginal leaders are far more willing to sacrifice the current generation for their children. They are very committed at the community level to their children having better prospects than they do. They would make a different set of health investments for the sake of their children than we might make looking at health issues in the community.

The most telling illustration that I have of that was in a community in Northern Ontario. As deputy minister of health, the chief invited me to visit. The Department of Community Services — our sister department in those days — had built a senior citizens' residence. No one had moved into it. It had been vandalized. That department had a very low opinion of the community. They urged me not to go because it was community that was bad and irresponsible.

I went there to visit with the chief and the council and to tour the community. I began to understand their view. When translated into Cree, what the senior's residence becomes ``place to go die.'' Their view was such that they did not want their elders in a building separate from their families and from the community.

When we reviewed the documents, we realized that for 15 years they have wanted a hockey arena for their kids to play hockey against the teams from the other communities. After a prolonged struggle, they got their hockey arena. I was struck with the fact that, although they were not necessarily the most articulate people with whom I have ever dealt, the elders were passionate in saying that it is all about the children — they want to do something for their children. It is instinct to do that. These are original citizens, and every group that has ever come to this country has wanted something better for their children than what they had as children.

When I talk about changing the life expectancy, it might be a generation. We might have to ask what it would take for the children being born now. This goes right to the wonderful investment in early childhood development and my enormous respect for Mr. Fraser Mustard for single-handedly campaigning for that for a long period of time.

Perhaps we need that focus within the Aboriginal community, which would bring with it huge challenges. Tackling this issue goes to population health issues, early childhood development issues and maybe more than issues of enormous medical sophistication. I would note that in some parts of Canada, a large percentage of the patients on end- stage renal dialysis are Aboriginal. We amputate far more limbs in the Aboriginal community for diabetes than elsewhere. It is not as though we are in a sense immune to the consequences of the ill health because we are facing those consequences.

I do not think that greater efficiency at those things is the answer. Rather, the answer lays way back in the early years and the surrounding conditions.

Senator Fairbairn: The notion of having a special minister of Aboriginal health is an interesting idea. To bring people comfortably to the services being offered, there would have to be an adult education area of that ministry, not just an early childhood development area.

Mr. Decter: Yes.

Senator Fairbairn: It is so tough and I thank you for focusing on it.

Mr. Decter: The literacy issue is huge. When I was Deputy Minister of Health for Ontario, we made an agreement with the national Aboriginal organization to share information. They had an excellent staffer who was extremely knowledgeable about issues of Aboriginal health and particularly about diabetes. Mr. Ovide Mercredi and I came to an arrangement that each of us would pay one-half of her salary. She also helped us to translate. We had 105 diabetes education centres in Southern Ontario and almost none in Northern Ontario. Yet, it was an epidemic in the north. For the first time, some of the materials were translated into Aboriginal languages and so the education process actually began. Efforts of doctors at Mount Sinai Hospital have had some major pay-offs, although I have not been back to look at it. A great deal of it is not new knowledge, but rather just doing the things that work in Ottawa or Toronto and finding a way to translate them so that they are communicated and understood.

Senator Morin: Thank you. I have a number of questions. Sustainable funding is a crucial issue. Government revenues are so dependent on economic cycles. What is your answer to the fact that we have regular economic downturns? What should we do at those times to ensure stable funding? I realize that you said to take part of it. However, should we allow deficit funding, as we did in the early 1990s, or should we cut other programs, as we have done recently? It is difficult to maintain stable funding when revenues are not stable.

My next question is about primary care, which is a difficult issue. After all these years, there has not been much progress in Ontario despite the fact that the Sinclair report was excellent and so detailed. There are many factors involved here. As you said, there is some inertia exhibited and there is the fear that physicians will become bureaucrats within a civil service.

I read the Sinclair report carefully and I could not find any information about who would actually direct the activities of the primary care team. I asked Dr. Sinclair who controls the team or manages the activities. He said that information was not in the report even though it is a crucial issue. This is really the crux of the problem.

The CLSC — le centre local de services communautaires — issue was discussed and we heard horror stories about it when we were in Montreal. There was a series of articles in La Presse that made interesting reading for physicians who had worked in CLSC. They had been forced to attend meetings for days on end. One person described her usual week as being one-half day of clinical work and the balance for meetings and report writing. It was a real impediment to performing clinical work in the facilities. There was no secretarial help for the physicians who had to book their appointments themselves and perform the other necessary clerical work.

There is a danger of that occurring again and you know the civil service. You have been around enough to know that there are managers, assistant managers, personnel directors, financial directors, and then there is the poor individual at the bottom of the ladder doing all of the work. There is certainly a problem with such a set-up and this must be considered.

Concerning Aboriginal health, I am pleased that you will have studies. Health Canada was here discussing the health of Aboriginal people. Perhaps you could have those figures for me so that we could compare the information. Isolated rural communities are in bad shape. They have diabetes and life expectancy is low, et cetera. How do our isolated Aboriginal reserves compare with other isolated rural communities? We may be surprised to find that there is not much difference. The greatest factor may simply be that they are isolated rural communities.

Coming back to the minister of health, there is a big difference between health protection and health promotion and the delivery of health care. Delivery of health care is important, but I do not think it really affects the indicators such as life expectancy. In our report, we recommended that health care delivery be sent to the provinces. Actually, it should be sent to the regions. That is the best and most effective way to deliver health care services — close to the people, including First Nations.

A huge effort needs to be made in the area of health promotion. The issue of fetal alcohol syndrome is a catastrophe. The majority of Aboriginal women still drink heavily when they are pregnant. I saw recent figures on that. The Aboriginal population has the highest smoking rate in the world — 72 per cent. There is no other group of people in the world with such statistics. This really is the problem, and a strong effort needs to be made.

Finally, electronic records are very important. Wherever this has been initiated right now, privacy concerns have stopped the evolution. In Quebec, as you know, the smart card is now in trouble because of privacy concerns. I am not saying that these are not legitimate concerns. However, they are an impediment to the development of these things. A recent poll in Quebec showed that 60 per cent of the population would not want to have their health information on a smart card.

Here in Ontario, you have the primary care network where a number of experimental primary care teams that had information. This was hit really hard recently. I do not know if you have a privacy commissioner in Ontario.

Mr. Decter: Yes.

Senator Morin: They said it was unsafe. You know the stand of the Privacy Commissioner in B.C. These privacy concerns, which up to a certain point are legitimate, prevent us from moving into that area.

Mr. Decter: Let me try to respond to the five points.

With respect to the electronic health record, I do worry. I have responsibility as chair of CIHI for ensuring that our privacy protections are as good as any and meet the standards. Through that, I have had occasion to meet with not only the federal Privacy Commissioner but also many of the provincial privacy commissioners.

It is almost a risk to one's continuing survival at any point to suggest that privacy should not be an overwhelming concern, so I will be careful. I think there is a balance here between the use of information to manage the health system and to look after the health of individual people and privacy. While we all hold out privacy to be a very important attribute of the health system, I think those views change when you say to someone, ``If the choice is between having absolute privacy and having information that could safe the life of your child or your mother, there is a balance here.''

It is not as though paper records somehow guarantee privacy. We read and have read for decades about doctors who retire and their records end up in a dumpster. There are many breaches of privacy with paper records.

The issue gets raised any time we try to move something into the electronic sphere. When we automated the Ontario Drug Benefit Program and linked the 2,500 pharmacies together, I went to cabinet in Ontario at three or four times on the privacy issue. It was the single most major issue.

Among the concerns were, ``If my record is electronic for drugs and I have HIV/AIDS, then the pharmacist in my community will know that, and it could violate my privacy.'' This was put forward as a reason not to link the pharmacies together. If you think about it, if you have a prescription filled and it is hand-written, pharmacists would have exactly the same knowledge.

There is a tendency to associate the fear of a loss of privacy with this change. There are parts of the country where the real issue is who owns the medical record. Is the medical record owned by the physician? Is it owned by the patient? Is it owned by the payer? Or is it some combination? The issue you end up debating is an issue of privacy.

Privacy is very important, but so is managing the health system. There are two very important techniques for allowing health data to move. One is prior consent. For things like the Joint Replacement Registry, we are obtaining patient consent for the data and all of its use. The other is to de-identify the data. For management purposes, you do not need to know who had heart disease, but you do need to know how many people had heart disease and what age and so on. That is a manageable issue. You are right that it can be a barrier.

I will be pleased to come back to you on the Aboriginal health versus health of people in isolated and remote communities. My own guess is that both are elements. However, let me get some real data before I speculate on that.

I think you describe eloquently the fear that physicians have of ending up in a bureaucratized system. We should try to avoid that. When I say ``multidisciplinary primary care,'' I am not sure that my mental image of that is that there actually is a manager. It may be simply an office in which, instead of there being one physician and a nurse, there are several physicians, a nurse practitioner and some other professionals. As professionals, people are quite capable of referring patients from one to another without there necessarily being a heavy management structure or a lot of time spent in meetings.

Some of the community health centres in Ontario — perhaps many of them — come more from a community services culture where meetings are more like the world of the social worker versus the world of the physician. The world of the social worker is much more meeting intensive and coordination intensive. I am not saying one is better than the other. However, if you try to move physicians into that culture, you have some real issues. I do think you want to maximize time with patients in the structure.

On stable funding, yes, we will continue to have economic cycles. I am reasonably sure we have made progress in managing their severity. I had the privilege of hearing David Dodge speak at Queen's University on Friday night on 30 years of fiscal and monetary policy. He succeeded in convincing me, as has Alan Greenspan, that we have made progress in being able to successfully not eliminate the business cycle but certainly dampen the most severe aspects of it.

Where does that take me on health funding? We could have a corridor for health spending that guarantees the deliverers of service a certain base-level and puts them a little at risk at the margin. Other people manage that way.

We should have more of an expectation of productivity improvement in the health system than we have had historically. In the 1990s, we squeezed the system and said there must be some productivity gains, and there were. However, productivity is often achieved by investing in innovation and new techniques and new technologies. In my view, that has been missing in the health system. We have not had the same commitment to capital spending, a commitment to buy the people doing the work the tools they need to do the job.

An uncle of mine is retiring after 35 years as a paediatric urological surgeon in Winnipeg. He spent 20 of those years campaigning to get a new operating table that would allow him to do his work better. I think he got it two years before he retired. It was one of the longest standing fights that I can remember. It was not that much money. At one point, I was thinking we could pass the hat and buy it for him.

We have scrimped on capital equipment and capital investment in the system, which has hampered productivity. If we had a corridor of funding, more capital investment would allow people to achieve some of these things. There are very few people in health who, if you asked them ``Is there a better way of doing this,'' would not be able to say, ``Yes, there is, but I need this or that to be able to achieve it.'' In other sectors, we routinely make those investments. In health, it has been an uphill struggle to get there.

I have tried to cover your questions. I have a feeling I missed one.

Senator Morin: No, that was it.

Senator Callbeck: Mr. Decter, I want to ask you some general questions about prescription drug coverage.

Before I do that, I want to ask a couple of things about the report that was put out by the Canadian Institute for Health Information. I have the summary report from the Internet. According to that report, there is a tremendous difference in the cost of prescription drugs per capita. For example, it is 25 per cent to 30 per cent higher in Prince Edward Island and Nova Scotia than in the western provinces, Manitoba, Saskatchewan and, I believe, British Columbia. Is there an explanation for that? Did the report go into that?

Mr. Decter: I do not think it did. As chairman, I should be careful. We have 45 databases, and we put out a report a week. I am the volunteer chair of the board, and while I try to keep on top of matters, I will be a little circumspect in my answer.

Our role is to gather and publish the data and to make it available to people to better manage and understand the health system. We do some analysis, but we are, I think understandably, careful about stopping short of drawing policy implications. Our credibility is a little like Statistics Canada: As long as Statistics Canada is telling you how many people are unemployed, who they are and where they are, they are credible. The minute they take a view that unemployment is too high or too low, the government of the day might find them beyond their mandate.

I do not know if the figures you are quoting are for the actual cost of the drugs or per capita spending.

Senator Callbeck: Per capita spending on drugs.

Mr. Decter: Much of that is driven by drug plan design and coverage. For example, the Ontario Drug Benefit plan, for many years before they put in a co-payment, basically paid for all of the drugs for people over the age of 65. There was a very sharp jump, from age 64 to age 65, in the number of prescriptions, understandably, because people suddenly had coverage that they did not have at age 64. Other provinces have structured their plans differently. My old home province of Manitoba has a more universal coverage but very high cost-sharing — co-payments and deductibles. You pay the first couple of hundred dollars yourself, which tends to have an impact.

It is likely a combination of those factors that drives the different levels of spending. Generally, the rule would be: The better the coverage, the higher the level of spending. Ontario has a policy of generic substitution in its plan, which has a bit of a push going the other way.

One of the embarrassing things nationally is that we do not have more equal coverage for medications across the country. We have the lowest public sector commitment to coverage among all of the OECD nations. Essentially, we have in drug coverage what the Americans have in their health system in general. In other words, we have a public role. We pay for drugs in many parts of the country for people who are old or poor. We let employers pay for their employees, if the employers are strong enough to bear that burden. Our larger companies and unionized companies tend to pay. A lot of our small businesses cannot afford to or do not pay. We let a considerable portion of the burden fall on individuals.

I am not opposed to having some portion of the burden fall on individuals for drugs. Unlike other areas of heath care, you actually have someone actively marketing drugs. To have a bit of a financial pushback on the individual is, in my view, not a terrible thing. The problem is that it is uneven across the country. A senior in Ontario will face a very small bill for medications; a senior in Newfoundland will face a very large bill. This is inherently wrong.

The spirit of your report suggests that we keep a mixed model for the non-hospital, non-doctor insurance coverage. I am not inherently opposed to that. I just wish we had a scheme that allowed that coverage to be fairer to let me believe that no one is deterred from needed medications by a financial barrier.

I was in favour of putting a small co-payment on the Ontario plan. It was not a popular view in the era I was in government. I believe I had the premier's support but no-one else's, including my own ministers. We would be better off having really good national drug coverage and have, for example, premiums to pay for it, rather than having this patchwork quilt that we now have.

To get from where we are to where I would like us to be is extremely hard given that each province has a different scheme and they have different views of policy. There is the emergence of some cooperation among the provinces and Government of Canada on at least harmonizing. Perhaps the first step is to harmonize the rules and approaches and move to better coverage later. We have extremely uneven coverage across the country.

Senator Callbeck: Yes, we certainly do. That is a real concern of mine, too. The figure of Prince Edward Island was very interesting to me, that it is 25 to 30 per cent above the other provinces. We really do not have what I would call a very extensive drug plan. I personally know of a situation where a woman is on a life-maintaining drug. She must take it. The net cost to the family is over $50,000 a year. That is the net cost after insurance. I am told that that particular drug is covered in some way in other provinces. I certainly share your concern about the differences in coverage.

Mr. Decter: I would be happy to take it up with our technical folks at CIHI and provide you with an explanation of why the numbers vary that much. I do not know.

Senator Callbeck: I was going to ask how we get to a fairer scheme, but you have pretty well answered that.

Mr. Decter: We can, but not without great difficulty. It is a bit of an affront to the basic principle that there should not be a financial barrier to needed care if someone is paying $50,000 for a drug that is of benefit to him or her. I think that is wrong. I have less trouble with the notion that someone might pay the first $2 or $5 or $10 than I would with the idea that there is a medication that could change someone's life for the better or save their life and that we have not gotten around to paying for it. We will have more of those drugs come down the pipeline, very expensive drugs that are very beneficial to some patients.

One of our challenges is how to make sure the right drugs are getting to the patients, which at the moment is something we are not very good at. We under-prescribe in some way cases and over-prescribe in others. That is an issue this that needs tackling both from a safety and equity point of view.

Senator Callbeck: You mentioned that we should start by harmonizing schemes and approaches. Are you suggesting the federal government should take the lead on this?

Mr. Decter: In the accord of 2000, the First Ministers agreed to get their health ministers to work together on this. I understand work is ongoing. The federal government is playing an important role in those discussions. It has a considerable drug bill for Aboriginal people, veterans and the Armed Forces.

I have been working with Mr. Hugh Segal at the Institute for Research on Public Policy to put together a forum in September, potentially with people from the United Kingdom and Australia. In the U.K, everything in health is national. Australia is more like us in being a federation. There are some lessons to be learned from other jurisdictions in this regard.

I do not think there is an ability to do a national plan, as the political will is not likely to be there. There is the possibility to harmonize the levels of coverage over time, and perhaps for the federal government to make a contribution specifically towards improving the level of coverage.

Senator Robertson: I want to go back to the arm's-length management comment you started with. I find what you said quite interesting because some of us have puzzled over this, and a couple of our witnesses are very much in favour of arm's-length management.

If you do not have arm's-length management, how do you resolve the issue of the lack of continuity that raises its ugly head every time there is an election in a province? Sometimes the change goes smoothly, but often there are so many dramatic changes that the system is shaken quite badly and it seems difficult for the public to respond. There is great suspicion that there is not a good methodology of funding or a lack of accountability. I would like your opinion on that. If arm's-length does not work, what will? Is there another model that you have studied or worked on that is better?

You made a comment about bribery in some instances to get the medical profession to cooperate. Carrots also work.

When it comes to service-based funding, if I understood you correctly, we remove the hotel costs and that funding would be in the actual delivery of the health care in the hotel-type hospital. If that is true, from the information that you have in the private management of hospitals, of which we have examples, is it just as important to have efficiency in your hotel costs as it is to monitor the efficiency of the medical procedures and the medical care?

Regardless of what we do in our sixth report, after we have looked at and found agreement on how to deliver those services, one of the last things that will dog us to our graves will be how do we raise the additional funds that are obviously needed when we have done everything else? It seems to me we will be in need of additional funds.

Mr. Decter: Let me start on where will we get the additional money. Obviously, you will not. The elected government will have to decide whether it wants to do that. I am of the view — probably an unpopular view in some quarters — that the courage of previous governments in implementing the GST provides a good ongoing source of revenue for the Government of Canada. One might even consider whether the population would bear an additional point or two on that in return for funding into health care. It would certainly sharpen the focus of the debate. The good thing is senators do not get elected, so you could probably propose it.

There are examples. The Ministry of Finance hates the idea of a dedicated revenue source for a particular use. This goes right to the core of what they think is dark and evil in the world. I listened to Tom Axworthy make an eloquent case for why cities need different funding than we currently give them. I would put health care above cities in that having them entirely dependent on the current funding base is not a good idea.

The Germans fund some parts of their health system in a way similar to our employment insurance. They run a levy on employers and employees, and they achieve that voluntarily. Something even more unpopular than a couple of points on the GST would be negotiating a premium tax with the leadership of the labour movement. That would drive everyone wild as a job killer.

Within the system, I do not know why multi-year funding agreements would offend the ritual of voting budget estimates from year to year. CIHI has three-year funding agreements with the provinces. We also get money from the federal government. We use multi-year funding methodology to give us predictability and stability, and to tide us through those times when there are changes in provincial governments. We also stagger them so we are not negotiating with all the provinces at the same time. I do not know why we would not look at some form of multi-year funding agreement with regions or hospitals. Is it so far beyond our capacity to design something of a multi-year nature with the right accountabilities?

Second, I am not sure the right split is services and hotel costs. There is a cost to a hospital simply being there — and maybe it is the hotel cost. It should be as efficient as it can be. I think the criteria you apply may be slightly different. There are criteria about costs per square foot that you would not apply to patient care, whereas on the clinical services you want a mix of measures of outcome and resource consumption. Many of those have evolved.

On arm's-length management, we have been willing to have arm's-length agencies in a couple of circumstances. For example, it is a given for regulatory purposes. Where we have a pot of money, we want someone to divide it up. This may antagonize the Auditor General, but there is an acceptance that if the government is committing a one-time allocation of money, by putting it at arm's-length you could have experts decide who to give it to. You might get a better result than leaving it inside the political electoral world.

Difficulties arise when you have to vote the money annually, like the health budget. Handing it off to someone at arm's-length is somewhat troubling. If you were to take either of the two ideas I put up and flow that money into a federal pot for the modernization of Canadian medicare, could you put that at arm's-length and have someone direct the spending of it within a certain policy? I think you could probably do that. Certainly, there would be a battle with the department of finance, who would think it horrific in terms of their general approach to the nation's finances. I worry about that somewhat in areas different from health because you do run risks. For example, by putting the whole gas tax into highways, one might end up with more gasoline tax than you need highways. I do not think we are likely to run out of reasonable things to spend money on in the health system, if we are careful about it. It could have a sunset clause of some number of years.

If you were to compare — this will be a bold and unsustainable assertion at the moment — how well some of the arm's length groups have invested, I would think the Innovation Foundation, headed by John Evans, for whom I have enormous admiration, has done a very thorough and thoughtful job of spending those dollars. I am less certain of the billion dollars for technology in the health system that flowed through the accord. I have only Lisa Priest's assertion that some lawn mowers may have been purchased in a province, and while lawn mowers are important technology, I think we were expecting MRIs and diagnostics, not lawn mowers. There is that kind of case.

It is more problematic at a provincial level to contemplate putting the health budget on an arm's length agency. If you had multi-year funding agreements, and if those agreements required the policy input of the government to shape them, you might be able to get there.

The goal is laudable. The biggest problem is not the cutting, in my view. The problem is the stopping, for example, when the new minister decides to put everything on hold, years of people's work, while it is reviewed. It takes 15 or 20 years to get a new hospital built. By the time you build it, it is the wrong size because it took so long, and no one wants to compromise on size in the later stages. It is just not fast enough for the world we are in.

Senator Cordy: With respect to the issue of accountability, I too read about the funding given by the federal government and the accord in the fall of 2000, where one of the provinces bought lawn mowers. While that would technically be equipment, I am not sure that it was in the minds of the federal government or of the general public that that would be the machinery that was purchased.

Many witnesses appeared before us who talked about accountability or lack of accountability for dollars that are being given to the provinces. Some witnesses said that the funding seems to go into a black hole. Again, going back to the large amounts of dollars that were given in the fall of 2000 that were for equipment in the hospitals, many people are saying they do not see any evidence of large amounts of money being spent on equipment in their provinces.

Witnesses also suggested that for accountability they would prefer targeted funding instead of block funding. Again, this money in the fall of 2000 was, in fact, targeted and still people feel that it has not been accountable.

With respect to timely access to the health care system and waiting lists, I know last year in Nova Scotia there was a nurses' strike that caused a back-up in heart surgery. The CEO, Bob Smith, announced to the newspapers that if people were not receiving their heart surgery in a timely manner, they would be sent to another province to receive it. There was a lot of scurrying. It was never addressed in the media. I am not sure whether he was chastised for saying it or whether those people were sent to other provinces.

People from Sweden said their waiting lists are published on the Internet. People can go to the Internet to see where they could get quicker service for whatever they happened to be waiting for.

My bottom line is this: How can we guarantee timely access within the system?

Mr. Decter: I believe Alberta is now putting wait times on the Internet for some procedures. The issue is wait times, not wait lists. Let me just separate those two.

Wait lists are often without definition, unless you are in something organized like the Ontario Cardiac Care Network where a wait list has some meaning in terms of definition. Wait times are what the public are rightly concerned about.

First of all, transparency is important. Making those wait times visible is a way of shaping policy and shaping performance. I think they should be, as a routine matter, published. In the accord, the first ministers agreed that by September 2002, comparative data would be published. I will be intrigued to see if it is actually published.

The Chairman: So will we.

Mr. Decter: I like your proposal in volume 5 that maximum wait times should be established for procedures and that people should have the ability to travel to somewhere else if they cannot get treatment in their home provinces. That is happening now in a rough and informal way. It is supported by the reciprocal agreement that causes one province to pay another. I can speak from personal experience, having helped people get access to care by telling them to come to Toronto to see someone who can do their hip, knee or whatever in fewer than two years. There is, oddly, the architecture for this, although it is not tied at this time to standards for waiting. It is a good direction.

The system must be accountable. You cannot run a monopoly unless you are willing to make its performance transparent and you are willing to give people a mechanism to hold it accountable. Yes, the electorate can throw out a government that gets elected in a province by saying it will cut the wait times in half, and four years later it has not. That satisfies a broad democratic accountability. It does not help Joe Smith who needs his knee, hip or heart done. I think you need both.

I like your idea. There are some obvious challenges in structuring it so you do not cause excessive movement around the countryside, but there is a fairly big built-in incentive in the current arrangements for provinces to get their act together.

We have done more harm, in some instances, when we have been unwilling to have people travel. For example, there was the tragedy of the cardiovascular paediatric surgery in Winnipeg, where, in hindsight, there was too small a volume to have a program. Those babies should have been moved somewhere that did higher volume. There is a great deal of good work now on the relationship between quality and volume, particularly for complex procedures. If we communicated that, we could change some public attitudes.

Yes, we all want care close to home. Parse that, we want access to first-line care, primary care, close to home. I am not sure that many people want to have very major exotic surgery in their small community hospital. I think they understand that the more complicated it is, the farther they are likely to have to travel.

We need accountability. I worry about giving up the broad democratic accountability. We need to reinforce it with transparency and with indicators that are comparable. We need to have a check and balance at the individual level with service guarantees. That will take a while. There are some legitimate concerns about balancing what is measurable against what is important, that is, it is easy to measure wait times for procedural matters.

We must be careful that we do not lose sight of access to primary care as an important element of the health system. We would not want to whisk people around the country to have their hips, knees and so on done, while at the same time fail to provide routine care for infants, for example. That is harder to measure.

I like the idea that you have in volume 5. I do not think it is hard to operationalize. If you tried to do it for single procedure, it would be difficult. However, for some of the majors, I think it is doable. It would force a consolidation of some services into centres that could do it at a level of volume that would provide for better outcomes.

We are willing to travel significant distances in this country to see a hockey team or a baseball team. We should not be resistant to travelling when it is indicated as necessary to get a good outcome or an appropriately shorter wait-time.

Senator Keon: Some consolidations have occurred across the country. For example, the cost of hernia repairs has gone up by 60 per cent because the little hospitals where you could do a hernia for $1,000 were closed. The hernias had to go to a teaching hospital where it was costing up to $2,200 for the same operation. The list of examples goes on.

Mr. Mazankowski suggested first that we separate care providers and evaluators. We picked up on that.

I ended up looking into it and talking to some of my American friends. I am really convinced that we have to go that way. We have to get competition into provision and farm out things, or we are never going to control costs. This will open a can of worms because we may have a Shouldice Clinic in every city in Canada. What do you think of that?

Mr. Decter: I have a couple comments. First, Canada for the most part missed the emergence of lower cost structure surgery centres. Almost every other country put something of a clinic sort between the hospital and the physician's office.

We never developed a funding base for those, other than kind of haphazardly for some procedures that lent themselves to that. For radiology and abortions in Ontario, we funded clinics not largely on efficiency grounds but on grounds that they were easier to protect.

There is actually quite a good statute in the province, the Independent Health Facilities Act, which is a nice regulatory statute. It was brought in for radiology. I always thought it had broader application as a framework. It has a needs assessment, which is one of the things that get missed in this.

If you want to have competition, you have to worry about oversupply. That is the American experience. You have an MRI clinic on every corner and you have people with a hook dragging customers in. You can over-service a population. The Independent Health Facilities Act in Ontario has needs assessment requirement for the district health councils to determine if a clinic is needed.

Some competition would be quite helpful. We have this odd system now where we often move things into the high- cost environment of the hospital because we have been unwilling to provide incentives to keep them out. When the Americans tried to move to ambulatory care from DRGs, as I recall, they gave clinics 100 per cent of the DRG and hospitals only 85 per cent. Therefore, hospitals put all those things in a clinic.

This came home for me when it was explained to me in negotiations with the Ontario Medical Association that physicians would do vasectomies in-hospital because the set-up fee in their office caused them to lose $4.11. I did not think that was much money. They said if you do enough of them, it could turn out to be a lot of money.

If you are in the hospital paying the physician the fee for doing the work and the other costs are borne by the hospital budget, yet in the clinic setting the physician is bearing some portion of technical fees, you have created a slippery slope in the hospital. We created another one when we closed many small hospitals and centralized. The easy repair work that should stay locally and be done by a general surgeon ends up coming into the fancier, more expensive places.

The balancing piece to primary care reform is that we need to have an investment in non-bedded clinics. I do not know that they have to be either public or private. The minister was offended when she found out that the Shouldice Clinic was private. I said that there was a really good reason we were not going to touch it because it works very well. At some point, we must suspend ideology and go with what works.

Am intriguing example the other way is the Pan Am Clinic in Winnipeg, which have been a very successful orthopaedic clinic It is a private clinic just as an accident of its history. The government at enormous cost is acquiring it because it is offensive to that particular government that it is private.

I am not offended whether a clinic is private or public as long as the work gets done and efficient. I have no problem if a hospital says it wants want to set up a clinic. I do think that we should have a funding model that gives incentives to do things in a lower cost environment, if they can be safely and effectively be done there.

It is a huge missing piece in Canada. We are still using modified hospital environments to do things that could be done in a properly funded surgery centre. There are some remarkable examples. If you want to have fun, go to the Loyola University in Chicago and see the Mulcahy Outpatient Center. Walk through the adjacent hospital. You will find it spooky because when you walk through the hospital, there are no ambulatory patients. That hospital is the fifth highest intensity hospital in the U.S. It would probably be an intensive care ward here.

That surgery centre, which has tripled in size over the years, does an amazing amount of stuff for which we would hospitalize. They do it on a day basis. They open at 6:00 in the morning and close at 6:00 at night. If someone needs to be transferred to the hospital, they are transferred. The vast majority of their patients go home the same day. It is very cost-effective. It is a much lighter structure to run. You do not have 24-hour a day cost structure.

You need a regulatory framework. You need something like the Independent Health Facilities Act. You need a needs test.

If physicians can do vasectomies in their offices and get as good a result as doing them at the hospital, why do you want to slide these things into that setting? Some of the successful regions out west are contracting a great deal of service to providers, whether it is groups of physicians or clinics. That can be very beneficial to loosen up the system and get better value for the dollar.

The Chairman: Thank you on behalf of all of us. That was wonderful.

The committee adjourned.