Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue 65 - Evidence
OTTAWA, Monday, June 17, 2002
The Standing Senate Committee on Social Affairs, Science and Technology met this day at 12:27 p.m. to examine the state of the health care system in Canada
Senator Michael Kirby (Chairman) in the Chair.
[English]
The Chairman: We have two sets of witnesses this afternoon. We will ask our first panel to make opening comments, and then we will ask questions to the panel as a whole. Please proceed.
Ms Cheryl Hansen, Director, Extra-Mural Program, Department of Health and Wellness, Government of New Brunswick: Honourable senators, I am pleased to be here representing the New Brunswick Extra-Mural Program.
In 1979, an interdepartmental committee recommended to the New Brunswick Department of Health that a new health system component was required to manage the forecast changes in the population and to address the heavy utilization of hospital beds. As a result, a new entity, the extramural hospital, which is now called the Extra-Mural Program, or EMP, was formed with a broad mandate to provide an alternative to hospital and nursing home care.
The New Brunswick Extra-Mural Program accepted its first clients in 1981. Over the following 12 years, the program has been phased in throughout the province. Today we cover every area in the province, both rural and urban.
EMP was launched with a budget of $250,000. This year, the provincial estimates budget for the program is over $40 million. Total expenses for the program in 2001-02 were over $39 million. Our spending on home health care in the province is approximately $53 per capita.
Overall, the total EMP expenses are approximately 4.2 per cent of the total RHA expenses and our regional health authorities are responsible for hospitals, home care and addiction services. They also represent about 3 per cent of the total Department of Health and Wellness budget.
Home health care is a legitimate component of the New Brunswick health care system. It has its own role to play, a role that is on par with ambulatory and institutional care. It is not simply a service to facilitate in-patient discharge for the convenience of hospitals. Approximately 55 per cent of our acute care clients are admitted directly from the community. This demonstrates that EMP is an acceptable option for the delivery of care, and that for many clients it is the first choice and the optimal location for care.
The mandate of the Extra-Mural Program has broadened since 1981, but still encompasses the early service mandate, which is a true testament to the founders of the program. The program provides a comprehensive range of coordinated health care services for individuals of all ages for the purpose of promoting, maintaining and restoring their health. We also provide palliative care services to support quality end-of-life care with individuals with progressive life-threatening illnesses. We accomplish this by the provision of professional services that include nursing, occupational therapy, physiotherapy, speech language pathology, respiratory therapy, social work and clinical nutrition.
Physicians are essential team members and play a critical role in the delivery of our service. Our physicians are remunerated on a fee-for-service basis for services provided to home care clients, which may include home visits and telephone consultations.
EMP nursing services are provided twenty-four hours a day, 365-days a year through actual nursing shifts or, at a minimum, on-call service. We deliver a myriad of services that include, but are not limited to, acute care services, palliative care, long-term care, a home oxygen program, rehabilitation services, as well as long-term care support assessment.
Clients who are accepted for our services receive the necessary drugs and supplies to support the intervention that is required based on the reason of referral to the program. All services are delivered according to provincial, evidence- based, clinical policy and procedures to ensure the provision of consistent home health care services no matter where you are in the province.
We collaborate with a variety of other community stakeholders, recognizing that community care requires a multifaceted approach. A key partner in the delivery of home care is the Department of Family and Community Services. They are responsible for and also fund the long-term home care support component of home care in our province.
Combined with the Extra-Mural Program, per capita expenses for the provision of the home health care and home long-term support services in 2000-01 was $135 per capita.
Today, the Extra-Mural Program has over 640 full-time equivalent positions in the province. In 2000-01, close to 20,000 clients were admitted to our program and we delivered over 400,000 visits. Provincial indicators reveal that the average cost per nursing workload unit, which is one minute, is approximately $1.14, an equivalent amount is there for therapeutics, as well. The provincial average admission rate to our program is 26.19 admissions per thousand.
As in other jurisdictions and provinces, the majority of our consumers are seniors. Approximately 62 per cent of our clients are over the age of 65; 20 per cent are over the age of 85.
Eleven per cent of our clients are children and adolescents and 27 per cent are adults. At any time, between 50 per cent and60 per cent of the EMP total caseload is for acute care services or is the acute care replacement and substitution function of hospitals. Approximately 5 per cent of our caseload at any time is receiving palliative care services.
The program has experienced many challenges and changes over the last 20 years. The strong foundation built at the outset has enabled the program to grow and flourish. Over the past several years, we have experienced an increase in the demand for acute care services. This has resulted from many factors, but most importantly it has resulted from planning. We have strong network and collaboration between the hospital and the community.
We feel that home care should not be seen as an option only to be considered when beds are closing, or when there is a hospital nursing shortage. Service needs to be coordinated on an ongoing basis, and the focus needs to be on the client and the efficient and effective delivery of services. We need to address the client needs as they move through the system.
The expansion of our program has been facilitated from the tremendous support we receive from all stakeholders, the general public and physicians. However, even with the strong support of the program, we are constantly faced with educating the public regarding the role of home health care. We have to inform people of what services we can deliver and, most importantly, what services we cannot deliver.
We are constantly guarding against the assumption that if something can be done at home, it should and must be done at home. This is not sufficient justification for us, because many times it ignores the complex factors found in the home environment. We must ascertain whether the home is suitable for the service; if it is safe for both the client and service provider; and, if there is or is not the presence of a support network. We have been fortunate because our program allows EMP management to refuse clients if the eligibility criteria are not met.
A misconception persists that home care is cheap care. Home health care is not cheap care, it is not second-class care; it is first class care that is appropriate to the needs of the client and family. For example, maintaining a dying individual at home can be very expensive. However, many, unfortunately, promote home health care as a panacea to health care problems, exaggerating the bottom line benefits rather than focusing on home care as the appropriate location for service delivery with the appropriate client.
In regards to the provision of acute care services in the home, I wish to stress the importance of an adequate home support system for short-term needs. The acute care substitute function of home care requires a comprehensive team working collaboratively to meet the needs of the client family. An essential component is appropriate short-term home support services. The requirement for this is often overlooked as it is assumed that the informal support system will address these needs. In many cases, this support is inadequate or nonexistent. This provision will need to be addressed in order for the replacement substitute function of home care to occur in a fashion that ensures quality service for the client and family.
The New Brunswick Extra-Mural Program is an identifiable component of a comprehensive continuum of care in our province. This component broadens the options available to service providers, clients and their families. We feel that the program has reached maturity, but not finality. It remains adaptable and embraces ongoing change and challenges in an effort to contribute to a sustainable health care system in our province.
Mr. Peter Coyte, Co-Director, Home and Community Care Evaluation and Research Centre, University of Toronto: Home care represents a complex array of services to diverse recipients. Some receive home care to prevent or retard the depreciation of health and to maintain independence, while others receive rehabilitation following hospitalization.
In the past 20 years, there has been dramatic growth in home care expenditures. This growth may be attributed to five major factors: Increased beneficiary eligibility, generally produced by individual provincial governments; increased access to such care, once eligible; significant demographic change; unparalleled technological change that has helped to mediate health care delivery; and, health care restructuring.
The policy assumptions emphasizing home care have been based upon three critical assumptions: Canadians want to assume greater responsibility for care delivered at home; housing and employment circumstances permit the shift of safe and effective care to the home; and, home care is cost effective.
I argue that we are far from having compelling evidence on any of these three critical assumptions that are driving policy change.
With respect to the home care industry, public sector home care expenditures have increased rapidly in the last 20 years. However, the rate of growth of such expenditures has slowed dramatically in the last 10 years. Annual rates of growth were 17 per cent per annum throughout the 1980s, while only 10 per cent per annum through the 1990s. In contrast to public home care expenditure private home care expenditure has increased even more dramatically, growing from 9 per cent per annum in the 1980s to 13 per cent in the 1990s. There seems to be a very clear crowding out of public expenditure and private expenditure where public expenditure's rate of growth has slowed, private expenditure has increased to take up that slack.
As a result of these differential growth rates, the private share of total spending fell during the 1980s but increased in the 1990s. In the year 2000 private expenditures accounted for one in five home care expenditures for this $3.5 billion industry.
Home care is no longer the preserve of the elderly. In Ontario, 45 per cent of home care recipients are under 65 years of age. In New Brunswick the number is 37 per cent. Some 15 per cent of home care clients are children.
There are two distinct types of clients: Clients who receive home care for a short period of time, generally up to about 13 weeks; and, clients who receive care on an ongoing or continuous basis.
Short-term clients receive approximately two-thirds of their services from nurses. The remaining services are almost evenly divided between personal support and other therapies. For continuing care clients, about 60 per cent of their services are of a personal support nature and, almost all of the remainder of their services are from nurses. Approximately 60 per cent of clients are short-term clients while the remaining 40 per cent require continuing care.
There are large interprovincial variations in per capita home care expenditures that persist even after adjusting for the demographic composition of the population. The magnitude of such an expenditure variation is almost fourfold between the large expenditure provinces, such as New Brunswick, compared with the low expenditure provinces, such as P.E.I. and Quebec.
Obviously, the federal government has an important role, not only to highlight these expenditures, but also to assist in rectifying such variations to ensure that all Canadians, irrespective of where they reside, have reasonable access to equivalent funding.
Elsewhere, I have developed national estimates for a home care program at benchmark levels that would entail increased funding in the amount of $1.5 billion.
While I have offered such expenditures for the cost of a national program, I am not calling for a parallel publicly- funded program. I want to stress that health care in the 21st century consists of much more than institutional settings and stethoscopes. It is much more than one privileged setting, in this case hospitals, and one privileged provider, in this case physicians.
Today, health care is sought, delivered and received in geographically dispersed settings, something that has been missed in current writings on health care and in discussions around health reform.
The sampling of health care from many different settings is the dominant characteristic of the new health care order. The Canada Health Act is outdated because it does not reflect the reality of health care in Canada and it reflects only a minority of publicly funded or even privately funded health care services. Health care services captured under the Canada Health Act reflect 45 per cent of total expenditure compared with the 55 per cent spent on settings outside of hospitals or on providers beyond physicians.
Rather than focus on medically necessary hospital and physician care, we need to focus upon necessary health care. We need to expand the principle of comprehensiveness that is embedded in the Canada Health Act, as the setting for care delivery should be irrelevant to whether necessary health care is publicly funded.
The discussion of home care as a substitute for acute or institutional care is misplaced. That discussion forces a bifurcation between entrenched interests of medicare and those in home and community care. A more powerful visioning of health care for the 21st century may be gleaned by viewing home care as a complement to care sort delivered and received in other settings. In this way, the home is but one component of a network of settings that may be reconfigured for different underlying conditions, for care recipients at different stages in their life course, and when the context of care giving changes.
I urge you not to recommend the development of yet another separate parallel program, another silo, aimed to provide incentives to the provinces for service integration. Consider integrating post acute and short-term care within the hospital-funding envelope, and to integrate continuing care funding with primary care groups. Such funding and organizational changes may offer opportunities to enhance service effectiveness, both in terms of the continuity of care as well as their cost effectiveness, and should be coupled with ongoing monitoring activities, provincially and federally, to ensure the advancement of various degrees of equity objectives.
One simple way of dealing with the potential government liabilities with respect to post-acute care is to use capitation-based reimbursement arrangements for hospitals or the services that may be contracted out from hospitals that are on the outlines of major clinical groups or equivalent day procedure groups. The potential for outsourcing such care following hospitalization and the reimbursement to providers on a capitated, unlike fee-for-service basis, provides the best opportunity not only for cost-effective care but also for the advancement of various degrees of equity objectives. There are significant opportunities in using the economies of scale that hospitals have for post-acute care and the potential economies of scale that may occur through allocating care for continuing care to primary care providers.
Mr. Marcus Hollander, President, Hollander Analytical Services: I would also like to add that I am the co-director of the national evaluation of the cost effectiveness of home care, which some of you may have heard about. I have provided to the clerk and the research staff the materials that are listed at the back of the reference section. The committee will have the full details, as I will be speaking about a number of reports today.
It appears that the needs of hundreds of thousands of Canadians with ongoing care requirements; children with special needs; people with chronic mental health needs; people with disabilities; and the elderly with functional deficits, are not being adequately addressed in current health policy discussions.
If the statistics were available, we would find that the public cost of caring for people with ongoing care requirements could begin to rival public expenditures on physicians and would exceed public expenditures on drugs.
Continuing community care, which includes home care, should be recognized as one of the key pillars of the Canadian health care system. The pillars we propose are preventative care, which is public and population health; primary care, which is medical care for the general population; ongoing care, which is continuing community care; and acute care. Drugs could be considered to be a type of intervention that applies to all four pillars, or as a fifth pillar.
Home and community-based services are not frills or boutique services; rather, they are key vehicles for improving the overall cost-effectiveness of the Canadian health care system. The framework for organizing service delivery systems for persons with ongoing care requirements found in the Third Way Report, presents a way to provide better care at a lower cost to people with ongoing care needs. It also provides a vehicle for reducing costs and improving the quality of care for the overall health care system in Canada.
The distinction must be made between curative services and care-related services. Curative interventions generally require care to be provided by medical and other health professionals and are generally the purview of doctors in hospitals. Care-related interventions are designed to reduce the rate of functional decline and/or to allow people with functional deficits to live at an optimal level for as long as possible. Care-based approaches use a psycho/social/medical model of care, which emphasizes supportive services. Supportive services, such as providing meals, a bath and taking the client shopping because the client is not able to perform these functions independently, are designed to assist people to function as normally as possible and are a significant factor in reducing and/or delaying admissions to hospitals and long-term care facilities.
People with ongoing care needs require medically necessary services to deal with their functional disabilities, but many of these services are supportive services. It is sometimes difficult for people who may equate health care with medical care to recognize that supportive services are a part of our health care system.
Mr. Coyte has mentioned that we need more research on the cost-effectiveness of home health care. That is certainly true. However, there are some interesting initial findings. With regard to the preventative function of home care, a recent study indicated that people who only received cleaning services and who were cut from home care had, three years later, increased health care costs of some $3,500 per person on average compared to similar persons who remained in care. This study demonstrates the cost-effectiveness of preventative home care and the cost-effectiveness of home support services. International research also seems to indicate that special targeted preventative programs for home care clients can be cost effective.
Recent research indicates that on average home care costs are 50 per cent to 75 per cent of the costs of residential care for clients with similar care needs. Given that outcomes in regard to quality of life and satisfaction with care are typically similar, home care can be a cost-effective substitute for residential care. The finding of cost-effectiveness relates to cost to government and to cost that includes the contributions in cash and in kind of clients and their family members.
With regard to home care and acute care, findings regarding the cost-effectiveness of home care compared to acute care remain mixed. While there are some studies that indicate cost-effectiveness, there are others that do not. This may be due to the lack of integration and/or coordination between home care and hospitals, in regard to systems and structures that facilitate the actual and effective substitution of home care services for hospital services.
Nevertheless, some evidence indicates that if one uses targeted programs to substitute home care for hospital care, cost-effective substitutions can occur. For example, a few years ago the Simon Fraser Health Region in B.C. closed 30 beds, thereby saving $2 million per year. They reinvested $1 million per year in a new model of home care-based discharge planning called Carelinks and had $1 million left over per year for other care-related improvements.
What about home care in the broader health care context? The focus on home care has certainly been welcome over the past several years. It now appears that home care is under fiscal pressure and is weak compared to other components of the health system. It may not be sustainable on its own in the long-term.
There are three possible options for home care: One is to reduce home care to a hospital outreach program; that is a hospital replacement substitution model. This would cause fragmentation and overlap, as many people who go to hospital are already long-term home care clients. Who would care for the people and how? Would it be the community- based home care staff or the hospital outreach staff? Also, people may live far away from the hospital that provides care. Who would then provide care for patients when they return home?
The other option is to merge home care into a broad definition of primary care. That option might enhance horizontal integration at the community level, but it would reduce vertical integration between the community, residential, and acute care services. It is this vertical integration that allows for more cost-effective substitutions.
The third option that we propose is to integrate home care into an upgraded model of continuing and community care. In the West and Atlantic Canada, home care has historically been linked to the broader notion of continuing care. The continuing and community care model provides for coordinated, horizontal and vertical integration and/or coordination across a wide range of services to best match, on an ongoing basis, the clients' care needs and care responses. It combines the best aspects of primary care and integrated health systems, and has strong links with other parts of the health care system.
There appears to be growing support for this approach within the continuing community care industry. This model is not an academic or theoretical model. It has real world precedents and builds on models that have actually been in place in the past.
There are a couple of key policy questions that this committee may wish to address. People with ongoing care needs are currently cared for through the health care system. Should this continue? If one decides to use a home care program that is linked to acute care services, that has a certain set of dynamics. One then must figure out what to do with all the other people who have been receiving home care and who need it on an ongoing basis.
Should we decide to reduce the scope of home care then we have some issues to address. What structures, mechanisms and forms of funding will replace what we now have for people with ongoing care requirements? Such a shift would move the most frail and needy in our society from at least a quasi-universal model of care to a residual welfare model and care would no longer be a right for all citizens.
Such a shift would also significantly reduce the cost-effectiveness of the health care system, as it would be much more difficult to substitute lower cost services, such as home care, for higher cost institutional services in a coordinated manner if services are in different ministries or different departments.
This speaks to the point that Mr. Coyte just made about further stovepipes and fragmentation. If people with ongoing care requirements remain in the health system, should continuing community care be fully recognized as a major pillar of our health care system? If so, which if any of the following steps should be taken? Should ministries of health or regional health authorities be encouraged to reorganize to have a senior official for continuing community care? Given the complexity of this sector, should there be a federal-provincial-territorial advisory committee on continuing community care? Given the lack of understanding of the size and scope of this sector, should the Canadian Institute for Health Information be asked to provide utilization and expenditure data for this sector in its reports? Finally, should continuing and community care services become insured health services through the Canada Health Act, a separate parallel act, or the social union mechanism?
New Brunswick's' expenses tower above the rest of the provinces. Is that because you have the extramural program or because of the way you keep the data? Can you explain why it is noticeably different than other provinces?
Ms Hansen: We have noticed that as well. From province to province taxes are collected differently. For example, the extramural program includes everything: the cost of drugs, supplies, administration, and, our fleet. In some provinces it may not include, for example, the cost of drugs. I am not sure whether Ontario's expenses include the cost of drugs in their home care program.
The Chairman: That may be included separately under pharmacare.
Ms Hansen: That is correct. I gave you all of the expenses associated with the program.
The Chairman: This committee has made it clear that it agrees with Mr. Coyte's observation that the setting of care is irrelevant. That is why we have always referred to Canada as having a national hospital and doctor program, not a national health care program. We have been trying to emphasize that the program should have been horizontally designed across the silos, rather than vertically designed within the silos. Nevertheless, we have to accept the practical reality that we are where we are.
How do we begin to breakdown the silos, while at the same time recognizing that we have to start from where we are, not from where we think we ought to be?
One idea we have been considering is that the setting of care is irrelevant, and, therefore, we should not consider a hospital to be a brick wall. It is also clear that progress in an area of this nature with its large dollar expenditure has to be made in baby steps. There cannot be a revolutionary change. The strategy ought to be to make the first baby step the one that makes the future steps easier.
How to begin to handle some home care costs in a way that would meet two criteria? First, it would be ring-fenced in the sense that what was included would be clear. Second, it would be justifiable in the sense that costs relate to things that would historically have been provided in hospitals but are no longer provided because they need not be.
Have you any thought as to how we can wrestle with that problem?
Mr. Coyte: I mentioned a solution at the end of my introductory remarks. The work that was done for the restructuring commission in Ontario five to six years ago —
The Chairman: Duncan Sinclair's commission.
Mr. Coyte: Yes, Wendy Young and I were charged to look at a small component of it. We recognized that the restructuring of the hospital sector required the need for some follow-up investment or reinvestment of funds in the home care sector.
We looked at conditions such as cardiovascular conditions, musculoskeletal conditions and so forth, from which patients went from the hospital into the community, and we followed up on those individuals. Most, as Mr. Hollander mentioned, would receive care prior to hospitalization on an ongoing basis after even 90 days. They represented only about 5 per cent of the clients. Remember, the vast majority of people who use hospitals are under 65 years of age.
Looking at those individuals using home care following their hospital stay, we looked at a 90-day period from the day of discharge, and for each of those major clinical groups, we added up the costs of home care that an individual received. For individuals diagnosed with something like AIDS, obviously, there were significant expenditures in the community thereafter.
The Chairman: After the 90 days?
Mr. Coyte: No, within the 90-day period. For individuals who received hospitalization because of a joint replacement procedure, either knee or hip replacement, the need for home care on average was at a cost of about $1,000. Immediately, based upon clinical criteria, you could identify a predefined capitated payment arrangement that would vary based upon the major reason for hospital admission and would then be able to cover nursing, rehab and support services once discharged. It would be a clinically based, condition-based method of doing that.
When we produced a report for the restructuring commission, one of the draft recommendations was that the reinvestment of funds might indeed be an add-on to a hospital budget, and the hospitals could thereby manage those funds because there would be a degree of flexibility to internalize any potential cost savings by reducing the need for in- patient beds, shortening the length of stay, and refunnelling the funds into the community.
It turns out that was a hot potato politically.
The Chairman: Why?
Mr. Coyte: There was a perception, particularly amongst those in the home and community care sector, that they needed some guarantee that the funds would flow towards them. There was a concern that the hospital sector might take those additional funds and use them for in-patient days of care, although the incentives seemed clear that they would not use them exclusively for in-patient care. There is a degree of tension between different groups and a lot of anxiety and unease with respect to the hospital when perceived from individuals in the home and community care sector.
That was why people were concerned. They made their concerns known quite well, and we have revised the report to not include that recommendation.
I am the treasurer for North York's Community Care Access Centre and what we have seen is a phenomenal increase in hospital referrals, and we have seen a reduction from the community. Individuals can self refer or their family physicians can refer them. Our caseload has changed from almost a 50/50 split five years ago between hospital referrals and community referrals to a significantly larger emphasis upon hospital referrals, mainly because home care programs cannot say ``no'' to hospitals that are requesting home care for their clients. If they were to say ``no'' on a significant basis, it would provide more ammunition for the politicians to reallocate funds from home care programs and put them into acute care programs. In some ways, the home care programs are bending over backwards to service the needs of the acute care sector, but they still have control over those particular funds. In some jurisdictions, control may be less clear than in others.
The Chairman: You have suffered from the same thing that various levels of government have suffered, namely, that senior levels of government have offloaded expenses to juniors, who, in turn, offload them to municipalities.
Mr. Coyte: There is a trickling-down effect of every government decision.
The Chairman: You are at the bottom of the chain in this case.
Mr. Coyte: We are the bottom-feeders, yes.
The Chairman: You referred to your draft recommendation. Could you send us the data you collected? If you have a copy of your draft recommendation, that would be helpful as well.
Mr. Coyte: I will follow it up.
The Chairman: Mr. Hollander, do you wish to comment on this discussion?
Mr. Hollander: If you want to set up hospital replacement type of home care, there are mechanisms available to do that. You could target funding or have a federal-provincial agreement.
The Chairman: The Carelinks program did that. Is that right?
Mr. Hollander: No, they did something a bit different. You are talking about a change in the way we organize services in the health care system to focus more on short-term replacement home care.
As I said, there are ways you can do it, but there will be consequences to those actions. It will be difficult to implement because many people are already on home care services. You will have to negotiate who looks after the person; the hospital outreach person, or the person in the community.
If people work in the hospital and do hospital outreach, they may not be as well informed about the available community services. Also, many people come in from more rural areas and receive care. You cannot do a hospital outreach if the person lives 300 miles away.
The main concern I have is that you will be driving a wedge between health care and medical care. You will be focusing on medical care and over time there will erode the supportive services and the policies that surround people with ongoing care requirements. It will create a situation where we will have ``fixed'' home care. You need to address what you want to recommend for people who have ongoing care needs.
The Chairman: You said we would be ``driving a wedge between medical care and home care.''
Mr. Hollander: And health care.
The Chairman: That wedge exists today. It is called medicare and the Canadian Health Act. Do you agree with that?
Mr. Hollander: No, I do not agree with that.
The Chairman: In the sense that the Canada Health Act is not the Canada Health Act; it is a hospital and doctor act.
Mr. Hollander: If you look at the services provided under provincial ministries of health, you will find a wide range of services beyond hospital and medical services, including most of the types of services that I am talking about today.
The Chairman: I agree with that. However, I am talking from the federal perspective.
Mr. Hollander: Again, with all respect, these services are called extended health care services and are incorporated in the Canada Health Act. They are simply not insured services, but they are services under the act.
The Chairman: I am trying to understand why broadening the definition of what was insured creates a problem for you.
Mr. Hollander: I am certainly not against broadening the definition. My understanding of what you were asking was: What was our view on a home care model that focused more on replacement for hospital services?
The Chairman: In that case, I did not explain myself. My question is: What is your view on expanding the insured coverage to include coverage for immediate post-acute release from the hospital care, as opposed to extending it to include all home care?
Mr. Hollander: Again, that would be fine, and it would be helpful to many people. You would be focusing on the hospital replacement portion of home care by doing so. I think there are consequences to that action. Perhaps I do not understand your question. If you were asking about an expanded range of services to come under the Canada Health Act that would benefit people in the longer term, I would agree with that.
Ms Hansen: Our program started primarily with a substitution replacement function and grew rapidly from there. We were not a hospital outreach program, but a separate, distinct entity.
The Chairman: Can you explain what you mean by a ``hospital outreach program''?
Ms Hansen: The service providers come from the hospital and provide the care in the community. Community care is not hospital care. Service providers in the community are very different from service providers that function in the hospital. We often say that our service providers are specialists in the provision of home health care. We are very particular as to what type of service provider we hire.
We often describe ourselves as the bridge between hospital and community, and oftentimes that we have a foot in both doors. We are a sort of link and consider that to be one of our strengths. We are very involved in long-term care, continuing care, and rehabilitation services. Clients move back and forth. A long-term care client can suddenly become an acute care client and then go back to long-term care services, or become a palliative client. We have service providers that address all of those needs.
There is a big difference between a hospital outreach program and a community-based program.
Senator Keon: Ms Hansen, I think you have the best home care program in the country.
Ms Hansen: Thank you. So do we.
Senator Keon: How do you handle a conundrum like this? A patient gets into your system, let us say after a small stroke. You care for this patient, and you help in his rehabilitation. as best you can. Then the patient has another stroke, and it becomes obvious that he is going nowhere, but that he will need to be somewhere for a long time. This person is in your program. Can you go on taking care of him in some capacity for four-or-five years, or do you have to link to another service?
Ms Hansen: It depends on what the patients' needs are. We certainly do provide long-term professional health services, when required. If that individual requires long-term support service, we can complete the assessment, and put the services in place. The difference is that the funding comes from a different department. We have a single entry for those types of services. A client can knock on one of three doors: our door, the mental health services door, or the department of family and community health and services door, and have an assessment for long-term support services.
There is no cut-off, if that is what you are asking. There is not a point where a patient has reached his limit of service. If professional health care services are required, we continue to provide them.
Senator Keon: Could you tell me how you would make the transition from your program to the community services program?
Ms Hansen: The client would probably not see a transition, because we are qualified to do that assessment and to put in the services in place. A different department would pay for the services, but the client would not necessarily know that was happening. In the delivery of community services there are many players. We also do case management which is key in the delivery of community-based services. We assign a primary service provider rather than case manager and that individual is responsible for ensuring the whole delivery of services to meet the needs of the client family.
Senator Keon: In many provinces, that is the time when the patient and family are facing tremendous financial hardship.
How do you avoid that situation?
Ms Hansen: We have a means test in our province for our support services. There is a component of determination of financial status and ability to determine whether the patient can contribute to the cost of home support. There is no cost for the home health care component. There may be a cost for home support.
Senator Keon: The Meals on Wheels and so on?
Ms Hansen: Correct.
Senator Keon: Mr. Coyte, you have said that a one-fifth of home care services are private. We have a $3.5 billion program. Roughly, $700 million is spent on private expense expenditure on home care country-wide. I think that is a low figure, but I want you to convince me that I am wrong. Are the drugs covered in those figures?
Mr. Coyte: The $700 million figure is based on Statistics Canada estimates from household expenditure surveys, which are age and sex adjusted. Those figures came out in March 2001.
I do not know whether drugs are included in those figures. Estimates that I acquired by talking to members of the board of our research centre, which is composed of the Victorian Order of Nurses, St. Elizabeth Health Care, Comcare Health Care Services and We Care Health Care Services are similar to those figures. They provided their revenue sources that were divided into sources that came from different levels of government, and revenue that came from nursing personal support, and other therapy services, from either insurance payments or the clients' pocket.
In that case, $1 in $5 was from the private sources and 80 per cent was from public sources. Statistics Canada figures were consistent with the figures from Ontario and from coast to coast to coast, in terms of providing care. I am comfortable with the level of service provision figure of about $700,000 from the private sector. Whether all the equipment and other drugs and miscellaneous supplies are included, I am not quite sure.
Senator Keon: I would like to discuss your work with the Sinclair Commission. Hospital restructuring was difficult in some areas, for example, here in Ottawa, because the commission did not look at the big picture. Hospitals were restructured in isolation.
Do you think that the big mistake was that they did not go to regionalization before restructuring the hospitals? They could have looked at home care, continuing care and chronic care, rather than just restructuring the hospitals.
Mr. Coyte: The restructuring commission looked at a number of sectors including primary care and made some recommendations and had vision statements with respect to the centrality of primary care. It moved forward in its business by, first, providing a significant emphasis upon the consolidation of the hospital sector. There was then recognition that there was a need to develop some estimates for the infusion of funds in terms of home care.
We found in Ontario that for every $6 that was removed from the hospital budget essentially only $1 was reinvested in home and community care. There was a significant seepage of funds out of the health care budget as a result of restructuring. There was some consideration of the number of long-term beds.
I made comments about that in a report that we released last week in Ontario. I noted that perhaps the restructuring commission was a little bit overzealous in terms of building long-term care beds in Ontario.
I am not sure that a regional government would have resulted in better estimates. Of course, when the restructuring commission toured the province, there were attempts to focus on communities. There were the Thunder Bay reports and attention on Ottawa-Carleton, and so on.
There was some degree of consideration of a number of interrelationships concerning the components of care in each jurisdiction, but it tended to be done first with hospital restructuring, then with parallel post-acute home care and long-term care beds.
Senator Keon: I will talk to you privately about that some time, because I could talk to you about that for a long time.
As you know, I submitted a brief to you. You should have done what I said, and those problems would not have occurred.
Mr. Hollander, I want to pursue the same issue with you. You began talking about cost effectiveness. In this province, hospital restructuring, which is all the health restructuring fundamentally that we have had to date, costs have gone up enormously. The health care budget has risen enormously. We cannot cope with the situation that we have in some cities.
Do you think that we can have appropriate continuity of community care, home care, chronic care, and so on, without regional health authorities in a big province of 10 million people? I will not take you outside of Ontario.
Mr. Hollander: I believe that it can be done. I was responsible for the continuing care system in British Columbia in the mid-1980s and early 1990s. We had a well-integrated model. We had a number of international people come and look at the model and try to learn from it. They said that they thought it was one of the premier systems in the world at that time.
It is the building block for the model that I have proposed here. It is based on my experience.
At that time, we had health units across the province and continuing care administrators in each of the health units. We were able to run a provincial system in a reasonably effective manner by having people at the regional level but without having regional health authorities necessarily.
The big advantage that we had, and this gets to the issue of cost savings and cost effectiveness, is that we had one administrative entity, which was the continuing care division. We had one budget allocation for the division.
We could do a number of things. For example, we developed a planning and resource allocation model for the entire province and for the entire system, not just residential beds or home care services. In a structured and proactive manner, we were able to take money from Treasury Board that was given to us for increases in utilization and put them into the home care side and restrict the building of facility beds. Thereby, we affected a significant transfer of funds from residential services to community services on an ongoing basis for a certain period of time.
This single administration and single funding envelope gave us much more freedom to manoeuvre things within that entire system of care. To my way of thinking, this broader system allows for more efficiency than you have in more splintered approaches.
We were a large division and the Executive Director of Hospital Care and I had offices beside one another. A broader system with a senior person at the head would enable better negotiation of arrangements with hospitals. In the broader system you can bring about these types of substitutions and make the entire system more cost-effective.
The Chairman: You were able to break down the silos, but not because it was organized that way deliberately.
Mr. Hollander: It was a bit of both. We were able to break down the silos because we had everything under one administration and one budget. Within that group of services, we could make policy for the system, not just for residential or community-based services. We could make proactive choices about shifting money, and so on.
The other part of it was, because we were a large program, the head of the program had enough clout within the system to be able to negotiate on a more equal basis with physician services, with hospital services, and with provincial systems' associations of care.
The Chairman: It was a combination of the two.
Mr. Hollander: Yes.
Senator LeBreton: Home care takes on many definitions and people, depending on their needs or where they live, have different expectations of what home care means. Often, it relates directly to a situation they find themselves in.
Mr. Coyte, you said home care is broken into basically two categories: Short- term patients who leave the hospital before 13 weeks; and the long-term patient that in some cases needs care until he passes on. In the short-term, you spoke of two-thirds of the care is from nurses, and the other one-third is evenly divided by the health care professionals. Is that correct?
Mr. Coyte: Yes.
Senator LeBreton: Regarding the long-term care, after 13 weeks, 60 per cent of the care given is personal care, and the remaining care is from nurses. Personal care means family members. Is that correct?
Mr. Coyte: No, that is from personal support workers.
Senator LeBreton: Where do family members come in? When people are in long-term home care, it is often family members that have had to give up their regular jobs to take care of the patient. This creates a subsidiary health care issue in the family, perhaps with the care-giver. How do you compensate these people in a perfect home care system? Do you give them tax breaks? Perhaps they want to continue working. How do you deal with the family members?
Mr. Coyte: The most recent statistics suggest there are about 3 million caregivers in Canada who are providing care, both to those requiring care on a short-term basis as well as those requiring care on a long-term basis. Many of those care givers are partners, children of those partners, and friends as well.
Not only are the formal paid providers of care predominantly women, but also those providing care services in an unpaid capacity. There is a significant component of care offered that is not captured in the $3.5 billion industry, nor is it captured in terms of the care profile statistics that I have mentioned. We are only seeing, the tip of the iceberg in terms of dollars spent with respect to home care.
When we talk about health care, we say there is a 70 per cent/30 per cent divide between public and private expenditures on health care. In the submission by Dr. Patricia McKeever and myself, we argued that if there was a public-private divide taking into consideration the value of caregivers' time the divide may still be 70/30, but this time 30 per cent public and 70 per cent private, with a component of that being out-of-pocket or insurance-supported funds, but the vast majority being unpaid care-giving activities.
That gets to the point Mr. Hollander was making with respect to the cost effectiveness of service provision. One of the assumptions driving change is that many organizations that shift care from hospitals into the community do so by having a relatively myopic view in terms of the budget. A patient discharged from hospital is a reduction in the liabilities of the hospital sector, but an increase in the liabilities of home care. More importantly, it is a significant liability increase not only to the family members but also their associated employers. There are a number of individuals affected by minor changes within health care.
With respect to the cost effectiveness of care, while I am a professor of health economics, I think it is no secret that economics is more of an art than a science, just like medicine. There are different and competing methodologies in terms of valuing not only the direct and indirect costs of the formal care provided, but also with respect to the measurement of unpaid care-giving. Until we have a much more definitive body of knowledge, it is sometimes speculative to argue that one particular category of care is more cost effective than another for all persons at all points in time. We do not have the data to make definitive arguments.
Indeed, I am involved in two of the studies that Mr. Hollander is leading. There, with respect to lactation consultants following the birth of a pre-term or term child, the costs are no different. It is the effectiveness changes that suggest that the provision of specialized lactation consultants might be a good thing following discharge. The costs are not significantly different between the groups, but the methodology underlying and supporting the conjectures are sometimes wavey.
Mr. Hollander: You have raised the important issue of informal supports. For example, if you hire a nanny or somebody to look after your children, there are certain tax treatments in terms of things you are able to deduct and so on. My recollection is that the tax treatment is different for children and seniors. We might want to think about whether that is equitable.
There are people, let us say a husband and wife, who may be around retirement age, but one has a longer-term disability. Due to the pressures on the health care system, they are having difficulty getting the amount of service they need. What some of those people have been doing is using their RRSPs. You have a substitution of pension benefits for health benefits on an involuntary basis because these people will spend their RRSPs and not have money left over.
In one of our more recent studies, we looked at the cost of informal home care compared to residential care, and we looked at out-of-pocket expenses and time spent.
The results varied considerably according to the care the patient needed. On average, we found that if you cost the time provided at a replacement wage and you add the out-of-pocket expenses, the amount of money is essentially the same as the amount provided by the state to look after people. If you go with that costing, families are providing 50 per cent of the care for the longer-term home care patient. This was a small study and further study is needed. However, it is instructive to know that the figures might be somewhere close to that.
Senator LeBreton: Ms Hansen, do you have specific examples in New where you run into this difficulty of unpaid home care? How do you deal with that in New Brunswick? How are they compensated, or are they?
Ms Hansen: There is no compensation. We do recognize that unpaid home care is essential and they do carry a considerable burden, both in terms of the home health care component and home support.
We have found in that they have been asking for more support in terms of timely, accessible information and education. It is interesting that our discussions have centred on support, rather than monetary compensation. They would like to have support networks with other care-givers and access to information when they need it. We have been looking at those types of initiatives.
Counterparts in other provinces are looking at the same type of initiatives to help support the caregivers, especially the informal ones.
Senator LeBreton: Mr. Hollander, your key policy questions are spot-on. You talked about having CIHI provide utilization expenditure data for this sector, and I wrote beside that ``yes.'' Then you asked:
Should continuing community care services become insured health services through the Canada Health Act, a separate act, or the social union mechanism?
I would like to know, in a perfect world, which one you would recommend?
Mr. Hollander: A perfect world is a perfect world. I would like to address your question in terms of the real world or my perception of it. Again, this could relate just to home care services or to the broader range of continuing care services.
The problem with the Canada Health Act is if you do open it up for this particular set of services, the act essentially is opened up also to discussions about co-payments to hospitals and physician services and you may have more problems than you want to have.
Senator LeBreton: It would be a Pandora's box.
Mr. Hollander: The other thing that is recommended is a parallel act. It seems that, under a new piece of legislation, it would be difficult to get provinces to agree to the same kind of penalties.
While it is perhaps a much less sexy or big-bang type of thing, some carefully crafted work under the social union may get us further. Essentially, it can be done at an administrative level. You can get people both at the federal and provincial level to work together to see where they have commonality.
I also think the social union framework might be a good idea because both of the other initiatives are federal initiatives. There are sensitivities at the provincial level where they are responsible for health care services. Doing something on a social union basis would allow them also to be perceived as caring for their citizenry and the people for whom they are responsible and not simply doing something that is done through the federal government.
I am not an expert in this area, but the administrative or political optics and art of the possible might be greater through that mechanism.
The down side is that people could then opt out and then there is not the same force. However, there is a commonality in the kind of services that are already provided. It may not be that difficult to have some movement along the margins that would take us toward a consistent program.
The Chairman: The real downside is accountability and transparency in tracking the funds, if you are on our side.
Mr. Hollander: Yes, that is correct.
The Chairman: I agree that it would be more peaceful for the provinces; it is not clear to me that that is an overriding public policy goal.
Senator Cordy: Certainly the issue of home care is one that is important to many Canadians.
How do you determine whether there is a safe environment for the patient to be in the home? Not all homes are safe environments. How do you do that? Who determines that? Who is the person who goes to the home to determine whether it is safe or not?
Ms Hansen: We go into the home and assess whether it is safe and appropriate for the client. Sometimes we need to have access to an emergency or to an institutional setting within a specific time frame. The decisions are made intervention by intervention. Another issue we look at is the availability of a telephone. A home would be assessed as unsafe is there was not a telephone in it for the client to use in case of an emergency. We look at all the basic matters.
This is a difficult issue because the individual has the right to determine his or her level of risk. We often get the response from elderly clients that they have lived alone without a telephone, for instance, for 50 years. It is not really clear-cut.
However, in terms of what we will provide, it is very clear-cut. We will not put the individual at risk in terms of what intervention we are bringing into the home. The same would be true for our service providers. We will not place our service providers at risk if it is deemed an unsafe environment. There is an individual's right to determine the level of risk with which they will live, and that needs to be considered.
Senator Cordy: Access to certain things, such as a telephone is one issue. However, what if it is not a safe environment because of abuse, for example? Who determines that? There may be abuse of a patient within that home setting.
Ms Hansen: We have protocols we would follow in that case for mandatory reporting. There is a specific procedure that we follow cases like that.
Mr. Coyte: Patricia McKeever has conducted a study in Ontario, has reported at a number of conferences, and will be reporting in the academic literature over the next two years. Her study, Hitting Home is a compelling story of how home care is rolled out in the province of Ontario.
It was perceived as being a major success for health care in the Chicago area when a child was discharged from hospital on ventilation support. This child was discharged to the family that was living in a school bus with no running water. There was a home generator attached to the school bus to provide the electricity to run the ventilation.
That is a scary story in terms of what is going on with respect to home care. If we consider rapid and early discharge to those kinds of places as successes, we have the prospect of some significant concerns with health care in the future.
If we look at the Canadian housing environment, most homes were not designed for the site of long-term care, whether there is the need of a wheelchair or where the lights are placed in a particular house. There are significant variations in the housing, and rental accommodation, that confronts Canadians in different ways. To assume that all houses are just like those for the senators is most probably unlikely to be a reasonable depiction of homes for Canadians.
To emphasize individual rights, particularly where the state is paying for care, one needs to take a collective viewpoint into consideration, as well as individual rights. There is some need to assess the adequacy of housing, not just in terms of physical and material stock, but also in terms of the social and neighbourhood environment, which would be conducive to the care that is offered to Canadians.
Senator Cordy: For children, in particular, it is always home sweet home, is not it? We all have dreams of what the perfect home life will be.
Ms Hansen, you said you are constantly defining the role of home care in New Brunswick. I am not sure whether you are defining it in terms of people in the community, or in terms of the fact that it is always evolving, or both.
Ms Hansen: Both. We find that as technology changes physicians often believe that care can be continued at home. Just because it can be done does not mean that it should be done. We take seriously what it means to introduce some of these health care interventions in a home care environment. Some of the informal support just cannot cope with that in a home. Sometimes it is not safe to do so.
We are fortunate that we can refuse, and we do. We tell the physician that it cannot be done and give the reasons why we believe it is wrong for the patient to be sent home for home care. The program was developed that way from the beginning.
Much of this has to do with changing technology and new interventions and people trying to push the patient out of the hospital and into the home. We have strong evidence-based clinical policies and procedures. Sometimes there is not the recognition from, perhaps, the physician community that, yes, it can be done in the hospital, but it is a very different situation when it is done at home. We do not have an on-call system where we can push a button and someone will come running immediately. That is why we make a decision on every case that comes in. We review them for eligibility and whether we can provide safe and appropriate care.
Mr. Coyte: While New Brunswick may be unique in terms of having a uniform standard across the province, Ontario is certainly not uniform in terms of service provision. There is a major lack of service consistency, whether you are in Renfrew, Peel, Windsor, Metro Toronto or Kingston. The availability of service provision is unparalleled within the home care sector compared to even surgical procedures. When certain organizations report quite wide variations in access to particular in-patient surgical procedures, there are even larger variations in terms of access, not only in terms of the propensity to receive service, that is ``yes'' or ``no'', will you get service, but also the level of service from one jurisdiction to the next.
Case managers make service decisions, and case managers are entrepreneurs unto themselves. Their rollout in terms of care provision can vary significantly. Their views on a reasonable housing environment and a home environment can also vary widely.
There is a need to develop common assessment tools that take the discretion out of some of those servicing decisions. Obviously, there is a need for professional discretion to some degree, but it needs to be quite small since one is using the public sector purse.
Senator Morin: What about home care to the homeless lying on the sidewalks of Yonge Street? I do not think we need necessarily go south of the border to find stories of that type.
I realize this issue is intensely provincial and community-based. Is there a minimum level of home care to which all Canadians should be entitled? For example, we know that no Canadian should be deprived of life-saving drugs. There are situations where this exists, but our committee is trying to address them. I am thinking of the frail elderly who are more at risk than those who are in post-acute care.
Is there a minimal program that the federal government could support by itself which would ensure to all Canadians a minimum level of home care?
Mr. Coyte: In Japan, long-term care individuals are assessed based on a questionnaire. It is then automated and the person is prescribed a specific number of minutes of particular types of care.
Embodied within the questionnaire and the translation of the answers to those questions in terms of time that is funded by the state or the insurance organization, that, in a sense, rolls out what your minimal level of term care needs are. I guess the issue is what types of services you would provide. Obviously, nursing would be included, as would the other therapies. Based upon some of the evidence that Mr. Hollander has spoken of, personal support services would naturally be within the bailiwick.
The question is: Under what circumstances would such care be triggered? Second: How much care would be triggered if you have reached that eligibility requirement? You can define, just like an insurance company, the terms and conditions under which insurance is offered. I do not think we have in any particular provincial jurisdictions a very clear description in terms of what services would be paid for by the province and under what circumstances. I may be wrong.
The Chairman: I thought you said in the study you did for the Sinclair commission that you used a maximum period of 90 days. You concluded that was nevertheless a doable piece of work. You seemed to indicate to me that, if people were willing to put their resources into doing the research to develop the standards, it was a doable piece of work.
Mr. Coyte: I said that if one defined the service provision period up to 90 days, and one identified specific clinical groups based upon the most responsible diagnosis, and one took the average cost of various kinds of services that people in the past received for such care, one could come up with a capitation payment scheme based upon particular clinical groups. That imbeds history into the new capitation-based scheme and that is a starting condition.
Senator Morin: Would that exclude chronic care?
Mr. Coyte: In that particular context, it would exclude chronic care because, perhaps, that is the first of multiple steps that one wants to move ahead with.
Senator Morin: According to what Ms Hansen is saying, it is difficult to separate the two. I am not sure that the urgent needs of Canadians are at the acute care level. I believe that they are at the chronic care level.
Mr. Coyte: One can look at the frail elderly and their difficulties of day-to-day living and specify funding arrangements based upon levels of difficulty with respect to those activities, and fund on a capitation rate individual primary care groups who could then roll out, and contract out or even provide in-house nursing, therapies and personal support services. That is most probably a second stage in terms of the overall reform because even in Ontario we are trying to have primary care reform and it is taking many years to happen. That is a reform that will occur, perhaps, 10 years down the road.
The Chairman: What you want to do is a first step that makes those other steps possible. You need to understand where you want to end up. The capitation primary care is the second step. The people from the OMA program came here and told us that they have something like 275 or 300 GPs out of 8,000 in Ontario signed up after a three-year effort. Obviously, this is a slow process.
Senator Morin: It is 300 more than any other province.
Could I ask Ms Hansen to answer the question? I am interested in your opinion on the subject.
Ms Hansen: I stated earlier that the extra-mural hospital did start out with a substitution function.
The Chairman: Can you send us a description of how that was originally defined?
Ms Hansen: Yes.
We quickly grew because we recognized that it is difficult to provide just one component of a system when many others are required. For example, we had an elderly lady in hospital with a hip fracture that needed to come home. She required our services, but also required some short-term support service. Short-term support service is not really covered by any program in our province. One of the options was to place her in a relief care bed in a nursing home. The nurses in the nursing home could not provide the necessary level of support. The lady needed extra-mural support.
We are not provided with the funding to provide that short-term support, but we did. We went ahead and brought her home and provided her with that short-term support. She ended up being a long-term client. Clients move back and forth between short-term and long-term. It is difficult to encapsulate the short-term episode. We may have a nurse doing a short-term service and a respiratory therapist that is in there for the long-term. That is why I say that unbundling is difficult.
Senator Morin: New Brunswick spends four times as much as on home care than Quebec. However, the patients that you see at home, in many cases, cannot afford the life-saving drugs. We have heard stories about people in New Brunswick who cannot afford their drugs.
Quebec spends four times more on drugs than New Brunswick. Drugs are fully covered, but I am sure they cannot spend four times less than you do and have a satisfactory program. I am sure they do not. This is true for other provinces such as Prince Edward Island and others.
Everyone should be covered for life-saving drugs. That is the one thing we will say, as will the Romanow Commission. Everyone agrees on that. The New Brunswick situation as far as drugs is unacceptable. We must either fund or find a way to settle that.
Having said that, there are experts here today, who are unable to tell me why we cannot do the same thing for home care
Mr. Hollander: Part of the problem in defining a numerical amount is that people have different care needs. In looking for a numerical amount you have to so at different levels of care. There are differences in the amounts of service that are provided across the country so it would be difficult to determine which would be the right amount, and so on. To provide that kind of numerical value would be difficult, particularly given that we do not even have good data right now about how much care is provided across jurisdictions.
You asked about a national perspective. I believe it would be possible for some recommendation of a standard or a principle that people should get care commensurate with their needs. Ultimately, it is a clinical decision as to how much is provided. Therefore, it is a bit difficult. However, setting a principle is certainly well within the purview of which you speak. After that, we should establish some methods of monitoring and comparing that could be adopted. If this is done over time, we might arrive at a national consensus.
As we start collecting data over different jurisdictions, we will have much better comparisons and have a tool that can give us that numerical standard that you are talking about.
Senator Cook: Ms Hansen I read in your brief that you receive your funds from the Department of Health and Wellness through a ``protected budget'' within the global funding of the regional health authorities.
How do you negotiate your budget each year? Do you negotiate it through the regional health authority or through the Treasury Board of your province, or the Department of Health?
Ms Hansen: It comes directly to the department. Any requests for enhancements to the budget come to the Department of Health and Wellness.
Senator Cook: Do you negotiate through the regional health board?
Ms Hansen: No. Because of the separate envelope funding, the department deals directly with any requests for enhancements to that budget.
Senator Cook: I do not see a problem when I look at your ratios here with only 3 per cent of the Department of Health and Wellness.
Ms Hansen: When the program came under the umbrella of the region health authorities in July of 1996, it was decided to protect the budget. The region health authorities can put some of their global funding into the budget but they cannot take from the budget. They do enhance the budget and they will enhance the budget, recognizing when there is a need in their home care program.
Senator Cook: The more we go along the route of delivering services differently, like options in the home and those types of things, have you had any problem accessing extras that you needed in respect to change in lifestyles or the change in the delivery of services?
Ms Hansen: To date, we have had no problem receiving the increases that were necessary in order to support the program.
Senator Cook: Government cutbacks have not crept into your jurisdiction, then?
Ms Hansen: No.
Senator Fairbairn: I would like to draw attention to a couple of sentences that have challenged my mind in terms of the obligation of government to respond to what is in these statements:
One is at the beginning of your presentation, Ms Hansen. You say:
To those who require services to develop or maintain their independence in daily life, the Extra-Mural Program is there.
That is what we as governments, policy makers and people in public life are telling Canadians that they should be doing in their daily life.
Mr. Coyte, at one point you infer that policy makers need to be creative in ensuring that the principles that safeguard care provided by physicians are extended to today's realities.
It seems to me that we have created a system that is seen with envy by other countries. However, our society has changed dramatically as to how people live their lives and make a living. We do not have the same home structure that sustains the conditions that we are talking about. We do not seem to be recognizing that fact.
We seem to be trying to provide some kind of home care, but elsewhere we are not sure of what we want to do, and we may be basing a lot of decisions on of family expectations that no longer exist. In that sense, the individual who is sick or needs assistance to be independent should not bear the burden of that lack of understanding or sensitivity on the part of policy makers.
Do you have any enlightening comments? It seems to me that is essentially what we are talking about today. If we have a health care system in Canada and it does not include home care, or home care that is relevant and helpful, then we better pull up our socks. That is something that this committee is here to try to give the system a push.
Mr. Coyte: Your comments are well taken. Most Canadians and most politicians are quite myopic. There is a degree of synergy between the two.
National Health Grants Program was the starting point for what we see today as medicare. That program provided 50/50 sharing programs with the provinces to build the modern industrial complex of hospitals that we see today. By the early 1970s, about 90 per cent to 95 per cent of all hospital beds that were in existence were funded out of that particular program.
By the turn of the century, most care was actually provided in the homes of Canadians. Hospitals had a small role to play. Health care took place at home.
If you look at the different settings in which care is now offered, each have had their point in time. We had a significant growth in terms of hospitals throughout the 1960s and up to the early 1970s. As a result of the federal funding arrangements act in 1977, that moved funding arrangements for physicians and hospitals from their cost- sharing arrangements to a block-funded arrangement. That provided incentives for the provinces to reduce their investments in those privileged sectors and providers of care, and redirected their energies to other components of the health care system.
Most of the electorate in Canada have gone through this period of change. They are very much attached to their individual providers of care, and they are certainly attached to the hospitals in which they were born. They receive care on a periodic basis, and 73 per cent or 74 per cent of Canadians die in hospitals.
We need to get over the attachment to hospitals. Technology along with pharmaceutical developments, and other kinds of user-friendly and miniaturized technologies, have enabled care to take place in other settings. We must be cautious about the overzealous expansion in terms of home care because not all homes and employment circumstances permit safe, effective and cost-effective care to Canadians.
We need to recognize health care within its historical context. Where we are today is on the basis of a number of decisions that occurred over the last 50 or 60 years that have enabled us to build a major and significant group of vested interests, both within the hospital sector and amongst physicians. We need to start to challenge the perception that those are the only things associated with health care.
While we say that Canada has a tremendous health care system and we are looked at as a favourable nation with respect to our Cadillac health care system, our Cadillac health care system represents a minority of services offered to Canadians. Hospitals and physicians are terrific in Canada, but we have a bankrupt system with respect to other components of care. You are bankrupt if you need home care, and you are bankrupt in some regions of the country if you need pharmaceutical care. As a result, we receive letters, describing situations where people are not just spending their RRSPs but are also undertaking reverse mortgages and selling assets within their homes. Canadians should not be put through that kind of wringer.
Senator Fairbairn: Ms Hansen, you must have a view on this because you seem to have developed in your presentation many answers to these questions. New Brunswick, since 1979, seems to have addressed these issues and successfully solved many problems that other provinces have not.
Ms Hansen: Yes. I always feel fortunate when the conversation turns to home care. I do think that we have a comprehensive program. We often say that that it has been the result of planning by design rather than planning by default. It does go back to the late 1970s with people that were truly visionary who looked at the program as a sustainable, real component of the health care system. We have grown tremendously since then.
In 1997, all of the rehab services were consolidated under the auspices of the Extra-Mural program. We provide all rehab services to nursing homes, the school system, to preschoolers and the community through this program. It has enabled us to introduce some consistency from north to south and east to west. New Brunswickers know who, where, and how to access the system. That has been the focus behind much of the planning in home care.
Senator Morin: This question comes back to your comments that people have to sell their homes and other items to get care.
Can we say that no one should spend more on home care than 2 per cent or 3 per cent of their income, and after that, the government gives a grant? Is that a way of looking at this, at the national level or am I wrong? You see my point, do you?
Mr. Coyte: Yes.
Senator Morin: The definition of catastrophic drug coverage is that no one should spend more for drugs than 2 per cent or 3 per cent of his or her income. That is it one way of looking at it. Can we apply the same reasoning to home care? The federal government cannot responsibility for the $3.5 billion. It is impossible.
You have told me that you were not able to define a minimum level of home care. Let us put a maximum on the amount that a person should spend. No one would then be faced with the problems that we have heard.
Mr. Coyte: I would like to clarify things. One can always define a minimal level of anything and then develop the benchmarks for a national home care program within some of the documents you have. I had to develop a minimum level of care that was based upon expenditure in each age and sex cohort averaged across the top three provinces. That is one definition.
Senator Morin: That is cost.
Mr. Coyte: That is based upon cost.
Senator Morin: No, I am talking about level of care.
What about looking at it by maximum percentage of income spent on home care?
Mr. Coyte: You could do that. The average seniors income is around the $30,000 range. Three per cent would be about $1,000. Personal support workers run, at a minimum, $20 an hour. That is 40 one-hour visits. That will not go far at all.
Senator Morin: I am not fixed on the amount. Perhaps it should be 10 per cent. Is that a way of looking at it?
Mr. Coyte: That is one way to look at it, but that opens the topic of having some user fees for in-home services. The question is whether user fees are reasonable in this particular context, or whether you use service eligibility and servicing criteria to determine what services will be publicly funded.
The question in terms of having user fees runs up to the issue: Is this service a service upon which individuals can make concerted decisions? Is there a potential for a degree of elasticity that people are likely to overutlize or abuse if it is fully insured?
Many people over the age of 70 or 80 years have compromised mental health issues and lack the ability to make ``informed decisions'' about the level of servicing they need.
Senator Morin: You are saying 100 per cent public?
Mr. Coyte: I would advocate 100 per cent public.
Senator Morin: It is difficult to define the federal role in that.
[Translation]
Senator Pépin: It is said that on average, women spend approximately 18 years of their life looking after someone who is ill. In terms of human resources for home care and community care, what do you see as the most important issue we should be looking at to improve the situation further?
We must find a way to recognize the work carried out by homecare workers, nurses and therapists. Are our human resources sufficient to provide the necessary services?
[English]
Mr. Coyte: There is concern in the Province of Ontario, with respect to shortages not only in nursing care but also in personal support. Even long-term care facilities have difficulty acquiring personal support workers.
The major activity in which one could engage both provincially and federally is the encouragement and adoption of the use of technologies within the in-home care setting. The adoption of technologies does two things. It encourages more individuals who work in the institutional sector to be willing to offer their services on a paid basis in the community care sector. Therefore, the supply side is enhanced. At the same time, to the extent to which it is used to complement of provision of care, the demand for those providers would be reduced, too.
There is a need not just for high tech care, but also ``high touch'' care. Technology is one way of shifting the balance and making sure that there is a more balanced approach to the provision of human resources as well as technological resources in the home care setting.
Capitation based reimbursement is a financing arrangement that does that as opposed to fee-for-service based reimbursement, which is specific to the providers of care. The costing decisions about the equipment are an add-on.
Mr. Hollander: There is a major project being done on this topic. I am involved in it. My comments are based not only from the work on that particular project, but also based on evidence in other work that is being done as well.
Under certain circumstances, or in certain places in certain times, there are home care workers who feel a certain amount of pressure. This results in a number of interesting things. They sometimes spend a lot of their own time giving care and are, therefore, both paid people and volunteers. They volunteer because they are not paid the hours required to provide the care the person requires. This is an issue of sufficiency of funding.
Labour standards are another issue. It is my understanding that there is some variability in things such as pay for travel time, mileage and so on.
Another issue is the tremendous variability in the rates that these people are paid across the country. One measure could be to advocate for some form of reasonable labour standards that could be applied across the country.
This is a provincial issue, but certain recommendations or standards could be set. These standards could ensure that people do not have to pay for their own cars; that they get paid for their travel time; and that they do not have to be a volunteer as part of their work.
Salaries should also be examined. I am not sure if it is quite as much as double, but in British Columbia home support workers are paid quite well. In some jurisdictions, people may only get two-thirds or close to one-half of the salary that workers get in British Columbia.
There is a tremendous variability, both in terms of compensation and labour standards. You may want to consider that.
Ms Hansen: I support what both my colleagues have said.
In New Brunswick our health care professionals are compensated at the same rate as the hospital workers. Our home support workers, however, earn in the $12 range. We are eagerly waiting for the results of the study and looking at some of those recommendations.
Mr Hollander: By contrast, in B.C., the rate is between $18 and $20. There is quite a difference between the two.
Senator Robertson: From what I understand, part of the problem of frustration and failure in other jurisdictions relates to the turf issue; everyone is protecting what they were doing before. I assure you we faced some of that attitude. Twenty years ago, we felt that we could no longer afford this foolish protection of turf. Somewhere along the way, we have to bite the bullet and say: ``You are going to work together or not at all. It is as simple as that.'' ``Decisions must be made.''
I remember when the VON became hysterical. That was before your time. VON happened to be more expensive than public health nurses and nurses in hospitals. We told them that we were sorry, and that they could do their own thing but it had to be outside of the system. We used our own people.
I must say the quality of the nurses was the best in the province because they were looking forward to the independence and the ability to use their training properly. They were in charge of the patient with periodic reference to a physician, if that need arose.
You must tear down the turf attitude. We will have the same problem with the health professionals. For some reason or the other, in the health system, we have been afraid to say no. Somewhere along the way, governments will have to say ``no.''
I know a fair amount about the system across the country, and there are certainly abuses in psychiatric hospitals, even though we have closed many down. There is abuse in nursing homes. You can mark it all the way down the road, and you must structure for that.
If we do not come to some logical resolution of this issue, given the demographics over the next 15 years, everyone will be frantically adding to their hospital structures. How are we going to accommodate the demographics as the population ages? Surely, from an ethical point of view, we are guilty of warehousing.
Most people do not like to adopt what small provinces do; they think that to put a sophisticated idea forth they must have an academic background. I do not mean that in an abusive way. As we say outside of Toronto: ``Toronto is the centre of the universe.''
In your additional research, strive for something that is practical. If you keep the silos, it is not practical.
The Chairman: I thank the three of you for coming. You have been extraordinarily helpful to us. We appreciate you taking the time to be with us, since you all came from out of town.
Senators, the steering committee decided it would be useful to have Professor Brian Ferguson of the University of Guelph, do a rebuttal piece to that research study that commented on private sector hospitals being less effective and having higher mortality rates. Apparently there are significant problems with the research design, as both Senators Keon and Senator Morin pointed out. Professor Ferguson is willing to do the research, but I need a motion to that.
Senator Cordy: I so move.
The Chairman: Is it agreed?
Hon. Senators: Agreed.
The Chairman: Carried.
Honourable senators, you will recall that David Stewart-Patterson presented a brief to the Romanow commission about three or four weeks ago. It received a considerable amount of coverage. It concerned the desirability of having an arm's length administration of health care budgets.
Mr. David Stewart-Patterson, Senior Vice-President, Policy, Canadian Council of Chief Executives: There are several points we want to make on the future of health care in Canada. One of them has to do with the fact that we want to recognize that there is a role for the private sector, even in the delivery of public health care within Canada. I think this committee has recognized that, noting the discussion about the appropriate role of public and private in the provision of health care as being counter-productive and diverting energy away from the vital task of systemic reform.
I want to thank the committee for providing an environment in which we can have a discussion of ideas based on their merits. In any discussion of how we are going to provide better health care to Canadians in future, we must look at how to do that most effectively. There are private sector avenues that will be necessary.
I do wish to highlight the concept of sustainability. This committee has concluded that the existing public system is not sustainable and therefore needs new sources of revenues. One point we continue to make is that it is pointless to talk about sustainability solely in the context of government's capacity to be able to finance the financial portion of the system.
``How much health care can we afford as a society?'' We find the answer in economic development more than anyplace else. If you look at the industrialized world, the wealthier societies are, the more they spend on health care because they can afford it.
How they divvy up those costs between the public and private sectors is a separate issue. If we are really talking about sustainability and access to the highest possible level of health care, then we must worry about getting the economy right first. To a great extent, if we look at it around the world and the number of innovations that are being developed in terms of new treatments and preventative techniques and so on, our standard of living in raw economic terms is going to determine how many of those innovations Canadians get access to. We can make choices in terms of what should be public and private, and that affects which individuals may have access, but the total amount available is going to be driven by the economy.
Let me discuss the Crown corporation concept. This approach is consistent with the approach this committee has recommended in terms of the separation of the three key functions of insurance, delivery and evaluation. We agree that the single public funder model on the insurance side makes a lot of sense, both in terms of fairness and administrative efficiency. We agree with the notion that an evaluation of how well the health system is doing must be independent if it is going to be effective, but we see a greater need for diversity, flexibility and competition in delivering health care to Canadians.
That is where we tabled this notion of converting provincial health care bureaucracies into a Crown corporation. The primary benefit of forming a Crown corporation would be the separation of the political issue of who to cover, what to cover, or how much to cover publicly, from the management question of how to deliver the services most effectively. I am not the only one who has come before this committee to talk about the benefits of that sort of separation. I think Jeffery Lozon referred to separating delivery from the daily parry and thrust of the political world.
Our members approached this notion with a significant degree of concern. Crown corporations are not a guaranteed recipe for success. We have had many examples of Crown corporations that have not worked, or not worked as well as they should have. Therefore, the whole notion of how you govern a Crown corporation will be critical, especially when we are talking about health care and people's lives being at stake.
We see a number of advantages in terms of the Crown corporation model. The ability to raise capital on terms that are roughly equal to or close to sovereign rates; the ability to encourage competition for that capital within the health care system; and the ability to allocate it according to various marginal benefits; are but a few of the advantages to the Crown corporation model.
The continuity of management and consistency of decision-making is another benefit that seems to have emerged from my discussions with people involved in the health care delivery system, both in terms of business leaders in their volunteer capacity as well as professionals within the management structure. When you are involved in multi-year, complex projects the ministerial and bureaucratic turnover can be significant. Breaking in a new minister and a new deputy every six months or so has proved to be a significant impediment to the management of major projects in terms of reform of delivery. We have examples of that if you wish.
In regard to access to capital, I mentioned public-private partnerships as a potential avenue for getting more capital into the system. Again, these are complex arrangements. In order to work well and deliver value to taxpayers, they have to be well managed. That requires significant expertise. The experience of various institutions that have gotten into this is that it takes a lot of time and effort to go through the learning curve in terms of how to manage projects like this properly. Obviously, if you centralize that expertise at a provincial level so that you can get at it, rather than having to go through the learning curve every time, you are going to have greater efficiencies out of public-private partnerships. You will get better and more consistent results.
Finally, I talked about economies of scale and the various other benefits, consolidating purchasing and provision of other services like information technologies, and so on. Many provinces already recognize the benefits of doing that at a regional level. There is certainly evidence that further economies of scale can be realized if you consolidate things such as complex corporate services in a similar way at the provincial level.
This comes down to putting incentives into the system. The advantage of a Crown corporation-type structure at the provincial level is that it has the benefits of continued public ownership, and ultimate control with the simultaneous benefits of a private sector attitude in terms of decision-making and the disciplines that go with the corporate structure. There is potential for incentives in there for a whole range of things. The Crown corporation structure is consistent with authority to negotiate compensation at the doctors' levels, and service-based compensation for hospitals and other institutions, so there is a greater potential to get there from here through a structure like that and put a greater degree of incentive into the system, incentives that would apply to a range of actors across the system.
The Chairman: Do you see, in provinces with regional health authorities, each of the regional health authorities being a Crown corporation in and of itself? That is to say, if you had a regional health authority you would not need both a provincial government Crown corporation and the regional health authorities. The funds could go directly to the regional health authorities. In Ontario, which does not have regional health authorities, the province might well need it. Have you thought that through?
Mr. Stewart-Patterson: Obviously, where there are no regional health authorities, it is a relatively simple exercise. Where regional authorities do exist, yes, you could say, ``In our view, in this province, we have already achieved the optimal scale at the regional level, and we want to leave it there, and we will simply change what we contract for and how we manage those relationships.''
The kinds of advantages I am talking about: the integration of complex corporate services; the information infrastructure; the contracting infrastructure; management of public-private partnerships; access to capital; will probably be more effective at the provincial level. Then we need to ask: What is the appropriate role of the regional authority? Is there still a rationale for making some decisions at a regional level as you would, say, at a divisional level in a for-profit corporation, or would it be more efficient to move away from that layer and deal directly with individual institutions?
Regional health authorities seem to have brought some strengths to the table, and I would not want to abandon those precipitously without being sure those benefits would still be captured at the provincial level. One of the tricky calls within health care delivery is, you want the economies of scale and the efficiency of management; while local responsiveness and accountability is still a concern as well. People's needs for health care are local. We have seen that locally, for instance, in the discussions in terms of the location of paediatric cardiac care as a specialized function.
When we are talking about centres of excellence, we know that we achieve both better health outcomes and greater economic efficiencies when you concentrate procedures. You then have some offset risks when people must travel further in order to get access to those centres. The judgments that come into play can get tricky.
Paediatric cardiac issues have arisen in the Western provinces. The Capital Health District in Edmonton provides those services not just for all of Alberta, but for other provinces as well. There is an agreement in the West that it is better to have one centre that does its job well even though it means people must travel to get there. I am not familiar with the economics and the specifics of what is being discussed in Ontario. I just know that it has come up recently in the local context, and I mention it in that regard.
The Chairman: You point out correctly on page 8 of your brief:
But to be provocative, what incentives for population health are implied by a GST that is applied to hockey sticks and roller blades but not to fatty foods? And why is it that employers can provide insurance for supplementary health care as a non-taxable benefit, but not subsidies for health club memberships?
You go on to pose the question: Is it possible to adjust the tax system in some way so that people who do healthy things will get, in a sense, a tax credit for it?
The committee has expressed a view that this is an issue that needs to be addressed. Do you have a more comprehensive list?
Mr. Stewart-Patterson: No, I do not. However, I wish to make it clear, that our members have not decided on a path that needs to be followed. We simply point out that if the objective is to encourage greater population health, we must look at the prevention side as well as the care side. The tax policy has a potential role to play on both sides of the equation.
As a matter of principle, we tend to favour tax policy that is simple rather than complex. We want to get away from the micromanagement of what items should be subject to special exemptions and things of that nature. The fact remains that you are able to tilt the tax system to encourage certain outcomes. That is one way to create incentives.
The Chairman: We have said that we will put in a specific proposal for raising additional revenue. That leads me to your comments about the tax system. You clearly favour our proposal for raising additional federal revenue. You state on Page 4:
The more Canada chooses to spend on health care through the public system, therefore, the more it will have to shift its tax mix toward a consumption base in order to remain competitive.
Are you saying, ``If you are going to increase revenues, do it by the GST''?
Mr. Stewart-Patterson: Not necessarily. If you impose an extra tax, do you do it on the basis of people's ability to pay? This model takes tax through consumption tax or income tax. Do you do it on the basis of a flat premium, which is basically a head tax you pay regardless of how much money you make or how much use you make of the system? The third model, like the Tom Kent model imposes a tax based on the use of the system.
The Chairman: Such as the C.D. Howe model?
Mr. Stewart-Patterson: In other words: What is the fairest way to do things? You can make a choice along that spectrum without any significant economic impact. There are ways to have and equivalent economic impact no matter which way you choose to go. For instance, you can impose a consumption tax through a progressive income tax system.
Consumption-based income tax is a well-studied concept. It essentially means that you impose a progressive income tax structure based not on how much people make, but on how much of what they make they do not save. Effectively, that provides, within the income tax system, greater incentive for tax-sheltered savings. Thus, people only pay income tax on the basis of what they do not tuck away for future needs.
There are number of ways to collect a consumption-based form of tax, whether you want to do it based on ability to pay, or based on use of the system or through a premium. The more money, in total, that governments at all levels want to raise, whether for health care or for other public purposes, the more they will have to lean towards consumption-based taxes, if they wish to maintain any kind of competitiveness at an economic level. A number of economists, such as Tom Courchene have made this argument.
The Chairman: Are you saying that international comparisons focus on income taxes and seldom lump the total tax burden in, even if it is like a consumption tax? If you make an adjustment in taxes to increase federal revenue is it better to do it in broad tax policy terms through a consumption tax or through, some form of a premium rather than directly through income tax?
Mr. Stewart-Patterson: The greatest economic impacts on the ability of the economy to grow is the rate of personal income tax, and corporate decisions on where and how much to invest.
There are various estimates in terms of the economic damage. We cited one that the Department of Finance provided the OECD in 1997. That estimate indicated that the marginal economic burden of an extra dollar of taxation was about nine times as high for corporate income tax as it was for the same amount of revenue raised through a sales tax.
The Chairman: Was the study done by the federal Department of Finance?
Mr. Stewart-Patterson: It was part of an OECD study, but they attributed the estimate to the Department of Finance.
I have seen other estimates. However, there is a pretty consistent relationship that indicates that the more you lean on an income base, the more you discourage people from working harder, and the more you discourage companies from investing. When that situation occurs you discourage the economic growth that you are depending upon for sustainability.
The Chairman: You say that a GST consumption-tax driven model is different because people are spending money in any event.
Mr. Stewart-Patterson: The economic evidence is that it does relatively less damage to economic growth when you raise an extra dollar.
The Chairman: What is your view of a health care premium, essentially an insurance policy, which varies somewhat linearly with income? Where does that fit on your spectrum?
Mr. Stewart-Patterson: If you apply that to an income base, that is based on the current definitions of taxable income, then effectively you make it an income tax and you might as well load it on. On the other hand, the progression curve is not as steep. The more it affects people decisions about working harder, or making investments in the future, the more impact it will have on economic growth. The steeper the curve, the more impact it has.
The Chairman: Senator LeBreton will continue question and will take over as chair.
Senator LeBreton (Deputy Chairman) in the Chair.
The Deputy Chairman: Mr. Stewart-Patterson, I get a great deal of enjoyment listening about all the good things about the GST. I actually did make a note of the hockey sticks versus fatty foods point. I remember the debate about taxes on foods. Needless to say, even though people think there is not much of a price to pay now, there was a hell of a price to pay when it was brought in. I have the scars and so do my colleagues, to show for it.
Mr. Stewart-Patterson: Even though a tax is economically more efficient does not make it more popular.
The Deputy Chairman: No, and we have learned that. The best compliment is that it has not been gotten rid of.
My question refers to Crown corporations. I think it is the way to go. It would get rid of many of the problems created in the health care system by changing governments, bureaucracies and ministers. It might end some of these pilot projects that, in many cases, are used for cover by all political parties. They are smokescreens or trial balloons to get them out of a touchy political situation.
How on earth will the federal government get provinces to agree to switch their provincial bureaucracies over to Crown corporations?
Mr. Stewart-Patterson: The short answer is that the provinces would have to see the wisdom of doing it alone. It is a decision for each provincial government to make as to whether it is the best route to take. There is nothing that would require all provinces to do the same thing simultaneously.
We are simply putting this thing forward as a notion that would make sense, given the caveat of good governance, which we do not take for granted. We think it is an avenue that has potential. Frankly, I would not expect it to be deployed simultaneously. The most likely outcome is that one province might see this as a concept worth exploring and try it out and, based on its success or lack thereof, other provinces might be tempted to follow suit. That has been the record of health care innovation in this country since medicare came along in the first place.
The Deputy Chairman: Has your organization given any thought as to how to start this process moving? Is there some kind of incentive or role that the federal government can play in order to get a few provinces involved so that others might join in?
Mr. Stewart-Patterson: Assuming the federal government thinks it is a good idea, we have suggested is that, the federal government look at its existing commitments as a kind of baseline in terms of provincial transfers. To the extent that the federal government increases the resources it is prepared to make available, and that it considers putting those resources into a vehicle that would be a carrot for innovation, there are a number of ways of achieving that. However, the most substantive one to date has been the creation of the Canada Health Infoway which was putting $500 million, on to the table and into an arm's-length agency to do something they all agreed had to be done.
I am not sure that particular model would be appropriate for the kind of structural change we are talking about, but it is possible for the federal government, to put money on the table in a way that is supportive of innovative efforts by individual provinces rather than distributing it evenly, on the basis of fiscal capacity, or whatever other arrangements have been agreed upon.
Senator Fairbairn: I noticed you sat through a bit of our fairly lively discussion on the home care issue. I am reading with interest your brief in which you talk about Crown corporations as a vehicle of innovation and change.
Can you envision a Crown corporation being of value to a federal government that is trying to bring home care into the national perspective? We have discussed the regional health authorities. The regional health authorities are only as free and effective as their master, the government, permits them to be. We have very good people on regional authorities in Alberta but, when the chips are down, they do not control their own pace of life.
Do you have any thoughts on that?
Mr. Stewart-Patterson: You have raised two issues. One is the governance issue, which is where the Crown structure has an advantage over the regional health authority. We are talking about putting into place service agreements where the amounts of money going into the Crown corporation, would be contractually agreed and therefore subject to less fluctuation from year to year.
Obviously, you would have to adjust those contracts on a year-to-year basis as the government changed its mind in terms of adding additional coverage or so on. They would have more control over how to get things done and how to allocate resources across the full spectrum of care. That is where we get to the question: How much is included in the mandate at the provincial level? Obviously, that will affect how things get done.
In terms of a federal role and an expansion of public care into an area like home care, the big trick is the issue of jurisdiction. The mechanisms for the federal government to get involved goes through the individual, whether it is through the tax system or transfers. That enables individuals to pay as opposed to requiring provision of another broad range of service and defining what level of service that would be.
I am not sure that the kind of approach we are talking about particularly lends itself to federal intervention. There may be ways that the federal government wants to intervene. I am not sure this particular structural change is the way to do it.
Coming back to Senator LeBreton's question, it is possible, to use a model like the Canada Foundation for Innovation to put federal money at arm's length for distribution according to certain principles. The foundation reinforces centres of excellence in research, as opposed to the traditional granting councils and their methodologies. It has been given a mission to go out there and reinforce success. That has put a new twist on the funding of research and it has had a salutary impact.
Does the health care field lend itself to that model? Not directly.
Senator Fairbairn: Not easily.
Mr. Stewart-Patterson: My reaction is that the federal government has two routes it can follow. This is not something that we discussed as an organization; I am giving you my personal reflection. The first route is to deal directly with Canadians as it has in the past in terms of tax policy and transfers to individuals. The other route is in a collaborative way. Obviously, you can encourage collaboration by putting on money on the table, which comes back to my suggestion that the federal government put incremental funding into health care through a vehicle that will encourage innovation, but it will be difficult to do in a prescriptive way.
Senator Robertson: Are you are recommending that provinces have Crown corporations in their health departments? What about the federal government? Do you favour a Crown corporation there in order for an easier and, perhaps, a more cooperative approach to the provincial Crown corporations?
One of the big problems you have identified is the political wrangling that goes on. The public is getting tired of this and they want some sensible cooperation. If we could have a federal Crown corporation do you think that this would assist in cooperation for the provinces?
Mr. Stewart-Patterson: I think there may be a role for an arm's length body or agency or corporation, at the federal level. It would not have a parallel role.
The basic reason for looking at a Crown structure at the provincial level is to separate the fairness questions of what cover from the management questions of how we deliver. Since the federal government is not directly involved in delivery, that federal separation of responsibility is not really relevant.
The Canada Health Infoway was put at arm's length and federal money went into it at arm's length and that made it easier to get agreement on governance that brought all the provinces on board to work on a national problem, and to work on it jointly. An arm's length relationship at the federal level may be of benefit in making it easier to get collaboration. There may be benefits.
On the other hand, putting it at arm's length is not necessarily a recipe for success. The government tried to put money at arm's length into the Canada Millennium Scholarship and in some cases the provinces have not reacted to that program very well. Much will depend not just on the structure of the federal intervention, but its intent and its perceived intent.
Senator Robertson: There is structure in the federal Department of Health that deals and relates with the delivery of service at the provincial level. There may be an opportunity there for cooperation. If you have a corporation that deals with the federal Minister of Health, you will likely have provincial ministers of health with their noses out of joint.
Mr. Stewart-Patterson: I do not intend to get into it in any great depth, but the committee has pointed out that the federal government has some direct possibilities as well, particularly with respect to Aboriginal populations. It may be that the federal government has delivery type responsibilities that they want to investigate for the benefits of that kind of structure.
Senator Robertson: How does your model ensure ministerial accountability? You show the responsibilities of the Crown corporation and then the Department of Health, which is essentially the minister, and then the legislature.
In a process like this how do you to firm up the ministerial accountability?
Mr. Stewart-Patterson: The trick is how to achieve the accountability. As we see it, there is a retention within the health ministry, directly responsible to the minister, the responsibility for health policy, the ``what is covered'' bit. The accountability for delivery is managed through a contractual arrangement between the government and the Crown, and it covers not only what services are to be delivered but also standards of delivery.
In other words, this is quite consistent with those who have called for maximum waiting lists and things like that. The contractual relationship also allows room for the kind of incentives the committee has talked about. Those incentives come into play not only when one has a fixed amount of money and a responsibility to deliver these services, but whether it has been done within budget or not. If it comes within budget, there may be a pool of money within the corporation that it can be used for bonus pools and so on. However, incentives can be built in with respect to the quality of service and the standards of delivery that are required. Those can be negative incentives as opposed to positive ones.
One can deal with accountability in terms of the overall quality of service and access to it, through the contractual mechanism. There must be a clear separation of responsibilities. In my days as a journalist, I spent some time covering the conversion of Canada Post to a Crown corporation and I came to the conclusion that the Crown corporation would not start to function effectively until ministers learned to take their hands off and to stop answering questions in the House.
There is a discipline involved in governance. We have expressed, not only the caveat about the importance of governance, but also in our more detailed submission to the commission, how to get that governance in terms of the independence of the board, the quality of the people you need on the board, and so on.
Senator Robertson: Make sure they are non-political.
Mr. Stewart-Patterson: You must ensure that you have the functional expertise and leadership that is required to manage a highly complex business. The benefits are that you can go out and pay people to get the expertise you need. You can do that on a basis that is not turning over with the frequency that one sees within the context of a public service.
Senator Robertson: Certainly it seems like a stabilizer because there is no stability there with the constant turnover of ministers and deputies.
Mr. Stewart-Patterson: No, there is not. It does not do away with a constant run of political issues that may arise. There will always be issues raised on a day-to-day basis, but it does provide a kind of consistent framework for managing the issues.
One of the points made is the importance of continuity in funding relationships. Once you put something in a long- term contract you do get continuity, but you lose flexibility. That can cause problems. However, if I can put it into a micro level of public-private partnership notion that may be a better way to get new hospitals built. A criticism that has been made of P3s is that if governments can borrow cheaper than a private sector provider can, why should governments not just borrow and fund directly?
When a private sector company is doing a P3, it is providing the money, expertise, and it is absorbing the risk of cost overruns. Then the hospital can concentrate on needing 12 exchanges of air per hour in an operating theatre. They do not have to build up one time in-house expertise on what is the best equipment on the market and the most cost- efficient way of achieving that particular outcome. We are looking at a sharing of expertise.
When you get into a public-private partnership that is designed, built, owned, operated, and maintained, you are building in fixed costs that include maintenance. That is being done here at the Royal Ottawa and in Brampton. That means if you get into a budget squeeze like we got into in the early 1990s, the hospitals can no longer scrimp on maintenance. Therefore, if money is not there it will bring up tougher choices in terms of direct provision of clinical services. You can also argue that means governments are less likely to cut the care that is important to people.
None of these dilemmas have perfect answers, but this kind of approach would at least seem to be an improvement over what we have today.
Senator Robertson: This committee has heard from a variety of witnesses about methods and methodologies of increasing the funding that is required to sustain the health system. There are very few people who would disagree that something needs to be done. Some of our concerns are that the increase in federal funding has to be in designated funds. We worry about tax increases going directly to the Department of Finance because they will just eat it up and the Department of Health will not see those funds.
Did I hear you say that taxation is not the way to go because it affects our competitive nature?
Mr. Stewart-Patterson: When we talk about sustainability, we are talking about the capacity of all Canadians as an economic group to afford the quality of health care that we want. How we divvy up that cost is an issue of fairness. Some countries will choose to slice it one way; some will slice it in another way. Some provide public help on a group basis only to those who need is, it; others, like us, provide a service base model where we take a package of services and provide it to everyone. Others prefer to go the cost-shared approach and cover everything to some extent but only some things on a 100 per cent basis. There are many ways to come to what is the most fair in terms of sharing the total cost.
The fact is, the public health care system is not covering costs and other people are. It is either individuals who may or may not be able to afford it, or it is employers who are picking up the cost. We see that in terms of the costs of employer-paid or shared-cost private supplementary health and dental insurance.
If the public system is not providing the quality of care that is necessary, and if waiting lists are getting longer, they have an impact on competiveness as well. When people are off the job for longer or when their capacities are reduced because they are waiting longer for treatment, that reduces productivity.
Looking across the industrialized world, countries spend roughly the same amount as a share of the economy between about 5 per cent and 7 per cent of GDP. Most OECD countries fall into that band. We are more or less slightly above the middle of that band. The amount that we spend publicly is not unusual.
It is possible to increase the amount of public money that we spend on health care without putting us out of line with our economic competitors. While our public spending on health care is not out of line, our public spending on other items, for example, servicing public debt, is out of line. Therefore, we must look at the total share of government in the economy as our upper limit.
If we want to put more money into public health care, where is it going to come from? Are we increasing the net tax burden beyond 44 per cent of GDP from all levels of government, or are we looking at this as dedicating a certain stream of revenue to make sure it goes to health? Health care is the priority, and there are other things governments are doing that they should not be doing or doing as much.
Senator Robertson: Do you believe it is ethical for the Government of Canada to forbid Canadian citizens to buy health insurance for any procedure that is covered under the five principles?
Mr. Stewart-Patterson: We cannot buy private insurance for public services. On the other hand, it is quite possible in Canada to buy privately services that could be provided publicly. They are available. They are not widely available, and they are expensive. The prohibition is one that prevents doctors from crossing over and providing services both under the public and private systems.
Senator Robertson: Buying private health insurance is a prohibition against citizens; is it not?
Mr. Stewart-Patterson: It does not stop individuals from buying individual services.
Senator Robertson: If I want to go to a private clinic or private hospital somewhere in Canada, I cannot buy insurance to cover that. Is that correct?
Mr. Stewart-Patterson: As far as I know, there is not.
Senator Robertson: Is it ethically right?
The Deputy Chairman: Senator Robertson is asking whether that infringes on the individual's rights.
Mr. Stewart-Patterson: My understanding is, that if I want to see a specialist for a service that would be covered by my GP I can do that even though the specialist is providing services within the public system. My understanding is a group of specialists in B.C. is providing that type of service.
Senator Morin: The physicians cannot be part of the public system and receive private funds.
Senator Robertson: I cannot buy insurance for that.
Mr. Stewart-Patterson: There are some gray areas in the system, for instance, purchase of services by Workers' Compensation Boards.
Senator Morin: That is a different story.
Mr. Stewart-Patterson: That is permissible because when the Workers' Compensation Board buys it, it is no longer an insured service. My understanding is that a group of specialists in British Columbia operate within the public system that nonetheless provides directly to the public, for a fee, direct access to specialist advice. When they provide direct access without going through a GP, it is not an insured service. You can only get access, as an insured service, to a specialist if you get a referral from a GP.
Senator Morin: I hope the Minister of Health of B.C. does not know that.
Mr. Stewart-Patterson: It has been in the newspapers.
The Deputy Chairman: It was Dr. Day. There was a big article in the Report On Business.
Mr. Stewart-Patterson: I am offering a personal reflection. I do not think it is either ethical or possible for governments to prevent Canadians from buying services they want. They can make it difficult for them and make it almost impossible to do. People will be forced to go to the United States or somewhere else, but they cannot prevent Canadians from buying health insurance that will provide those services outside Canada.
The Deputy Chairman: A gentleman from Quebec City does that: He buys private insurance and takes his family to the United States for treatment.
Mr. Stewart-Patterson: I am aware of cases where executives recruited from abroad have insisted on maintaining worldwide health insurance because there is a concern with the perceived quality of the Canadian public health care system. Traditionally, we have talked about the Canadian public health care system having a competitive advantage because it provides, through the general tax system, something that employers pay for directly in the United States. In terms of payroll costs, we have a payroll cost advantage.
The Deputy Chairman: Are you referring to the auto companies?
Mr. Stewart-Patterson: Yes, in manufacturing and so on. I think that the labour cost advantage still holds. The issue that has come up for many of our members is not at the production level, at the level of a plant and cost competitiveness there, but with the ability to recruit and retain people for the head office function. The primary concern of mobile, international senior level research and management personnel is not the cost but the quality of coverage.
Senator Morin: Le Conseil du patronat in Montreal told us the same thing. I told the unions that, but they did not feel that it was a very good argument.
Mr. Stewart-Patterson: The unions are talking for the union membership.
Senator Morin: They said there was a competitive advantage.
Mr. Stewart-Patterson: For union jobs, that is true.
Senator Morin: For employers, there was a competitive advantage. I told them that Le Conseil du patronat in Montreal had told us that there had been difficulties in recruiting people. You are right. It is a serious concern.
Mr. Stewart-Patterson: Within the competence of unions talking about their members, yes, employers still have a cost advantage through the Canadian method of providing health care or funding health care, in comparison with American employers. The funding advantage is not sufficient to offset the disadvantages of the perceived quality when it comes to high-end jobs and particularly those involved in head offices and multinational operations.
Senator Keon: You started off by asking how much society is prepared to pay, and you did not answer. No one ever does. We talk about how much the government should add in as a percentage of GDP, but we never address the question of just how much society could or should pay for the services. I would like you to answer that briefly.
Mr. Stewart-Patterson: How much is enough? There is no correct answer to that question. The answer is what we collectively choose to do. Around the industrialized world there seems to be a consistent answer that seems appropriate in terms of public funding; 5 per cent to 7 per cent of GDP range. Similarly, if you plot per capita national income against per capita expenditures on health care total, public and private, it is virtually a 45-degree line. The more money economies generate, the more people choose to spend.
We make choices every day about how much is enough of any particular commodity or service. As a society, we make collective decisions and we may change our minds over time. My suspicion is that as the economy grows more prosperous, we will spend more money. We might even raise the amount we spend as a percentage of GDP. However, I do not think there is a right answer in terms of how much to spend. The United States spends far more than we do out of a far richer economy, but their health outcomes at large do not seem to be notably superior. Therefore, spending more money is not necessarily the right answer either. We are looking at how to get the best health outcomes. It is not just the overall results; it is links to income and things like that.
We did not attempt to answer because there is no right answer that precisely tells us the optimal amount to spend on health care. No matter how much you spend, the real question is: Are you getting the best value out of it in population health outcomes? That is why we focused on the value rather than trying to come up with a specific number in terms of how much.
Senator Keon: The private sector role has been kicked around for quite some time. Some people are enthused about it. My own feeling is that the public will not accept it because they were not impressed with Hydro One, Air Canada or CNR.
Mr. Stewart-Patterson: Are you talking about the Crown corporations or private-public sector involvement?
Senator Keon: I am talking about Crown corporations.
Mr. Stewart-Patterson: Our members have expressed significant reservations about the Crown corporation structure as well. We have looked at the examples that you have cited and know that this is what we do not want to happen to our health care system. That is why the governance process will be critical in terms of who is running it, what their mandate is, how the contracts are written, and what the accountability mechanisms are.
As a concept, people will ask if it is an improvement. That is the real question. If you are not satisfied with what we have today, then how will you improve on it? There is a lot of public dissatisfaction with what we have today. There are structural impediments to getting better value, innovation, and to doctors making the right choices in terms of the allocation of resources. There are impediments to provincial governments making evidence-based allocations in terms of the allocation of capital within the system. There are problems of where to build new hospitals and what to invest in for the future needs of the community. There is a certain degree of political interference.
This committee has been doing an immense amount of work on the assumption that there must be ways to improve on our record. I think the public is willing to contemplate any suggestion for improvement if they can be persuaded that it will work.
Senator Keon: One thing the public likes is the accountability. When they are fed up to the neck with bureaucrats, they can throw the Minister of Health out. I cannot see the public going for a Crown corporation. This debate has been going on quite a while, but I have a feeling it is not going to happen.
Mr. Stewart-Patterson: I take that as a comment rather than a question.
[Translation]
Senator Pépin: On page 2, you say:
[...] in addition, Canadian enterprises can help reduce demand for public services through community investments and human resource policies that contribute to improve population health.
That is an interesting suggestion, but what does that mean in practical terms? Could you give us some examples of how that would apply?
[English]
Mr. Stewart-Patterson: I am acknowledging that adult Canadians tend to spend a deal of their lives at work. Therefore, the kinds of policies that apply to the workplace have an impact. That can apply to corporate culture in terms of whether it is the kind of workplace where people are comfortable or stressed out. What is the health and safety side in the workplace? It can apply to peace of mind in terms of human resource policies and what benefits are covered. Are there provisions for elder care or child care?
There are any number of ways that employers may have an impact on the well-being of their employees and their families. Then there are questions concerning the tax side. Employers can also be involved in incentives in encouraging employees to engage in healthy lifestyles, some of which may be taxable and some of which may not. There is then an issue as to what extent employers do things; and if they do them, to what extent they make their employees pay tax on.
A few years ago, we ran into a situation where Revenue Canada was levying employees with retroactive tax bills for the value of educational courses they had taken at the employer's expense. We pointed out that this was rather counterproductive in an atmosphere where the government was saying employers should be investing more in their employees.
The Deputy Chairman: They called that a taxable benefit then?
Mr. Stewart-Patterson: Yes. It started out with executive MBAs, which were significant hits when employees found that was a $40,000 taxable benefit they had received last year and the tax department wanted them to pay up for it. When we started digging into it, we found that the department was getting increasingly aggressive, to the point where it actually took two of its own auditors to court, for having taken, at the department's expense under the department's own rules, courses that were required for their next promotion. They went to court and obtained a ruling that this was a taxable benefit because unless employees were forced on pain of firing to take a course, it was considered to be primarily personal and thereby taxable.
We exposed that case and got into a public discussion about it and we received a new interpretation bulletin that reversed the onus 180 degrees. It required a look at whether we were being consistent in terms of the objectives we wanted to achieve through our tax system.
When we talk about how we get better population health outcomes, employers have roles and responsibilities to play.
The Deputy Chairman: May I thank you, Mr. Stewart-Patterson, for your appearance today and your most provocative submission.
The committee adjourned.